There’s a story that’s been abuzz in the media as of late, particularly in the insurance world. It’s ringing a few bells here with fairy tales, fantasy and traditional folklore. There’s something about a tower, and a powerful entity keeping the tower out of reach. And of course, the story is set in New Zealand, which we all of course immediately associate with The Lord of the Rings trilogy (don’t we?).
But alas, it has nothing to do with the rolling hills of The Shire, or the fiery slopes of Mordor. But it is a thrilling tale with many twists and turns.
Since the beginning of the year, Suncorp’s Vero has been making increasing offers to buy New Zealand insurer Tower. It’s been a lengthy process of bidding and negotiating that the media has kept a close eye on.
But late last month, Insurance News reported that Vero’s application to acquire 100 per cent of the shares in Tower Limited had been rejected by the New Zealand Commerce Commission. The reason? The merger could substantially lessen competition in the personal insurance market. It would bring together the second and third largest insurers in New Zealand – leaving only two competitors. This could lead to high prices and lower quality insurance – which isn’t good for customers.
In a shock twist, however, Suncorp’s Vero has lodged an appeal with the New Zealand High Court over the decision. It’s going to be a dramatic climax as they battle it out in a final court challenge. It sure as hell makes for a good story. And while this story is far from a fairy tale, we’ll still be hoping for a happy ending.
Words by Skye Jamieson