Lifebroker was founded in 2004 and has grown to be one of the top two largest online providers of life insurance.
TAL has owned a 10% stake in the business for the last three years, and this week moved to full ownership of the business.
Of most interest to me was the amount paid for the remaining 90%, but sadly the purchase price has not been released.
What we do know is that TAL’s parent company, The Dai-ichi Life Company, valued Lifebroker at $28 million in June this year.
Presumably the existing owners would have sought a premium in return for relinquishing their entire shareholding, in which case it would be safe to assume that the final valuation was somewhere in excess of $30 million.
That’s a hefty chunk of money in anyone’s language, and it shows the level of confidence that TAL has in the continued growth of online life insurance.
Unfortunately it also shows how focused TAL is on the direct insurance market, which in my opinion could lead to more Australians taking the DIY approach instead of seeking professional advice.
In case you didn’t know, TAL also owns the InsuranceLine brand which is heavily promoted on television.
What is Lifebroker?
So what exactly has TAL bought themselves?
Lifebroker is a website that allows consumers to compare premiums for life insurance from a range of insurance providers.
In addition to life insurance, consumers can also access trauma, TPD, income protection, mortgage protection and funeral insurance.
Lifebroker compares policies from a range of insurers including AIA, AMP, Asteron, BT, Comminsure, Macquarie, MLC, OnePath, Zurich and of course TAL.
It’s not clear whether or not Lifebroker will continue offering non-TAL products, but based on comments from TAL’s CEO, Brett Clark, it would appear that they will:
“Lifebroker has built a reputation on the objective comparison on life insurance products from a range of different life insurers.”
“We strongly support consumer choice and a competitive life insurance market.”
That’s good news in my opinion, because the last thing we need is another so-called comparison website which only compares products from a single insurer.
Personally I still believe there is a big conflict of interest in an insurance company owning a comparison website.
Hopefully TAL does the right thing and makes very clear disclosures on the Lifebroker website rather than burying it in the FSG.
Provided that they do that, then good luck to them and I take my hat off to TAL for investing in online assets whilst the others are left behind.