Countdown, the New Zealand supermarket chain owned by Australian retailer Woolworths, is adding insurance services as it seeks to widen the offering to its 2.7 million weekly customers.
Auckland-based Countdown will partner with Cigna Life Insurance New Zealand, the local unit of US insurer Cigna Corp, to offer bill protection and pet, travel, accidental death and life policies, the company said. Countdown expects the products to be competitively priced in the "bottom quartile" for such services, it said.
Supermarkets and other retailers are expanding their offerings to benefit from relationships with existing customers and diversify their company earnings. In Australia, Woolworths operates a home improvement chain, liquor stores, mail-order clothing, general merchandise stores and financial services alongside its supermarkets while in New Zealand, discount chain Warehouse Group is expanding into financial services and specialist retailing.
In the past two years, Countdown began partnering with pharmacies to offer instore services in seven of its 171 supermarkets and launched a Visa card in partnership with GE Capital.
"We think that insurance actually fits with our business pretty neatly," said Countdown managing director Dave Chambers. "Food retailing will continue to be, for as far into the future as we can project, the core and the strength of our business. We believe there are some other categories of products where we can collaborate with others to bring some expertise to try and bring some more competitive, and hopefully some lower prices, to New Zealanders for everyday needs."
While all businesses were looking for growth, insurance isn't expected to deliver a material benefit to earnings in the first few years, Chambers said. He declined to provide company forecasts, citing confidentiality.
Research commissioned by Countdown found that while 89 percent of people had car, house or contents insurance, just 46 percent had personal insurance. Reasons cited for not having cover was the expense, that people were busy or wouldn't use it.
The insurance services will be offered online or over the phone, not instore, the company said.
Countdown, which competes with supermarket cooperative Foodstuffs in New Zealand, is scheduled to release its first quarter sales data today through its Australian parent.