A ClearView ahead for health and life business

In 2002 the humble brussel sprout was elevated to celebrity status in Australia’s retirement industry through NRMA and its offshoot, ClearView Retirement Solutions.

A few years later, the retirement industry group’s love affair with the sprout faded after its interest in the financial services market waned. As a result, ClearView’s then parent group NRMA was relocated under Insurance Australia Group’s (IAG) larger insurance umbrella and ClearView was cast out.

On January 29 this year, IAG severed its ties with the financial planning industry, selling ClearView to Australian health insurer, MBF Australia.

The sale of ClearView fetched IAG roughly $220 million, with an additional earn-out of up to $50 million over five years.

In an ironic twist, the head of IAG’s predecessor (NRMA Insurance) at the time of its move into financial planning, Eric Dodd, is now managing director of MBF and has been vital to the ClearView acquisition.

ClearView’s managing director John Cowan says MBF developed a strategic plan when Dodds moved into MBF’s top position 12 months ago. Under Dodds’ leadership, part of the plan was to broaden the health insurer’s offering beyond private health insurance.

“They did some research of their members and in terms of what the most likely product that their members would like to buy from MBF, it turned out to be risk insurance,” Cowan says.

“[ClearView has] a profitable risk insurance business and that’s the best extension for MBF. It also provided a larger opportunity to blend health and savings and advice together. So that’s what we’ll be working on in the next six to 12 months,” he says.

Under the terms of the acquisition, Cowan says MBF acquired the rights to the ClearView brand — which has financial planning, investment and superannuation businesses branded ‘ClearView’, and a life insurance business marketed under the ‘NRMA Life’ brand — and plans to market the life insurance products under the MBF brand.

He says ClearView’s customers and staff will be moved to MBF, with ClearView products and services offered through MBF’s retail network. Life insurance products will be marketed under the MBF brand.

Cowan is quick to add that under the deal everything will remain the same — the name and the brand. The only major change is that ClearView will drop its NRMA endorsements.

The customers of ClearView’s previous owner, IAG, will continue to have access to ClearView products and services through MBF, which it offers to selected customer groups. Premium rates and investment fees are unaffected by the acquisition and all investment options and fund managers are unchanged.

Moving into the MBF fold is a major boost for ClearView, enabling access to the health insurer’s members. MBF provides private health insurance to nearly two million people. In the 2002-03 financial year, MBF received $1.4 billion in premiums and returned $1.2 billion to members in benefits.

While Cowan is keen to focus on the positives of the deal — which include access to IAG’s client base for the next five years, the prospects of meshing health and finance together to form new products and expanding the ClearView brand — the current jagged state of ClearView’s company structure is frustrating to him.

“The majority of staff in head office are still in the NRMA building and at the end of this month we’ll move to the MBF building,” Cowan says.

“Our advisers are based in the NRMA branches at the moment and that has a 12-month transition period, so some of our advisers will be based in some of the NRMA branches for a period to come. Progressively we’ll move them under the structure in the MBF environment,” he says.

Cowan says the transition period of its 150 staff is top priority for ClearView at present, but the group and MBF are already in the initial planning stages of new products to bring financial health and physical health together.

While he remains tight-lipped on the exact details of possible new products from both groups, Cowan says new products could be launched later this year.

As well as preparing to settle its staff into their new home within MBF’s offices, Cowan says ClearView already has plans to extend its geographical footprint to an Australia-wide reach.

In the past, ClearView has focused solely on developing an adviser presence in NRMA’s NSW and ACT branches. However, Cowan says MBF’s strong presence in Queensland offers an obvious opportunity for expansion.

Cowan says while the group is not actively on the acquisition trail, he says if an adviser or group of advisers expresses an interest in joining ClearView and is a good fit for the group, then there are definitely opportunities available.

ClearView’s advisers, which currently number less than 30, are all salaried, however, the advisers do get a bonus for sales and on a customer satisfaction basis.

In terms of ClearView’s back-office, Cowan says the group’s advisers use a mixture of Visi tools and Asset planner software.

He says the group is looking to integrate the two software programs into one. However, as ClearView’s main priority is concentrating on the adviser and staff transition with MBF, the integration has been placed on the backburner for the moment.

With its own in-house product team, Cowan says ClearView prefers to rely on in-house research rather than external research house data.

The next 12 months will certainly be an interesting time for ClearView, as the brussel sprout finds a new home in a differrent patch of the market.