New Zealand insurer Tower has announced it will acquire rights and obligations relating to a portfolio of Kiwibank’s insurance policies.

The agreement will see Tower, which underwrote the policies, pay $NZ5.9 million ($4.49 million) to acquire legacy insurance books and migrate them to Tower Direct.

Over the past year, the insurer has spent $NZ26 million ($19.8 million) to purchase books from ANZ, Westpac, TSB and Kiwibank to enable it to “have a direct relationship” with customers.

Tower CEO Blair Turnbull says the deals allow the insurer to secure “mutually beneficial partnerships” that will “drive significant, sustainable growth”.

“Having completed our legacy book acquisitions, we are continuing to focus on building our progressive partnerships model, with both new and existing partners including TradeMe Insurance, TSB, Ray White, NZ Financial Services Group and NZ Defence Force,” Mr Turnbull said.

Tower, which has provided insurance to Kiwibank customers since 2006, says the premiums from the portfolio contributed $NZ12 million ($9.14 million) to its Gross Written Premium for the 2022 financial year.

Mr Turnbull says the agreement will not require customers to take any action but will see their policies redirected to a different communication channel in the future.

The deal is expected to be completed on December 1.