Insurance


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Provident set to purchase Co-op Insurance

Provident Insurance has announced today it intends to purchase the insurance business of Co-op Insurance NZ.

At present, Provident Insurance’s automotive-owner protection policies are underwritten and supported by Co-op Insurance NZ.

Provident says the partnership benefits from shared competences and commitment to the motor industry.

While the sale is still conditional, heads of both the Provident and Co-op Insurance companies are enthusiastic about the move.

“Our relationship with Co-op Insurance NZ has developed through a shared vision to deliver innovative products and exceed the service levels expected from our market,” says Provident CEO Steve Owens.

“Purchasing Co-op Insurance NZ will give us greater scale, the ability to develop our technology platform and further innovate in product design”.

Henry Lynch, CEO of Co-op Insurance NZ, is equally enthusiastic.

“Provident Insurance has been a great partner for Co-op Insurance NZ and a perfect fit to purchase our insurance business,” Lynch said.

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Heartland bank posts profit

Heartland Bank Limited (NZX: HBL) has achieved a net profit after tax (NPAT) of $60.8 million for the full year, ending June 30, 2017 (FY2017).

This is an increase of 12 per cent from the previous financial year, which ended June 30, 2016 (FY2016).

According to a statement, the increase in profitability was driven primarily by growth in receivables across all divisions. These included the household, business and rural sector. 

During this time, household net receivables increased by $227.8 million with reverse mortgages, motor vehicles loans and personal loans (including Harmoney) increasing by $126.1 million, $72 million and $40 million respectively. Meanwhile, business and rural divisions’ net receivables increased by $96.2 million and $123.0 million.

Throughout the year Heartland acquired a 25 per cent shareholding in Fuelled Limited, an online small-to-medium business (SME) lender.

Alongside this equity investment, a $2.0 million committed debt facility was provided to enable Fuelled to accelerate its Australasian growth plans.

Fuelled is a New Zealand-based business whose simple on-demand service enables SMEs to receive an immediate cash advance on their outstanding invoices.

Fuelled’s integration with Xero enables its advanced credit assessment engine to make real time credit and financing decisions online.

The directors of Heartland have resolved to pay a final dividend of 5.5 cents per share. The final dividend will be paid on 21 September 2017 to shareholders on the company’s register as at 5.00pm on 7 September 2017 and will be fully imputed. The Dividend Reinvestment Plan (DRP) will apply to the final dividend with a 2.5 per cent discount .

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Tasman Tempest claims total $61.7M

Aucklanders were also affected by the flood.

The storm called the ‘Tasman Tempest’ by meteorologists has resulted in $61.7 million worth of insurance claims, the Insurance Council said.

The large storm, which saw a month’s worth of rain fall in 24 hours, hit the North Island between March 7 to 12.

Suburbs across Auckland flooded as well as many towns in the Coromandel. The township of Whangamata was battered particularly hard by the wild weather.

354 motor vehicle claims related to the weather event totalled $3.12 million, an average of $8.813.56 per car.

The final number of insurance claims stood at 7,774, for a total of $61.7 million. Domestic insurance claims had the highest number of claimants, at 6,449, worth $37.03 million.

“The weather bombs we’ve had in recent months highlights the importance insurance plays when disaster strikes,” said Insurance Council chief executive Tim Grafton.

So far this year, natural hazards have cost $174.7 million in insurance claims.

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Are insurers taking too long for repairs?

The average time taken to repair a vehicle in New Zealand could be reduced by a third with improved administrative processes, according to a new industry survey.

A study conducted by the Collision Repair Association (CRA) found that the average time taken to repair a vehicle is around six days, with two days absorbed in administration between the insurer and repairer.

CRA general manager Neil Pritchard said some of the largest insurers in New Zealand had the longest administration times, with IAG, NZI, State and AMI group considered the most bureaucratic by survey respondents.

However, Medical Assurance, FMG and Allianz were found to have the shortest administration processes, according to respondents.

“Under the current model, the typical repair process requires the insurer to accept a claim for repairs, assess the vehicle, then authorise the panel beater to quote on the repairs. Once the estimate is accepted the panel beater can begin repairs,” said Pritchard.

“The issue is there is no industry standard covering the documentation required for an insurance claim and some insurers are regularly making requests for additional information after the estimate has been submitted by the repairer.”

However, the Insurance Council challenged this claim, saying the delay in repairs was due to a shortage of skilled panel beaters, not insurance red tape.

“They [The CRA] need more skilled staff who know how to work with high tech cars and they need more staff in repair shops in the major cities where we have seen an increase in both cars on the road and crashes,” said Insurance Council chief executive Tim Grafton in a statement.

The CRA’s research also found Vero/AMP, YOUI and Zurich were the slowest to assess, process and authorise insurance claims, while Medical Assurance, FMG and AA/SIS the fastest.

FMG was also the most likely major insurance company to be recommended to friends and family.

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Insurance for Trade Me

Jon Macdonald, Trade Me’s chief executive.

Trade Me has partnered with Tower Insurance to launch Trade Me Insurance with an online suite of home, contents and motor-vehicle policies. (more…)

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Insurance deal views sought

The Commerce Commission has published a statement of preliminary issues relating to an application from IAG (NZ) Holdings to acquire 100 per cent of the shares in Lumley General Insurance (NZ). (more…)

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Takeover bid – in-depth

The Commerce Commission says insurance underwriting levels will be a central focus of its investigation into IAG (NZ) Holdings’ bid to acquire 100 per cent of the shares in Lumley General Insurance (NZ). (more…)

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IAG seeks to buy Lumley

The Commerce Commission has received an application from IAG (NZ) Holdings seeking clearance to acquire 100 per cent of the shares in Lumley General Insurance (NZ).

IAG supplies personal and commercial insurance products across the country, with most sold under the AMI, State and NZI brands.

Lumley, which is ultimately owned by Australian company Wesfarmers Ltd, offers a range of personal and commercial insurance products, all of which are distributed through independent brokers and other intermediaries.

When considering a proposed merger, the commission decides if competition lost in a market when two businesses merge is substantial. It only gives clearance if it’s satisfied a merger is unlikely to have the effect of “substantially lessening competition”.

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