Mike Pero Mortgages launches insurance business
2 November 2005
Mike Pero Mortgages to launch national insurance business
Mike Pero Mortgages, New Zealand’s sole listed mortgage broking firm, has announced plans to establish a national risk insurance business through certain key branches within its network of 50 franchised offices throughout the country.
“We see a strategic opportunity for Mike Pero Mortgages to establish New Zealand’s first national brand for risk insurance broking,” says Jeff Staniland, Chief Executive of Mike Pero Mortgages.
Mike Pero Insurances Ltd will provide risk insurance broking for life, income protection and health insurance. Fire and general is also available but is not the main focus.
“We see this as a natural extension of the Mike Pero Mortgages broking business. Mike Pero Mortgages has a duty of care to its clients to make sure they understand the risk and liability associated with a mortgage and take appropriate steps to protect and insure themselves.”
“The Mike Pero Insurance brokers, as with the mortgage brokers, will provide the best independent deals from a range of top quality companies such as Sovereign, AMP, Fidelity and AIA.”
New Zealand has one of the lowest rates of risk insurance in the OECD, according to a recent Swiss Re study.
“The Mike Pero Insurance brokers will also assess their clients’ needs on a regular basis to ensure that they are adequately covered as their circumstances change.
“Sickness or disability is the single biggest risk facing a homeowner with a mortgage. Many people are significantly underinsured should they fall ill, or are not able to work for some reason, and could face real problems in meeting mortgage repayments. The worst-case scenario is they could lose their house through a mortgagee sale.”
There are currently five insurance brokers working at Mike Pero Mortgages (two each in Auckland and Christchurch and one in Wellington), but until now they have only taken internal referrals from Mike Pero Mortgages brokers.
“Our strategy is to establish the Mike Pero Insurances brand in its own right, and engage or train a number of new insurance brokers to work in a number of Mike Pero Mortgages franchises.
“We have a five-year plan to establish and grow the Mike Pero Insurances business, and would expect to have around 19 or 20 insurance brokers by that time.”
At present there are around $130 million in new risk premiums written each year. These are arranged through around 3000 existing independent brokers, many of whom are approaching retirement and also have to deal with increasing levels of regulation and compliance.
“We are not just planning on taking a significant share of risk insurance premiums, we are looking at growing the insurance risk market given the level of under-insurance in New Zealand,” concludes Jeff Staniland.