New Zealand-based insurer Tower has paid nearly $NZ23 million ($21 million) for a significant holding in Sydney-based insurance direct marketer InsuranceLine as it seeks to grow business among middle-income earners.

InsuranceLine has a call centre in Sydney and has sold Tower life insurance products since 1999.

Tower CEO Jim Minto says the insurer’s existing network of insurance advisers in NZ and Australia is good at reaching higher net worth individuals, but is not so good at reaching people with more modest incomes.

“Tower sees additional distribution channels such as those provided by InsuranceLine as offering significant long-term growth opportunities.”

Mr Minto says he expects life insurance to grow strongly in both countries, where there are levels of underinsurance among middle-income earners.