Wednesday 2nd November 2005
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Chief executive Jeff Staniland said the company saw a strategic opportunity for Mike Pero Mortgages to establish New Zealand's first national brand for risk insurance broking.
Mike Pero Mortgages, New Zealand's sole listed mortgage broking firm, has 50 franchised offices throughout the country.
Staniland said Mike Pero Insurances Ltd would provide risk insurance broking for life, income protection and health insurance. Fire and general would also be available but was not the main focus.
"We see this as a natural extension of the Mike Pero Mortgages broking business. Mike Pero Mortgages has a duty of care to its clients to make sure they understand the risk and liability associated with a mortgage and take appropriate steps to protect and insure themselves," he said.
"The Mike Pero Insurance brokers, as with the mortgage brokers, will provide the best independent deals from a range of top quality companies such as Sovereign, AMP, Fidelity and AIA."
Staniland said the Mike Pero Insurance brokers would also assess the needs of their clients on a regular basis to ensure that they were adequately covered as their circumstances change.
"Sickness or disability is the single biggest risk facing a homeowner with a mortgage. Many people are significantly underinsured should they fall ill, or are not able to work for some reason, and could face real problems in meeting mortgage repayments. The worst-case scenario is they could lose their house through a mortgagee sale."
There are currently five insurance brokers working at Mike Pero Mortgages (two each in Auckland and Christchurch and one in Wellington), but until now they have only taken internal referrals from Mike Pero Mortgages brokers.
"Our strategy is to establish the Mike Pero Insurances brand in its own right, and engage or train a number of new insurance brokers to work in a number of Mike Pero Mortgages fanchises,'' Staniland said.
"We have a five-year plan to establish and grow the Mike Pero Insurances business, and would expect to have around 19 or 20 insurance brokers by that time."
Staniland said at present in New Zealand there were around $130 million in new risk premiums written each year. These were arranged through around 3000 existing independent brokers,
many of whom are approaching retirement and also have to deal with increasing levels of regulation and compliance.
"We are not just planning on taking a significant share of risk insurance premiums, we are looking at growing the insurance risk market given the level of under-insurance in New Zealand," he said.
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