Partners Life is to buy BNZ Life from its Australian parent company National Australia Bank (NAB) for $290 million, subject to regulatory approval.
Speculation on a possible sale of the firm surfaced in 2019 and again in October with AIA and Resolution Life being named as possible contenders along with Partners Life.
BNZ Life is estimated to have around four per cent of the New Zealand life market and, according to business intelligence firm Dun & Bradstreet, have annual sales of $125 million.
Naomi Ballantyne (pictured), Managing Director of Partners Life, says her firm – which opened for business in 2011 – was invited to tender for BNZ Life along with other companies in September.
Should the transfer go ahead as expected – likely to be late 2021 according to NAB – it will add more than 100,000 clients to Partners Life’s total customer base, bringing it to more than 300,000.
BNZ Life has 116 members of staff, says Ballantyne, and they will be offered a transfer to her firm which has 280 staff. One of the terms of the sale includes a 10-year agreement whereby BNZ will refer bank customers wanting insurance to Partners Life.
…we have focused on competing for the business that IFAs give – none of that will change…
Ballantyne says two thirds of its policyholders belong to independent financial advisers (IFAs), “…they are the dominant part of the business and will continue to be so,” she says.
“We have always been totally committed to IFAs, we have always been huge advocates of IFAs, both in the media and with regulators.
“And we have focused on competing for the business that IFAs give – none of that will change.”
Ballantyne has briefed the regulators on the purchase and says she will work with them to get the deal across the line.
“We gave the regulators the heads up before we signed the agreement with NAB,” she says.
“The Reserve Bank is working on a number of issues around solvency in the New Zealand market at the moment. We know there is a risk to this approval. Not only the purchase of BNZ Life, but the financing of our own business is at risk of requiring change.
“So the best we can do is communicate to the Reserve Bank of our intention to work with them to make sure we meet their requirements, because that is the company that we want to be. We want to ensure that we can do this deal and have them be comfortable.”