Health insurer Southern Cross Healthcare and Royal & SunAlliance are forming an alliance to provide workers' compensation insurance resulting from the deregulation of the state-owned ACC. Good Returns understands other companies looking at this market include: FAI, MMI, HIH, State Insurance, NZI, GIO and Farmers Mutual Group.
The yet-to-be named alliance between Southern Cross and Royal Sun will operate as a separate brand from the existing organisations.
Royal & SunAlliance chief executive Alan Bradley says the alliance expects to secure between 25 to 30 percent of the workers' compensation premium pool, which he estimates will be worth $1.2 billion.
The key to the alliance is the complimentary capabilities of the participants. Royal Sun is the country's third biggest general insurer and Southern Cross is New Zealand's largest health insurer. Both have a strong presence in the corporate sector.
Under the alliance Southern Cross will handle the claims aspects of the business, specifically claims handling and relationships with medical providers. Royal Sun will be the registered insurer and will provide overall management and underwriting of the workers' compensation insurance business and manage claims for weekly entitlements.
Bradley says that despite Labour Party pledges to reverse legislation currently being prepared to enable competition in the ACC market, he was confident the reforms would proceed.
"Based on the current legislative timetable, the alliance expects to be active in the market by April 1999 and fully operational by the time the legislation takes effect on July 1, 1999."
The bill enabling deregulation of ACC is currently being heard by a parliamentary select committee and Bradley expects it to be passed into law by Christmas.
Health insurer Southern Cross Healthcare and Royal & SunAlliance are forming an alliance to provide workers' compensation insurance resulting from the deregulation of the state-owned ACC.