IAG New Zealand has confirmed it will step down as the underwriter for Westpac New Zealand’s general insurance portfolio, following Westpac’s decision to appoint Tower as its new insurance partner.
The change will bring to a close a partnership that began in 1994, when Lumley Insurance – acquired by IAG in 2014 – first entered into an agreement with the bank.
An IAG New Zealand spokesperson stated that the company participated fully in Westpac’s recent Request for Proposal (RFP) process – submitting what it described as a comprehensive and robust proposal.
“We have valued the longstanding relationship between our organisations, and naturally we are disappointed by the outcome of Westpac’s RFP process,” the spokesperson said.
IAG said it remains dedicated to working constructively with Westpac throughout the transition.
“We are committed to maintaining our constructive and professional engagement with the Westpac team, as we work collaboratively through this transition period and beyond, while continuing to deliver high-quality insurance services to our customers,” the spokesperson said.
IAG has confirmed it will continue to underwrite all policies that are current at the date of termination and intends to offer renewals to those customers at expiry.
Westpac New Zealand has selected Tower as its new general insurance underwriter, with the transition set to take effect on July 1, 2026.
Tower will assume responsibility for underwriting Westpac’s house, contents, car, and vehicle insurance products.
Westpac described the selection as the result of a thorough review of its insurance distribution model.
Sarah Hearn, managing director of product, sustainability and marketing at Westpac NZ, said the bank’s decision was influenced by Tower’s local ownership and focus on digital innovation.
“We’re pleased to be partnering with an innovative locally owned and operated general insurer with a strong customer focus,” she said. She also noted that customer confidence in claims support remains a priority.
According to Westpac, Tower’s digital capabilities and competitive pricing were important factors in the decision. The bank indicated that customers would gain access to new features through Westpac’s online banking platform, including insights derived from Tower’s risk analytics.
Tower has developed property-specific risk modelling to assess exposure to climate-related events, a capability Westpac plans to leverage in its national adaptation frameworks and efforts to improve transparency around natural hazard information. The partnership is expected to focus on integrating these analytics into the customer experience.
The transition reflects a broader trend in the insurance sector, where digital integration and data-driven risk assessment are increasingly central to distribution partnerships.
For insurance professionals, the shift signals a move toward more technology-enabled services and a greater emphasis on climate risk management.
The change marks a significant development in New Zealand’s bancassurance sector. IAG’s exit from the Westpac partnership underscores the competitive environment for insurers seeking distribution through major banks.
Westpac has confirmed that current policies remain in effect and that no immediate action is required from customers.
Hearn acknowledged IAG’s contribution over the years and said the bank is preparing for the next phase with Tower.
“We look forward to sharing more about the new partnership from July next year,” she said.
