In what represents a major change to the Australian life insurance dynamic, Hannover Life Re has told customers it is exiting the direct group market to focus on reinsurance.
The move, which is understood to be due in part to the Government’s recent policy changes impacting insurance inside superannuation, has been communicated to Hannover Life Re’s clients over the past few days.
In a communication to clients, the company said it had “made a strategic decision to focus on reinsurance to bring us into alignment with our global strategy”.
“As you can appreciate, a decision of this magnitude is not taken lightly and has been carefully considered. Hannover Re is in a strong financial position and confirm this change is not a reaction to the current global pandemic,” the letter said.
“As part of our strategy, as a reinsurer, we remain dedicated to the group insurance market in which we will utilise our long-standing direct group insurance expertise.”
The company had sought to reassure it clients in the direct group market that its exit from the segment would not be immediate and that they would be provided with a roadmap of the process along with the possibility of other insurance options.
“We envisage the success of our strategy will change the way we do business in Australia,” the firm said.
“Only a small number of roles within Hannover Re will be impacted immediately by this decision. For everybody else there will not be any significant changes in the medium term.”
“This will be a lengthy transition. We will use this period to support our team by looking at new opportunities in the business for our people given their outstanding industry and technical expertise, and the unique value we create where their skills and experience are applied to our business in a reinsurance capacity.”