After receiving all of the regulatory green lights in late June, AMP has now sealed the sale of its life insurance business to Resolution Life.
The sale, worth a total of AU$3.0 billion, consists of AU$2.5 billion in cash and a AU$500 million equity interest in Resolution Life Australia, a new holding company that now owns AMP Life. While the final cash proceeds will be determined by a number of post completion adjustments, AMP states that it expects net proceeds to increase its capital in excess of target surplus by AU$1.1 billion.
According to AMP, any capital in excess will first be used to fund the delivery of its new AMP strategy, and then from there it will assess capital management options with the intent of returning the surplus to shareholders.
“The sale of the life business is a foundational step in our strategic transformation to become a simpler, client-led and growth-oriented organisation,” said AMP chief executive Francesco De Ferrari.
“The sale is a major milestone for AMP demonstrating our ability to execute complex projects including through the difficulties of COVID-19.
“It is also a historic moment as AMP ceases to be a life insurer after 170 years. Our life teams will move to Resolution Life and will continue to support clients who will see no changes in their policy terms or conditions.
“We are pleased to partner with an experienced operator in Resolution Life and deliver an outcome that is in the best interests of our clients, policyholders and shareholders.”
The firm also states that the move will simplify its structure with approximately AU$55 million of client funds being moved via several successor fund transfers. AMP will provide technology and administrative services to AMP Life for a two-year period.
