Post picks A&G as insurance partner

Australia Post will follow the lead of many of its offshore counterparts and begin to sell car, household and travel insurance. Post steered publicity for its push into insurance into metropolitan newspapers today.

Post selected Auto and General Insurance Company as its insurance partner.

Car insurance will be the first product promoted, followed by household insurance and travel insurance.

A&G is a minnow of the insurance market. Based in Brisbane, and with no retail distribution outlets of its own, it earned a profit of $6 million on premium revenue of $135 million in 2008, financial data published by APRA shows.

The market share of A&G is around 0.4 per cent of all general insurance premium revenue.

A number of traditional postal monopolies in the northern hemisphere market insurance products. Based on those precedents Post may be aiming for a market share of as much as two per cent.

Post needs to develop additional revenue streams from its network of more than 4000 branches and agencies.

Traditional transactions, including agency banking services and bill payments, have declined.

Post's 2008 annual report shows a five per cent decline in banking services, to 26 million transactions, over the year to June 2008. There was a three per cent decline in bill payment services, to 155 million transactions.

At this stage Post denies any revived plans to extend its narrow range of agency-based banking services.

Post management has looked into investing in developing a limited banking business in the past, having considered the merit in becoming an issuer of debit and credit cards, as well as becoming an outright acquirer of payments.