Natmut To Provide Anz's Health Cover
Sydney Morning Herald
Sunday May 18, 1997
ANZ Banking Group is about to shake up the private health insurance industry with the bank expected to launch its own private health insurance product later this month.
ANZ may be the first of the four major banks to offer a private health insurance product to customers.
National Mutual will develop and provide the product, which will be sold through the ANZ's extensive bank branch network.
It will extend the range of insurance products ANZ already offers its customers, which include superannuation, travel, car, house and contents insurance, as well as unit trusts and risk products.
National Mutual is expected to be paid a commission by ANZ for each of the health insurance products sold.
National Mutual Life's managing director, Mr Tony Killen, would not confirm if the company had struck an alliance with the ANZ. But he said NatMut had been seeking to expand its product distribution.
"We do see the potential of other alliances and we are working on several of these at the moment," Mr Killen said.
ANZ also declined to confirm its planned entry into the health insurance industry.
The alliance would benefit National Mutual by giving it a cheap way to sell its insurance products: through ANZ's extensive branch network.
For the ANZ, it is an extra product to target and capture customers, particularly in the home loan market.
Still, it is an interesting move for the ANZ. The private health insurance industry has been battling declining membership for the past few years and profitability has suffered.
Price increases on health insurance products have also made them less attractive propositions for consumers.
National Mutual may also secure an arrangement where it can cross-sell bank products, such as mortgages and even a credit card, to its customer base.
It is understood National Mutual has not secured such an arrangement with the ANZ.
However, the life company already offers its own securitised home loans.
National Mutual had an agreement with Advance Bank, where it did offer a variety of Advance mortgages to its customer base. In return, Advance offered some of National Mutual's life products to its clients.
But the merger between St George and Advance is expected to terminate this arrangement. St George applied last year for a life insurance licence for its wholly owned subsidiary, St George Investment Services.
The deal between ANZ and National Mutual cements a longstanding relationship between the two companies.
ANZ is National Mutual's banker and once attempted a takeover of the life company, in 1990, but was stopped by the Federal Government.
Stockbroking analysts had mixed views on the alliance.
"Life insurance companies want to have as broad a distribution network as possible - they don't necessarily need to own a bank to provide the product," one analyst said. "But not too many of these alliances really work."
AMP and Westpac had a five-year alliance that went nowhere in the 1990s.
Mr Killen said National Mutual was not interested in applying for a banking licence in the short-term but would not rule it out.
© 1997 Sydney Morning Herald
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