Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Tower's Stiassny takes swipe at IAG’s Lumley acquisition

Tower chairman Stiassny takes swipe at IAG’s Lumley acquisition

By Paul McBeth

Feb. 5 (BusinessDesk) - Tower chairman Michael Stiassny took a swipe at Australian rival Insurance Australia Group’s bid to buy Wesfarmers’ trans-Tasman underwriting businesses, saying the market dominance creates “significant risk.”

IAG has sought clearance from Australasian antitrust regulators to buy the WFI and Lumley Insurance brands as well as a 10-year distribution agreement with Coles for A$1.85 billion, something Tower’s Stiassny says is of concern to the wider industry.

“We are pleased the Commerce Commission is taking a close look at the proposed IAG acquisition of Lumley, given the implications for New Zealand, the insurance industry and consumers,” he said in speech notes to today’s annual meeting published on the NZX. “We believe there is significant risk from one business controlling two-thirds of the personal lines market, if New Zealand was to suffer another event on the scale of Canterbury.”

IAG, which operates the State, NZI and Lantern brands, grabbed more of the New Zealand market in 2012 when it bought assets of AMI for $380 million after its local rival was forced to seek a financial lifeline from the government when the Canterbury earthquakes drained its reserves.

On the proposed Lumley acquisition, the Commerce Commission has said it will look at whether the tie-up will damp competition in personal and commercial insurance products in home and contents, car, boats, commercial property, liability and marine cargo. A decision is due on March 28.

Tower chief executive David Hancock today told shareholders in Auckland industry consolidation continues to be a long-term theme, and that the insurer “is prepared to participate in this trend where we can add value for shareholders.”

The insurer has scaled back its operations to largely general insurance having sold the bulk of its life business to Fidelity Assurance and its investment arm to Fisher Funds. Tower looked at the AMI business on the block in 2011, and made a hostile takeover bid for Fidelity in 2010.

Shareholders approved today’s resolutions, which included amending the company’s constitution to trim the size of its board.

The shares were unchanged at $1.75 today.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Rocket Lab: Launch Expected

Rocket Lab has delayed the roll out of the launch vehicle called Electron by one day, due to weather conditions. The planned launch attempt will now take place on Tuesday, May 23, 2017. More>>

ALSO:

Budget: Irrigate (Good Times, Come On!)

Additional grant funding of $26.7 million over the next three years plus a capital boost of $63 million towards irrigation investments in Budget 2017 will deliver economic and environmental benefits through better use of water... More>>

ALSO:

Silver Fern Farms: Proposal To Close Fairton Sheepmeat Plant

Silver Fern Farms has advised its people of the proposal to permanently close the site, and has discussed potential transfer options to its other sites in the region as part of the consultation process...
More>>

ALSO:

MPI: Myrtle Rust Appears In Taranaki

The nursery in Waitara (just north of New Plymouth) reported suspected myrtle rust symptoms on young plants to the Ministry’s 0800 number yesterday (Tuesday). More>>

ALSO: