Western Australia-based health fund HBF has offloaded its general insurance business to national giant IAG’s subsidiary, CGU, for an undisclosed sum as part of a strategy to focus on its core business.
Western Australia-based health fund HBF has offloaded its general insurance business to national giant IAG’s subsidiary, CGU, for an undisclosed sum as part of a strategy to focus on its core business.
HBF-branded insurance policies, such as home and contents, motor and travel insurance would continue to be sold by HBF under a distribution agreement, but underwritten by CGU.
The HBF move comes amid speculation that WA’s biggest home-grown private health provider, St John of God Health Care, was looking for a buyer for its pathology service.
St John of God is a major private hospital operator across Australia and New Zealand but its pathology footprint, despite being the nation’s fourth biggest, extends only to Victoria outside its big presence in WA.
St John of God would not comment on the possibility of divesting the pathology business. Last year the group’s CEO, Michael Stanford, warned of a shake-up in the pathology business as a result of changing federal government policy and suggested St John of God may participate in the rationalisation process, most likely as an acquirer rather than a seller.
In another not-for-profit move in recent years, motor vehicle owners group RAC paid $104.6 million to bu out long-running joint venture insurance partner Suncorp-Metway. RAC is considered WA’s biggest locally owned financial services business.
In its most recent annual report, HBF flagged the difficult market conditions for health insurance created by federal government policy and competition.
HBF’s sale of the general insurance business comes just over a year after what it said was the biggest challenge that division had faced, dealing with the impact of the hail storm that hit Perth in March last year, generating more than 16,700 claims totalling over $68 million.
HBF managing director Rob Bransby said in a statement the group’s interests were better served as a distributor rather than a manufacturer of general insurance policies. Mr Bransby said the sale of the general insurance division would allow HBF to focus on its core business of health insurance.
“Although HBF is a not-for-profit organisation, we have a responsibility to be commercially focused to ensure we build our financial strength for the good of our members, and this deal does exactly that,” Mr Bransby said.
“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.”
In other not-for-profit news, motor trade cooperative Capricorn Society is seeking a new chief executive officer after announcing in April Trent Bartlett would leave the repair and service cooperative in the second half of this year, after 10 years as its CEO.
