Former Kiwibank chief executive Sam Knowles has been appointed a director of start-up New Zealand-owned life insurer Partners Life but doesn't expect to cross swords much with the state owned bank, which is also pushing into the life insurance market under his successor Paul Brock.
Partners Life was created in August 2010 by Naomi Ballantyne and Chris and Richard Coon, who were the founders of Sovereign, the insurer now owned by ASB.
Knowles told interest.co.nz he was attracted to Partners Life because it's a New Zealand owned start-up with a "strong customer focus" aiming to take on the big boys in an area that hasn't seen much innovation in recent years. His appointment comes at a time when Kiwibank is stepping up its push into the life insurance market. However, Knowles said he didn't expect much competition between Partners Life and Kiwibank.
"We (Partners Life) are focused on the independent financial adviser channels and they (Kiwibank) are, I guess, primarily looking at cross selling against their customer base," said Knowles. "It's not an area that banks have traditionally competed very well in because they're more focused on their cost of sales through their existing channels."
On Partners Life's board Knowles joins chairman Boyd Klap, previous chief executive of the Prudential and Life Offices Association, Joanna Perry who is a former member of the Securities Commission and KPMG partner, as well as Ballantyne and the Coons.
Partners Life says it has experienced rapid growth in market share across its range of life risk insurance policies, including life, trauma, medical, permanent disability and income protection insurance, as well as a new range of business protection policies. Knowles said the company primarily operates through independent financial adviser channels such as financial planners and risk advisers.
Asked whether financial advisers and brokers Partners Life works with are allowed to rebate commissions, there by making the insurance policies cheaper, Knowles said they could do whatever they think is appropriate for their clients.
And as to whether customers are informed of where any commissions Partners Life pays go, he said new disclosure laws were much stronger on this type of disclosure than they used to be.
"They also put much more onus on the adviser to work in the customer's interest," said Knowles." So I think we're looking at a different environment to that past. It doesn't mean those issues still won't be there, but there's much more onus on everyone to be totally upfront about what's going on."
Partners Life says it has 75 employees and has exceeded its original expectations, reaching new market share of 13% and the number two position since April last year.
"The Partners Life business model is unique in its approach, focusing on rewarding adviser expertise as well as customer loyalty. Essentially advisers are rewarded for identifying when Partners Life products deliver the best solution for their clients and customers are rewarded for their loyalty through increasing premium discounts over time," Partners Life says.
Financial statements filed with the Companies Office covering the period to March 31 last year - the firm's early months - show Partners Life had total income of NZ$14,030, a deficit after tax of NZ$1.2 million and total equity of NZ$2 million.
Knowles said he brings experience in building a brand to the board table, plus experience in scaling a business, and help with possible "adjacent opportunities" such as the provision of mortgages, specialised personal insurances, business insurances, and accident insurance. Knowles' background includes stints heading up At Work Insurance and BNZ Life.
After eight years at the helm of Kiwibank Knowles stepped down in 2010. He's now chairman of another New Zealand Post subsidiary, Localist, and on the board of Rod Drury's sharemarket listed, online accounting software business Xero, and chairs the government's ICT Council.
*Additional reporting Gareth Vaughan.
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