AMP sells life business, puts Kiwi advice on the block

AMP is to sell its wealth protection and mature business, AMP Life, to Resolution Life and reinsure its New Zealand retail wealth protection with Swiss Re in a deal worth A$3.45 billion.

Thursday, October 25th 2018, 10:11AM

About 200,000 New Zealand insurance policies are involved in the deal.

It also plans to sell its New Zealand wealth management and advice businesses via an initial public offering in 2019 subject to market conditions and regulatory approvals, unlocking further value.

That would include its KiwiSaver and pensions books, and could mean the end of AMP's brand in the New Zealand market.

“The completion of our portfolio review marks a major step forward in reshaping AMP as a simpler, more focused group, that is well positioned to compete in our core markets,” Mike Wilkins, AMP’s acting chief executive said.

“Delivering the right outcome for customers, shareholders and employees has been our focus throughout the portfolio review. For customers, there will be no change to their existing insurance policy terms or conditions. They will benefit from Resolution Life’s deep expertise in managing in-force insurance policies and its commitment to customer service.

“For shareholders, the agreement with Resolution Life and our exit from wealth protection and mature delivers important strategic benefits. It substantially simplifies our portfolio, delivers certainty and frees up capital.

“For employees, it provides certainty of outcome with a business that is culturally aligned with AMP. Our highly-experienced teams supporting insurance and mature customers are expected to largely transfer with the sold businesses, delivering continuity and stability for customers.

“Looking forward, our incoming CEO, Francesco De Ferrari has the mandate to transform AMP. The outcomes from the portfolio review will create greater flexibility as he sets the new strategy for our simplified business portfolio.”

Blair Vernon, AMP New Zealand’s managing director said the local business was highly efficient and well run, and a consistent contributor to AMP.

“A strong team with a history of consistent delivery for all stakeholders has prepared AMP New Zealand for this significant change.

“Importantly, policyholders will retain all terms and conditions of existing policies, so there’s nothing they need to do. There are no changes for AMP New Zealand’s wealth management or general insurance clients, including members of the AMP KiwiSaver Scheme.

“We are communicating with all customers in relation to today’s announcement.”

Sir Clive Cowdery, Resolution founder, said his firm had great respect for AMP’s life insurance business in Australia and New Zealand.

“Over 15 years and the acquisition of 27 life insurance companies, Resolution has developed an operating model which puts delivering policyholder benefits to existing customers at the centre of our business.

“The acquisition of AMP Life is consistent with our strategy to grow the business beyond our traditional markets in Europe and the United States and we see scope for further consolidation in the Australian life market.”

Tags: AMP