British entrepreneur Richard
Branson is to take on the challenge of breaking into Australia’s
competitive life insurance market in early 2011.
Using the existing Virgin Money
base in Australia, the assault will be in partnership with
Australian life insurer TOWER Australia Group (TAG).
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Virgin Money
Australia MD Matt Baxby said: “Our new partnership with TOWER
Australia is good news for the insurance sector and better news for
Australian consumers.
“Combining TOWER’s unquestionable
reputation and infrastructure with the Virgin brand, we will be
delivering a straight-talking, great-value product which is what
people have come to expect from us.”
He continued that there is a lot of
opportunity for Virgin Money in the life sector given that research
shows that 95% of Australian families in Australia do not have
adequate insurance cover.
In teaming up with TAG, Virgin
Money has aligned itself with one of the country’s most ambitious
insurers.
The only specialist life insurance
company listed on the Australian Securities Exchange, TAG has
in-force premium of more than A$1bn ($960m) giving it an 11% market
share, the fourth-highest in Australia.
TAG has recorded a 15% CAGR in
in-force premium over the past 15 years and provides cover to some
2.5m people.
TAG has also attracted the interest
of Dai-ichi Life, the second-largest life insurer in Japan.
Dai-ichi made its first move in
September 2008 when it acquired a 29.7% stake in TAG from UK
investment company Guinness Peat Group for A$376m.
Dai-ichi followed this up in March
2010 when it gained regulatory approval to increase its stake in
TAG to 49.9%.
TAG is itself on the acquisition trail and is reported by
Australian media to have made a NZ$118m ($87m) takeover bid for New
Zealand life insurer and retail asset manager Fidelity Life.
