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HBF sells General Insurance Business to CGU

HBF Managing Director, Rob Bransby, said that having established HBF as a trusted local general insurer for more than 20 years it had become clear that HBF’s interests were better served as a distributor rather than manufacturer of general insurance products.

Under a distribution agreement HBF branded products such as home & contents, motor and travel insurance will be distributed by HBF and underwritten by CGU over the next ten years.

“This is a deal which makes sense for HBF itself and HBF policy holders.  It means we’ll continue to distribute competitive general insurance products but these will now be provided by an insurer with all the advantages that scale provides,” Mr Bransby said.

Mr Bransby said that in recent years Western Australia’s general insurance sector had seen the entry of large overseas, eastern states-based and on-line insurers. 

“It’s become clear to us that it will be increasingly difficult for HBF to compete effectively as a small local player against insurers who have massive advantages in terms of scale and technological infrastructure,” Mr Bransby said. 

“CGU has a 160 year track record of providing insurance to Australians.  Its resources mean it will ultimately be able to offer our members a greater range of products and services.”

Mr Bransby said that the choice of CGU was based on a strong cultural fit, the value CGU had placed on HBF’s general insurance business and its commitment to provide high quality service for existing and future policy holders.
 
“A critical consideration was CGU’s agreement to employ the great majority of HBF’s general insurance team in Perth” Mr Bransby said.

Peter Harmer, CGU CEO, said that CGU had been attracted to a partnership with HBF “because of its iconic brand, loyal membership base and its alignment with CGU’s values in relation to customers, service and our people.” 

The sale of HBF Insurance will have no immediate impact on HBF general insurance policy holders, including HBF Health members who will continue to enjoy member discounts when purchasing HBF general insurance products. 

Mr Bransby said the sale of HBF Insurance would help ensure HBF could focus on its core health insurance business and giving members access to the highest quality health care.

“Although HBF is a not-for-profit organisation, we have a responsibility to be commercially focussed to ensure we build our financial strength for the good of our members, and this deal does exactly that,” Mr Bransby said.

HBF has employed the services of KPMG Corporate Finance as advisers in the sale of its general insurance business.

Media contact: Andrew Walton, tel: 0438 925 050 / 08 9265 6181