Tower 'having look' at PrefSure

Jim Minto

Insurer and fund manager Tower is one of several companies taking a look at Australian life insurer PrefSure, being sold off by South African-based Liberty.

Tower chief executive Jim Minto said yesterday: "We're reported to be one of the parties that's having a look and I'm not denying that."

Minto said most Australian insurers of any size would be eyeing PrefSure, "because there hasn't been a company for sale in Australia for quite some time, not since 2003".

Minto said life insurance was a sector that had become a lot more attractive in Australia recently.

"There's a lot more interest in it. The market has grown quite quickly and there is some good profits and margins starting to be made in it.

"With any opportunity like this we would only look at it if we thought it offered some compelling extra value for Tower."

Tower, which reports its full-year result today, said earlier this year that it was looking to grow organically and through acquisitions.

Liberty, which is also selling US hedge fund business Ermitage as it concentrates on integrating its recent purchase of Capital Alliance at home, has opened PrefSure's books to potential bidders.

PrefSure has 10,000 policyholders with assets of more than A$200 million ($213 million), its website shows. It provides life, trauma insurance and disability income.

PrefSure said it generated a profit before tax of A$11 million for the year to March and had an embedded value of more than A$125 million, having achieved more than 30 per cent growth in annual premiums during the past five years.

Other companies picked as possible bidders include United States giant MetLife, Asteron, the life unit of Promina and the United Kingdom group Aviva.