Westpac NZ will be ending its relationship with the country’s largest general insurer IAG NZ, replacing it with Tower Insurance as the bank’s new underwriter for its house, contents, motor and landlord insurance products.
This comes after it was reported in May that the bank had issued a request for proposal (RFP) for a strategic relationship with an insurer.
A RFP is a formal request from an organisation calling on suppliers to propose how their products or services could achieve a specific outcome the organisation is looking for.
IAG NZ trades under the AMI, State, NZI, NAC, Lumley and Lantern brands. It provides general insurance products sold by ASB, BNZ, The Co-operative Bank - and, until recently, Westpac NZ.
From July 2026, Tower will replace IAG NZ and will underwrite the insurance products Westpac NZ sells to its customers.
Westpac NZ managing director of product, sustainability and marketing Sarah Hearn says Tower impressed the bank with their “great digital offering and competitive pricing”.
“Among the new functionality, our customers will be able to view data-driven personalised insurance insights through Westpac digital banking,” Hearn says.
“Tower is a leader in using advanced data and analytics to assess the risks of individual properties being impacted by climate-related events. We’re keen to work with them on advocating for national adaptation frameworks and more transparency around natural hazard risk data.”
Current Westpac NZ insurance customers don’t need to do anything as their insurance agreements will continue.
On the NZX, Tower chief executive Paul Johnston says "through this partnership, we’ll deliver data-driven insurance experiences integrated into Westpac digital banking".
"This includes the ability for customers to purchase, manage, and claim on policies online, as well as access Tower’s risk-based pricing and natural hazard risk information about their homes, all within their Westpac online banking experience.”
Johnston says this agreement supports Tower's focus on growing its home insurance portfolio, "and contributes to our FY27 target of achieving 10% to 15% growth".
A referral arrangement will also be established for Tower’s broader suite of insurance offerings, the insurer says.
The partnership between Westpac NZ and Tower is initially for five years, and "is subject to Tower and Westpac entering into an agreement for implementation and ongoing support arrangements," the insurer says on NZX.
'Naturally we are disappointed'
IAG New Zealand says it had actively participated in Westpac’s recent RFP.
“Our partnership with Westpac has spanned over three decades, beginning in 1994 when Lumley Insurance entered into an agreement with Westpac,” IAG NZ says.
“This relationship continued in 2014 when IAG acquired Lumley Insurance and maintained its successful partnership with Westpac.”
IAG NZ says it valued the longstanding relationship between the organisations.
“Naturally we are disappointed by the outcome of Westpac’s RFP process.”
IAG NZ says it will “continue to underwrite all policies current at the date of termination and further intends to offer renewals of all such insurance to these customers at their expiry”.
Behind Westpac NZ's RFP
In May, The Post reported the strategic relationship Westpac NZ was looking for would be data-driven.
At the time, Westpac NZ chief executive Catherine McGrath said: “One of the things that we're particularly interested in is a strategic partnership leveraging data to help New Zealanders have the right information about their homes and insurance; both costs and risks of their homes, and how we think about that as banks.”
“We’re looking for a more strategic partnership to help customers navigate that more uncertain future, rather than a traditional arrangement that’s really been about referrals and is the product fit for purpose.”
Westpac New Zealand also sells life insurance and travel insurance products.
Currently the bank's life insurance is underwritten by Fidelity Life Assurance Limited and travel insurance on some credit cards is underwritten by AIG Insurance New Zealand.
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