Aussie Home Loans joins direct life field

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29 June 2009

“Aussie John” Symond, the man who made a fortune swearing to keep mortgage lenders honest before selling a third of his company to a bank, has moved into the direct life insurance market.

Aussie Home Loans is marketing the phone-accessed life, funeral and accident products as an agent for the South African-based Hollard Group.

Mr Symond, the Chairman of Aussie, has pledged to help put Australians in a “better place” for their financial needs, quoting “alarming” research that shows only 40% of the population carries life or disability cover.

Competitors in the burgeoning direct life market include Hollard’s own Real Insurance brand, Allianz, Tower Australia’s Insurance Line and Once Life, which is backed by the Singapore-based Yanlord property group and underwritten by Commonwealth Bank-owned St Andrew’s Life Insurance.
 
A report released in April by Rice Warner Actuaries says Australia’s direct life insurance market represents about 8.2% of annual risk premiums and is relatively underdeveloped by international standards.

It sees direct products and direct distribution as a key growth area for life companies in the next few years.

“While marketing and distribution costs are high, direct products do not have to compete as aggressively in terms of price and features, and the financial services reform requirements are far less onerous,” the Rice Warner report says.

Aussie, which sold a one-third “strategic stake” to the Commonwealth Bank in August last year, has foreshadowed a move into the general insurance market later this year.