Tower seeks right alignments
Tower Life Australia is looking to expand its distribution reach by way of alliances.
Tower Life Australia is looking to expand its distribution reach by way of alliances.
Managing director Ken Boag says the group will consider forming strategic partnerships with general insurance groups, among other groups, in an effort to cross-sell life insurance products to customer databases.
Boag is looking to expand its distribution network, as the group continues to bed down its acquisition of FAI Life. Both companies have traditionally focussed distribution efforts through the multi-agent and broker channels.
At the moment two thirds of Tower's sales come via multi-agents, compared with more than 90 per cent four years ago. Virtually all of FAI products are distributed via multi-agents and brokers.
Once the FAI sale is bedded down, Tower Life Australia will have nearly $3 billion under management and net premium income of $547 million. With the boost in size, Boag says the group will have a bigger budget to build new distribution channels.
While Boag stresses that Tower is not contemplating reducing services to multi-agents and brokers, he is looking for other avenues to market the group's products. Those distribution channels include financial planners, corporate business and the Internet.
"We have traditionally reached the top couple of demographics via brokers and multi-agents, reaching only about 27 per cent of the market. We are now looking to penetrate the other 73 per cent," Boag says.
He also believes that once the right formula is in place, life insurance distribution via the Internet could grow as fast as stock trading has over the past 18 months.
Tower is also drawing up plans to grow its unit trust business run by David Bleakley, by stepping up its push onto financial planning group's recommended lists and master trust menus.
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