TradeMe launches insurance offer in partnership with Tower

Trade Me Insurance will offer online home, contents and car insurance in partnership with Tower.

Trade Me Group has launched an insurance scheme, backed by listed insurer Tower, as part of the online auction site's plan to diversify into financial services and boost profit.

Trade Me Insurance will offer online home, contents and car insurance in partnership with Tower, the companies said in a joint statement, which didn't disclose the potential financial impact of the deal.

The new offer adds to Trade Me's life insurance business, LifeDirect, which it bought in 2013.

Wellington-based Trade Me has flagged subdued earnings as it reinvests into its business after posting slower profit growth in 2014.

The company is diversifying beyond its trading website, in a bid to lift earnings growth and spent $7.7 million on a 15 percent stake in peer-to-peer lender Harmoney in January.

Trade Me Insurance "seemed like a natural extension for us into an area where we could do something to change things up," chief executive Jon Macdonald said.

In May, Tower announced it had entered into an alliance with Trade Me. Last year, the Auckland-based company consolidated its business after selling its health, life, and investment units to focus on general insurance.

Trade Me shares last traded at $3.11 and have declined 6.7 percent over the past 12 months. Tower shares were last at $2.15 and have gained 26 percent over the same period.