MLC Life Insurance gets capital injection

In a statement, MLC Life Insurance said both its majority shareholder Nippon Life, and former owner and minority shareholder NAB would make a combined capital injection of $650 million to its operating entity, MLC Limited.

The additional capital would be divided into two parts - a $530 million ordinary equity issue from Nippon Life and NAB to be contributed proportionally based on their shareholdings in MLC Life, and $120 million of Tier 2 capital notes to be subscribed to by Nippon Life.

MLC Life chief executive Rodney Cook said the fresh funding would set the life insurer up to “survive and thrive” beyond the challenging business conditions of COVID-19.

“Today’s announcement demonstrates the emphatic support of our shareholders and their backing of our strategic direction,” Mr Cook said.

“It provides real security of policyholder benefits, meaning we will continue to deliver on the promises we make to our customers and business partners.”

Mr Cook added that MLC Life would benefit from Nippon Life’s “long-term view” of the Australian insurance market.

“This additional capital also supports our strategic goals,” he said. 

“These include playing a larger role in the group insurance market, developing the industry’s leading claims function, and making it more efficient for advisers and superannuation funds to provide insurance to their customers through the use of technology.”

The news comes following the latest Plan for Life statistics that revealed MLC Life had seen a 7 per cent decline in risk premium inflows for the year ended June 2020.

It also follows a number of dismal sales statistics for the Australian life insurance market overall, which has been struck by investment losses as a result of COVID-19 volatility and recent regulatory restrictions on both the group and retail insurance channels.