KiwiSaver provider moves into insurance

Business Editor·NZ Herald·

6 Sep, 2015 07:00 PM2 mins to read

Martin Lewington, chief executive of Mercer New Zealand.

KiwiSaver provider Mercer is set to expand into the insurance market for the first time in a bid to capture more savers.

Mercer which has around 100,000 people signed up to its KiwiSaver scheme is to offer life insurance and bill protection insurance in a white labelled product provided through Cigna Life Insurance.

Members of its KiwiSaver scheme who buy the insurance policies will also get an additional function called KiwiSaver protect which will pay $200 per month into their KiwiSaver scheme for up to six months if they are unable to work due to illness, disability or lose their job through redundancy.

Mercer chief executive Martin Lewington said the KiwiSaver function would mean people were still able to get the government's $521 annual contribution even if they lost their job or were unable to work.

Lewington said it was the first time Mercer had moved into the direct insurance sales market in New Zealand.

"This is very new territory for Mercer."

Lewington said it made the call to launch the new product after research showed people expected their KiwiSaver provider to also offer insurance.

The research also found 30 per cent did not have any insurance and 60 per cent of those it surveyed were under-insured.

"Our most valuable asset is the ability to earn income yet so many people haven't bothered to protect that."

Mercer would target selling the product to its KiwiSaver members first but would also sell directly to the public, Lewington said.

The KiwiSaver protection aspect is only available to its members and those who leave the scheme also lose that function although the insurance continues.