AMP has completed the sale of its life insurance business, AMP Life, to Resolution Life.
The deal is valued at AU$3 billion (NZ$3.2 billion) for AMP, part of which is a AU$500 million equity interest in Resolution Life Australia – a new Australian-domiciled holding company controlled by Resolution Life.
Resolution Life New Zealand’s board will be chaired by Anne Blackburn and Resolution Life Australia’s board will be chaired by David Clarke. AMP Life will continue to be governed by an independent board of directors.
In a media statement Resolution Life says its acquisition gives the firm a strategic platform for further growth outside of its traditional markets in Europe and North America, and positions the company “…strongly for future growth in the Australian and New Zealand markets in the coming years”.
Megan Beer, Chief Executive Officer, Resolution Life Australasia and AMP Life, says policyholders will benefit from the continuity of local management “…with a key focus on meeting core promises to life insurance policyholders”.
In a media statement, AMP says that while the final cash proceeds from the sale are subject to a number of post completion adjustments, the company expects the net proceeds to increase its capital in excess of target surplus by approximately AU$1.1 billion.
The company says that any surplus capital will be used to fund a new strategy. Beyond this, it says it will assess all capital management options with the intent of returning the excess above target surplus to shareholders, subject to “…unforeseen circumstances and current economic and business conditions”.
In addition to its 20 per cent holding in Resolution Life Australia, AMP says it will continue to provide technology and administrative services to AMP Life for two-years. All customers’ terms and conditions will remain unchanged through the separation, says AMP.
AMP will provide an update on its future capital framework and strategy on 13 August 2020.