YBR and MetLife strike mortgage insurance deal - SMH (08 September 2015)
Yellow Brick Road has signed a deal with US life insurance giant MetLife to sell mortgage insurance,ahead of thelisted wealth group's plans to offer life and income protection products from early 2016.
YBR, which has a market valuation of $122 million, is rolling out its "Yellow Brick Road Loan Protect" and "Vow Loan Protect" mortgage insurancein October.
The products, which are underwritten by MetLife, will be sold via the lender andwealthgroup'snetwork of 255 licensees and 850 Vow Financial brokers.
"We've got clients every day that will be settling large loans;when you take out a loan that size, you want to make sure you're protected," YBR chief executive Matt Lawler said.
"We've been concentrating on the acquisitions more recently ...and ourmortgage strategy(partnering with companies such as Macquarie Group).We have built strong branch and broker channels and with our scale, the timing is right toacceleratedistribution of a high-quality, white-labelled insurance product."
The deal comes afterYBR bought mortgage aggregator Vow Financial Holdings for $17.6 million last year.
Mark Bouris, executive chairman of Yellow Brick Road, said Australians still lacked insurance to repay their mortgages if something unexpected happens.
"When a person secures a mortgage, it is generally the biggest debt they will take on in their life.A core part of our business at Yellow Brick Road is to provide our customers with protection against the unexpected," he said.
Mr Lawler said the company is looking to introducelife insurance and income protection products from early next year. The life products will include new remuneration structures with limited commissions for financial advisers, following sweeping regulatory changes in the life insurance industry.
The company will be ramping up its efforts to train the company's brokers and planners to provide life insurance advice.
"We have built strong branch and broker channels and with our scale, the timing is right to accelerate distribution of a high-quality, white-labelled insurance product," Mr Lawler said.
This is the second major deal for MetLife outside of the superannuation sector in Australia. Late last year,MetLifestruck a deal with listed insurance broker Steadfast Groupto selllife insurance policies to small and medium enterprises.
The YBR deal marks MetLife's first major foray into the retail life space.
"Clearly we're partners behind players such as Coles, for example, which are retail, but this is certainly the first (deal) with the financial adviser in mind," saidDeanne Stewart,chiefexecutive ofMetLife.
"The broker market has been underserviced for some time. This partnership is a means for MetLife to address that service gap with a quality retail insurance offering, utilising Yellow Brick Road's strong network of advisers and brokers."