19/10/2004 - 22:00

HBF pilot set for take-off

19/10/2004 - 22:00

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A Pilot program at Western Australia’s dominant health fund, HBF, could soon be competing with local financial advisers if all goes to plan.

The Perth-based mutual believes financial planning is one of several fields within financial services where its brand and expertise make it a comfortable fit.

HBF managing director Mike Gurry said the business was currently reaping the benefits of an earlier diversification, with general insurance proving to be a high growth sector after well over a decade of trading.

“Maybe in the public’s eyes it has matured,” said Mr Gurry, pointing to raised awareness of home and car insurance through advertising.

The success of general insurance and other product lines such as travel has prompted HBF to view diversification as the key to growth from its health insurance base where, with more than 900,000 members in WA, opportunities to expand may be limited.

Mr Gurry plays down the ability to grow the health business significantly outside the State, suggesting the strength lies in WA where it is recognised and trusted.

That means using the HBF brand and its huge membership base to expand into logical new lines of business.

“Our services will always be in the financial services area,” Mr Gurry said.

“We want things that are transaction based, that is what we are good at.

“We are the most efficient health fund in Australia, if you look at the largest funds.”

Along with financial planning, areas that are of interest to HBF are savings products, funds management and banking products such as mortgages.

But the group is not charging into all of these, rather approaching its growth options with caution – acknowledging the 15-year gap between the general insurance launch and its arrival as an engine of growth.

Mr Gurry said the long incubation period was a result of starting from scratch in the general insurance field, though quicker results were feasible.

“If you start with some help, a joint venture or someone else already expert in the game, your growth will be a lot faster,” he said.

But don’t expect a flurry of new projects with the HBF chief suggesting that, while the mutual will be engaged in all of these fields, it could ultimately take 50 years.

This attitude is one that HBF can afford to have; being in a mutual it is unassailable from a takeover point of view and less driven for instant results than share market linked competitors.

Mr Gurry rejects any notion that this makes the mutual a sleepy hollow, claiming that HBF’s status as one of the last remaining financial services groups headquartered in Perth attracts good staff who drive innovative product development.

With the financial planning pilot, HBF remains coy about the details and exactly when or if a full-scale roll-out will occur.

However, Mr Gurry confirmed that the project was looking very promising, following response rates of between 15 and 20 per cent from a direct mail campaign to a select group of members representative of HBF’s whole customer base.

“We are targeting different market segments in a controlled way and measuring the results,” Mr Gurry said.

“We are getting huge response rates.

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