South African-based insurer, Hollard Insurance, is planning to take on the Australian-owned vehicle and content insurers in the highly concentrated New Zealand retail market.
The Hollard Insurance Company, a subsidiary of the giant South African Hollard group, was incorporated at the end of 2015 with plans to shake up the market.
In Australia, Hollard competes with its ‘Real Insurance’ brand across a range of household insurances including car, bike and house, as well as personal insurances like income protection and life cover.
Ando Insurance will bring competition to the car, truck and house insurance markets in New Zealand, which are dominated by Australian insurers Suncorp and IAG.
Hollard, which holds an insurance licence from the Reserve Bank, will be the ‘underwriter’ of policies issued by the Ando Insurance Group.
Ando’s chief executive John Lyon, formerly the chief executive of Lumley General Insurance,, says Ando had begun selling commercial insurance through insurance brokers, including to small and medium-sized businesses.
But it plans to launch into the retail market later this year, with its strategy being to partner with large organisations which can sell its policies. A lot of insurance is sold through the likes of banks and retailers such as Countdown.
“We are looking at the second half of the year for getting into the consumer market side of things,” Lyon told Stuff.co.nz
IAG’s purchase of Lumley had further reduced competition in a market dominated by just two insurers, IAG – which owns the State, AMI and NZI brands – and Australian company Suncorp – which owns Vero and also the lion’s share of AA Insurance.
Lyon notes the two Aussie insurers controlled around 80% of the consumer market in New Zealand.
The consumer market was “ripe with opportunity,” he told Stuff, which had prompted his decision to take on the big insurers, although he praised his former employer, IAG, as a “good insurer”.
Lyon notes: “For myself, my interest lies more with being a challenger than a defender of market share.”
Speaking to the Australian Financial Review, Hollard chief executive Richard Enthoven says: “For us it was about finding the right people and entrepreneurial culture to help build a business in what is a competitive market.”
“Hollard has built a track record of backing individuals into their own insurance businesses with start-up capital and underwriting support. Typically these entrepreneurs have a niche product or distribution opportunity. The team at Ando fit this criteria, along with some innovative solutions to bring to market,” Enthoven adds.
Hollard is not the first South African insurer to target New Zealand households.
Rival South African insurer Youi launched in New Zealand in late 2013, selling car, house, and contents – and other asset insurances, direct to the public.
