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.
MLC have imploded and god help the company who picked up the old MLC CEO. Just goes to show its not what you know just who you know.
I wonder what happened to MLC sales? They had such a wonderful result in the back half of 2019 but then the CEO, CFO and CTO randomly resigned and now they’re in strife? That is what you call a corporate failure.
Nab could have just saved themselves 120 mil but not kicking MLC off their legacy technology 12 months too early.
NAB wanted the LIF changes so are reaping what they sowed. All insurance companies have issues with inefficiencies but being not able to return a phone call or provide information to an adviser is where MLC is a world class performer.
[b]ASIC, Pollies (O’Dwyer and Frydenburg especially) and FSC[/b][b][/b], isn’t it wonderful to see sales of Life insurances continue to drop and premiums for existing policy holders sky rocket.
[b]LIF HAS BEEN SUCH A SUCCESS HEY !!!!!!!!!!!!!!!!!!!!![/b][b][/b]
How very true. These economic vandals masquerading as our “leaders” needlessly cut our industry to shreds to satisfy their greedy key interest groups; banks, super funds, many insurers, unions as well as a large section of our jealous cousins from the wealth wankery side of the family. All of it done without a snifter of an independent cost/benefit analysis. This is a very predictable karma brought upon MLC.