CBA sales drives new life company
ASB Bank has announced plans to merge the life businesses of Sovereign and Co-lonial New Zealand creating the country’s largest life company with $460 million of annual premium income.
ASB Bank has announced plans to merge the life businesses of Sovereign and Co-lonial New Zealand creating the country’s largest life company with $460 million of annual premium income.
The move follows the Commonwealth Bank of Australia (CBA) buy out of the fi-nal 25 per cent of ASB from the ASB Community Trust.
ASB has owned Sovereign for over two years while its parent company CBA re-cently took over Colonial.
ASB general manager marketing, Barbara Chapman, says the buy out cleared the way for the integration of the Colonial and Sovereign life companies.
“With the Trust owning 25 per cent a merger was too complex but now the process is under way,” Chapman says.
She says the new company will be based in Auckland and will be headed up by Sovereign chief, Ian Hendry.
However, the company will retain a strong presence in Wellington where Colonial is based.
Colonial head, David May, was offered a job in the new organisation but has cho-sen to “pursue other interests”.
Chapman says while there is some uncertainty amongst the staff of both compa-nies, ASB is committed to growing its business.
“The key is retaining people with knowledge, it is critical to hang on to them,” Chapman says.
She says only one brand will remain in New Zealand and ASB is currently re-searching the relative strengths of both the Sovereign and Colonial names.
“However, we’re waiting on CBA in Australia to decide what to do with all the brands it now owns.”
She says the entire product range of Sovereign and Colonial is also being reviewed with rationalisation a likely result.
ASB has indicated that only one of the two wrap accounts it now owns — Sover-eign’s AEGIS and Colonial’s Select Investor Service — will survive.
However, Chapman says the funds management side of Colonial First State will not be integrated into the ASB group.
“Colonial First State New Zealand will be reporting directly to CBA in Australia,” Chapman says.
AUTHOR
David Chaplin
Recommended for you
Proposed legislative changes to safe harbour duty could result in advisers having reduced professional indemnity costs, a joint submission by seven major licensees said.
With 66 per cent of newly established advice licensees being sole advisers, what are the risks and legal ramifications to consider when taking the plunge into self-licensing?
Despite its popularity, only 1 per cent of financial advisers say they have often discussed cryptocurrency with clients, CoreData said, fuelled by concerns of heavy legal expenses if the product goes wrong.
AFCA and the CSLR have signed a memorandum of understanding as to how they will support an efficient financial services sector via the scheme.
