Funds with group insurance through IUS are likely to re-tender following the sale of its underwriter to QBE and the defection of key executives to Zurich, which has internalised its distribution of group life in Australia for the first time.
The five members of the IUS group risk team to have started in Zurich’s Sydney office last Monday include the general manager, Phil Collins, national sales manager Stuart Rowe, operations manager Paul Hawkes and pricing actuary Chenny Suthersan.
The general manager of life insurance at Zurich, Colin Morgan, said it had merely hired the IUS team as employees, and had no rights over the existing group risk clients of IUS, which include First State Super’s ambulance officer division.
However it’s understood the sale of CUNA’s Australian operations to QBE will see it gradually withdraw from the group insurance space in Australia.
Zurich has had some success in the group insurance space since 2008, when it hired BlueGUM as a distribution agent under an agreement which lapsed last year. The hiring of the IUS five is effectively an insourcing of that distribution capability.
Morgan said Zurich’s niche was providing group death/TPD insurance through corporate super funds or master trusts, as well as salary continuance insurance direct to the corporates themselves, particulatly where those corporates had a global relationship with Zurich.
Zurich may consider some tenders for industry fund business, but Morgan noted that margins had become extremely thin in that market.
Phil Collins said the Zurich partnership would allow his team to maintain the service standards and production approach they favoured, which includes seeking the most favourable reinsurance deal on a client-by-client basis.