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Ballantyne sets sail with Club Life

The merger of Sovereign and Colonial has opened a gap for a new life company, former Sovereign COO Naomi Ballantyne says.

Wednesday, January 17th 2001, 10:07PM

by Philip Macalister

Former long-time Sovereign staffer Naomi Ballantyne is planning to establish a new life insurance company in New Zealand that is modeled on the original Sovereign Assurance.

Ballantyne, who joined Sovereign 12 years ago but suddenly resigned her position as chief operating officer late last year, is currently looking for capital to set up a new business called Club Life.

She left Sovereign to set up a new business as she felt the company had got away from its original philosophies and was now like all the other big life offices.

These changes had been brought about by the new owners, ASB Bank, and its decision to merge Sovereign and its other recent acquisition, Colonial, under the Sovereign brand name.

Ballantyne says this sort of rationalisation in the market has created room for a new player.

"The Sovereign and Colonial merger has resulted in a lack of choice for independent brokers," she says. "They now effectively have only one carrier."

Club Life will be like Sovereign Mark II and strongly focussed on using independent brokers for distribution.

It will have a standard range of life products, and is considering having an insurance/investment product.

The new company plans to compete not on price, but on service and giving brokers a stake in the business.

"Products and price are not our value proposition," she says.

Club Life will only deal with a limited number brokers and they will be offered shares and options.

"It will be almost an exclusive club," she says.

Ballantyne says the brokers Club Life are interested in are the ones that write the most valuable business, not the most volume. The key value driver is persistency, not sales.

Ballantyne says Club Life has secured some seeding capital and is now in the process of trying to raise up to $10 million to get the business going.

One rumour circulating the industry at the moment is that Sovereign founder Chris Coon is helping fund the business. However, Ballantyne says that is not the case.

Club Life has recruited a number of key people to the business, but their identities are being kept under wraps at the moment.

Likewise, it is in discussions with an unnamed reinsurer.

Club Life is a registered company, and it is in the process of setting up offices in Browns Bay on Auckland's North Shore, but it has not yet placed its $500,000 bond (which all life companies have to do) with the registrar of companies yet.

You can read Philip's blog here: http://www.goodreturns.co.nz/blog/

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