National-T and G merger ‘smooth’

Press, 7 April 1984, Page 24

National-T and G merger ‘smooth’

The merged National Mutual T and G life assurance group has been running very smoothly since it was formed a year ago, according to the chairman, Mr G. M. Niall. Mr Niall, who was a director of National Mutual Life Association of Australasia since 1953 and its chairman since 1965, described himself in Christchurch yesterday as a “nonworking director" — but the managing director, Mr E. A. Mayer, said that the term “non-executive director” might be better “because the chairman is extremely hard-working.” Mr Niall and Mr Mayer were on a four-day visit to New Zealand to look at the company’s activities here. In Mr Niall’s words, they came “to listen to problems and hear suggestions.” T and G Mutual Life, Ltd, and National Mutual Life began trading as a merged company on April 1, last year, and Mr Niall said that

as a lawyer, and having been involved in a number of company mergers, this one had easily been the smoothest that he had dealt with. The merger had allowed for economies of scale, as mergers should do, and also greater marshalling of funds so that they could be concentrated on a particular project if necessary, he said. As had been guaranteed at the time of the proposed merger there had been no redundancies resulting from the two companies meshing, although some staff had opted to take (voluntary) early retirement. “In fact, there was tremendous good will among all the staff,” he said. Mr Mayer said that there had been little reaction from policy-holders in Australia when the merger had been first proposed. For the merger to be achieved in Australia, National Mutual had to

write to between 600,000 and 700,000 T and G policyholders informing them of the merger and allowing them time to place objections in time for a Federal Court hearing on the scheme, or to appear personally at the hearing. A total of five replies

were received, three from the one policy-holder who had been disgruntled about the handling of a disablement claim and one “from an old lady in Bendigo” who was sad to see two such fine, traditional assurance companies ending in a merger.

“And there was nothing wrong with that point of view,” Mr Mayer said. After the merger had been approved, National Mutual was again obliged to write to the T and G policyholders to give certain statutory information. Included with this letter was a little card for policyholders to return if they required further information on the range of services that the new group could provide. “Usually with this type of reply the return rate is between 1 and 2 per cent, but we got a rate of return of 11 per cent.”

Mr Niall said that there were big similarities be-

tween the Australian and New Zealand activities of the company, but the Australian firm was also involved in areas such as merchant banking. “We have been looking at becoming involved in sharebroking (since the deregulation of the Australian broking industry) and there has been talk in the press that we are the question of a banking licence.”

The New Zealand company could easily become involved in merchant banking, he said. Mr Mayer said this was where a “spin-off effect came in. Although the Australian and New Zealand companies were independent of each other in trading, often the experiences of one helped the other in setting 'up new areas.

Except for a management fee for use of an international computer linked with National Mutual’s head office in Melbourne, the New Zealand company retained all its own profits.