Leadenhall invests in Integrity Group
London-headquartered specialist insurance-linked securities (ILS) and reinsurance linked investment manager Leadenhall Capital Partners LLP has backed a new start-up life insurance operation in Australia, named Integrity Group Holdings Limited.
Integrity Group aims to disrupt the Australian life insurance market at a time when the sector is consolidating to only a few, very large players.
Led by Chris Powell, former chief financial officer of Zurich Australia and chief operating officer of Centric Wealth, Integrity Group sees an opportunity to leverage the latest technology as well as efficiency in its operations and capital backing, to break into the market and take share away from the major players.
Powell explained, “The Top 10 life insurers hold 96 percent market share – we are about to see their number reduced to a top seven or six. This means there is a place for new operators to disrupt the market with differentiated products and services.”
Integrity Group has received over USD165 million of backing, both equity and debt, from investors in Australia and overseas, with one of the overseas backers being USD4.5 billion ILS investment manager Leadenhall Capital Partners who has represented certain investors.
Leadenhall has participated in the debt arrangement part of the financing of Integrity Group, on behalf of and representing certain of Integrity’s key investors. The debt facility features loss absorbing features against mortality and lapse rates deviating significantly from expectations, which is a requirement of the Australian Prudential Regulation Authority.
Integrity plans to leverage technology and financial advisers in its approach to life related insurance product sales. The insurer has acquired QBE Life (Australia) Limited from QBE Insurance Group Limited for USD21.7 million, as a vehicle to kick-start its operations and after it has been renamed to Integrity Life Australia Limited it will underwrite the life insurance component of QBE’s consumer credit insurance suite sold through Financial Institutions.
