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Commission declines Vero Insurance clearance to acquire Tower

26 July 2017

The Commerce Commission has declined to grant clearance to Vero Insurance New Zealand Limited to acquire up to 100% of the shares in Tower Limited.

The merger proposed bringing together the second and third largest insurers for domestic house, contents and private motor vehicle insurance in New Zealand leaving only two substantial competitors in the market post-merger.  

Chairman Dr Mark Berry said that the Commission was not satisfied that the merger would not have the effect of substantially lessening competition in the personal insurance market.

“The merger would remove Tower as the only independent competitor to Vero and IAG with the scale, brand strength and experience to compete effectively across the breadth of personal insurance markets. While there are other smaller competitors in personal insurance, we do not consider that they replicate the level of constraint that Tower imposes. Without the competition that Tower provides, there is a real risk that consumers would end up paying higher prices for insurance cover while receiving lower quality, such as reduced insurance coverage,” Dr Berry said.

“Relevant to this competitive landscape, Tower is making concerted efforts to reposition itself in the market and improve its performance. There is also a real chance that Tower would be purchased by a third party further enhancing Tower’s significance as an independent competitor in the market.”

A copy of the Commission’s decision will be available on the Clearances Register within the next week.



Vero is a New Zealand subsidiary of Suncorp Group Limited, an Australian-based finance, insurance, superannuation and banking business. Suncorp, through Vero and AA Insurance, provides a range of personal and commercial insurance products direct to customers and through insurance brokers and banks (ANZ, AMP and Warehouse Money).


Tower is a New Zealand based insurance company listed on the New Zealand and Australian stock exchanges. It offers insurance direct to consumers and through Kiwibank, TSB and Trade Me.


IAG is a wholly-owned subsidiary of Insurance Group Limited listed on the Australian Stock Exchange. It provides personal and commercial insurance products direct to consumers under the State and AMI brands, and through BNZ, Westpac and via brokers under NZI and Lumley.


Summary of insurance brands and ownership

Owner or underwriter of insurance  Own brands Banks and key other partners
IAG AMI, State, NZI and Lumley BNZ, Westpac, SBS, Co-op, HSBC
Suncorp Vero, AA Insurance ANZ, Warehouse Money, AMP, Turners
Tower Tower Kiwibank, TSB, Trade Me