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MLC Life’s group strategy takes shape
What a difference a change in ownership makes. MLC Life has already started to make new inroads into the group life space and has ambitions to grow further.
When Japan’s Nippon Life last year acquired 80 per cent of the MLC business from National Australia Bank (NAB), MLC Life chief executive, David Hackett made no secret of the company’s aspirations with respect to the group space albeit that his comments generated a certain amount of industry scepticism.
Now, barely 12 months since the Nippon Life transaction was inked, MLC Life has picked up a strategic industry fund mandate and is in the tender mix for others.
Speaking to Super Review, MLC Life chief customer officer, group insurance, Suzanne Smith confirmed the level of substance which had been delivered on the back of Hackett’s aspirational comments of 2016 pointing to the firm’s mandate with Queensland’s Energy Super and the potential advantages it will derive from a new platform based on new technology.
While acknowledging the relative dominance of TAL and AIA Australia in the group space, Smith said she believed the sector had already been the subject of change and that there was plenty of room for a player such as MLC Life.
“One thing that we know for sure is that change is inevitable and you never know what is going to happen,” she said.
“Eighteen months ago there were a few more dominant players in the market and we now see that there is an opportunity for us to be another strong player in the market,” she said in reference to some key insurers lowering their sights on the group space.
“We’re actively competing now. Being invited to the table. We’ve maintained a relationship with the consultants as industry gatekeepers and have been actively invited to attend the meetings and [we’re] working on tenders as we speak.”
Smith confirmed that MLC Life sees the company’s success in last year gaining the Energy Super income protection mandate as a pivotal moment describing it as the firm’s “flagship industry fund” and a client through which it can confirm its capabilities.
However Smith while acknowledging the firm’s desire to grow in the group space, was reluctant to put any numbers on the table, believing that the capability delivered via a new platform will help underpin future growth.
She said it was obvious that TAL and AIA had the “lion’s share” of the group market, but suggested that not all superannuation funds wanted to deal with the dominant players.
“TAL and AIA have the lion’s share but not all funds want to be with the largest players and funds,” Smith said. “Many funds will find themselves well served by working with someone who isn’t the largest.”
“[It] would serve them very well working with us. We will continue to chip away and put our capability forward.”
Technology and the absence of significant legacy systems clearly sit at the heart of the MLC push into the group space, with Smith saying that new technology and digital capability would allow the firm “to engage with funds and through them to their members providing a broader support to the fund”.
But backing up the technology is a larger workforce, with Smith confirming that in past 18 months she had grown the group team from 38 personnel to the high 50s with plans to further strategically grow.
The focus on personnel growth has been in Melbourne, but she said resources would be put in place where they were needed.
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