Seniors Money International (Sentinel)

New Zealand company Seniors Money International is pioneering the Home Equity Release market internationally, writing about $40 million worth of loans each month, helping retirees free up equity in their homes without having to relinquish ownership or make regular repayments.

For a business that started in 2004 just in the New Zealand market, Senior Money’s expansion has been remarkable, says Group Managing Director Richard Coon.
“We are now in seven markets, our loan book is around $800 million and we have done 15,000 loans worldwide. In terms of home equity release we are one of the world’s top five businesses and the only multinational with about 80 percent of new business from export markets.”

The company specialises in the lifetime mortgage version of Home Equity Release (HER), helping people aged over 60 release some of the value they have built up in their home. Mr Coon says the biggest reason by far for borrowing is home maintenance and improvement; for others it’s for anything from repaying existing debt to buying a new car, helping the family, travel and medical procedures.
The structure of Senior Money’s HER product is a loan secured by mortage over the borrower’s residental propery. The company generates revenue primarily through interest margins from the loan, which is usually repaid from the borrower’s estate.
The team behind Seniors Money are the founders of New Zealand insurance company Sovereign, including Richard Coon and his brother Chris, Seniors Money’s Director and Actuary. 

 “After leaving Sovereign we sat down to have a look at developing a home equity release product. At that time we had no idea how mainstream it was going to be,” recalls Richard Coon. “We thought we might initially sell a couple of loans a week in New Zealand, grow relatively slowly and then perhaps expand into Australia. We certainly weren’t thinking worldwide.”

Launched in 2004, Sentinel, the original Seniors Money company, is now a well-known brand within New Zealand. The company adopted a strong strategy of market penetration through advertising and community involvement, aiming to capitalise on first mover advantage. The level of interest was such that the company rolled out in Australia three months after the New Zealand launch instead of waiting two years as planned, and in quick succession launched in Ireland, South Africa, Spain and Canada.

While Seniors Money’s preferred strategy is a wholly owned operation it has recognised it doesn’t have the resources or capital to do that in every export market, so it goes into strategically important markets on a wholly owned basis, which become hubs to expand into neighbouring countries, and in other markets enters into joint ventures with local companies.

Mr Coon says the demographics driving the need for HER are the same in most developed countries - an ageing population, increasing strain on Government providing pensions and health benefits, but at the same time a significant increase in property values.

“This is a market that will grow rapidly in every country in the developed world. Research of current retirees suggests an eventual take up of over 20 percent, but similar questions put to the next generation of retirees, the baby boomers, suggest much higher levels.”

Seniors Money employs 100 people worldwide, and is strong in banking and insurance skills. It also taps into its extensive international networks to attract high profile board members - the international board is chaired by ex-Prime Minister Jenny Shipley, while consumer advocate David Russell is a director on the local Sentinel board along with Chairman, Boyd Klap, previously CEO of Prudential Life.
Being specialists in the HER market, speed to market, innovation and flexibility are key success factors for Seniors Money, says Mr Coon.

 “We have the ability to roll out internationally very quickly and now know what the issues will be and how to resolve them. By focusing on New Zealand and Australia before launching further afield we had the opportunity to learn in familiar markets.” 
A major challenge is that HER is a totally new product in most markets. As well as presenting a big opportunity, it also means a labyrinth of regulations to navigate and even law changes needed in some markets. Mr Coon says the company spends about $1 million upfront in each market to get this right.

“We also do a huge amount of research before we go into any new market. It’s very tempting to say markets are all the same because they speak English, but they are often vastly different and you have got to understand those differences but try to keep the core of your product the same.”

Mr Coon says the growth of Seniors Money has been tremendously exciting. “The great thing is dealing with this age group and being able to help them. It’s wonderful the letters that we get from people whose lives we have turned around.”

Contact: Richard Coon, Managing Director, Seniors Money International, phone 09 487 2302, email richard.coon@seniorsmoney.com