AMP aims at banks once AXA deal done

AMP New Zealand managing director Jack Regan says people need to think of the company’s proposed takeover of AXA as the creation of a new business, rather than one company subsuming a rival.

Tuesday, November 30th 2010, 5:00AM 6 Comments

AMP and AXA's parent company signed binding transaction documents for the A$13.3 billion deal.

While the deal looks close to being done it still requires shareholder and some regulatory approvals.

Regan says document signing yesterday allows the deal to move to the next stage of due diligence.

No integration or merger work has been done yet.

However, he talked up the deal and said that the combined organisation would provide good competition for the banks in New Zealand.

Currently banks dominate the financial services distribution landscape and account for 56% of all life insurance business written each year.

Although there is discussion about how well the two organisations will fit together Regan says "there is a strong cultural alignment between the two businesses".

He says the cultural fit "will probably be a pleasant surprise for most people".

His view is that AXA won't just become part of AMP, rather both companies will change.

"We (AMP) will be a different organisation going forward."

"I see a new organisation being born out of two organisations coming together."

Regan says the creation of a new organisation will take quite a lot of time, taking years not months.

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Comments from our readers

On 30 November 2010 at 8:38 am John said:

Jack Regan says AXA won't just become part of AMP, rather both companies will change. "We (AMP) will be a different organisation going forward." Ok lets just sit back and watch how that statement still sounds in a year or two with AXA advisers.

On 30 November 2010 at 9:07 am Cynical said:

So is the cultural alignment 2 mediocre companies becoming 1 what? Announcing war on banks when you have capabilty that does not come close and or the easy access to capital is a little proud. We would love to see an insurer that understands do this but its unlikely to be AMP. AMP will mimic banks with kiosks and transactional engagements, not relationships. Mushy headed wishfullness and capital wasting whilst executives with musk coloured shirts consider they actually understand the industry, yawn... the 1's that come from banks should go back and the accountants should remain accountants.

On 30 November 2010 at 10:22 am John said:

Regan says "there is a strong cultural alignment between the two businesses". From my dealings with AMP (and I'm sure other advisers would support me on this statement) the "culture" at AMP is one of arrogance and ignorance of what other providers are doing in the marketplace. AMP and AXA then are as different as night and day.

On 30 November 2010 at 1:24 pm Cynical said:

In fact Regans comments demonstrate an attitude. There needs to be a hih level of trust for and adviser relationship to function. Just as when advisers are dealing with their clients. Company executives who have not had real Insurance experience (they may have other skills) forget that "people percieve your intent". Thank god they are not selling as they would not be earning what they do now!

On 3 December 2010 at 3:23 pm Bruce said:

The best result for both AMP from this take over would be if AMP dumped most of it's current products,systems and especially attitudes/culture and adopted AXA's. AMP just has so much to learn from the way AXA does things and it's (mostly) excellent products. If AMP can just put aside their well known infamous arrogance they will benefit hugely from this take over

On 7 December 2010 at 1:56 pm Sircam said:

AMP is well behind the game in product development, advisor relationships. Acquisitions is one answer but in my dealings with AMP and I did try to use their products but I found them a very aloof and inward looking company and I might add people outside the industry feel the same way. God help AXA.
They say when you can't make change then you have a culture issue. The smart money will be on Naomi Ballantyne any day. Practical solutions and really understands the industry. Sometimes I attend seminars and the captains???? of f these insurers speak with profound belief in the company and why I should commit to them I say to myself ok is this my sort of leader/ company I would sacrifice myself and 80% of the time the answers no way.
It’s about the people not the product.
Good luck