nib has announced its New Zealand subsidiary will acquire Kiwi Insurance for $43 million.
Kiwi Insurance was established in 2002. The company offers life and living insurance products and services through Kiwibank.
nib said it will also enter an exclusive relationship with Kiwibank under which the bank will refer its retail customers to nib for their life and living insurance needs.
It said the acquisition represents a significant opportunity for the NZ business and will see the immediate addition of around 34,000 new members.
The acquisition is subject to receipt of regulatory approvals and is targeted for completion in early 2022.
Managing director Mark Fitzgibbon said the acquisition is aligned with the company's 'personalisation' strategy and will allow nib NZ to provide health insurance members and Kiwibank customers with a more comprehensive suite of products.
“In New Zealand, living, life and health insurance are complementary products so often purchased as a package. We‘re responding to this preference with what should be a more integrated and seamless experience for members and customers. And it means more people will benefit from the investment we’re making in more personalised health risk assessment and management,” said Mr Fitzgibbon.
He said nib NZ had been actively exploring opportunities for some time and was very confident a more comprehensive and integrated offering would enhance market penetration in both health and life products and lift revenues. The local living insurance market is twice the size of the health insurance market and has delivered consistent growth over the last decade.
“While in a regulatory sense we distinguish health and life they are both about meeting the needs of people for personal security. Our personalisation strategy or what we’ve dubbed P2P (Payer to Partner), is taking this to another level by offering greater health security in addition to financial security,” he said.
nib said it will fund the transaction through a combination of existing capital and new debt. The transaction on completion is expected to be accretive to earnings per share, excluding one-off transaction costs that are forecast to be approximately NZ$8 million.
The transition is expected to take around 12 months.