Kiwibank is looking to break into the life insurance market later this year.
The New Zealand Post subsidiary made $79.1 million in the year to the end of June, almost four times above last year's result of $21.1 million.
The record annual profit was driven by customers switching from fixed to floating mortgages.
However, Kiwibank is expecting the market to remain flat as people continue to pay off debt, and chief executive Paul Brock says it needs to build a more diversified bank to improve its performance.
He says they've already launched credit-card repayment insurance and the next product will be a term-life product closely tied to customers' mortgages.
Mr Brock says that will be supplied by Kiwi Insurance, a unit of Kiwibank.
He says the insurance market has been largely driven by sales through brokers and it's questionable whether that delivers the best value for customers.
"We believe that we can provide an offering, sold through the bank, that will be best value by comparison to some of those higher cost packages available elsewhere."
Mr Brock expects the scheme to be launched at the end of this year. He says it will be a relatively small investment but should become quite profitable relatively soon.