The sale of AMP Life to Resolution Life Australia will “significantly simplify” AMP’s group structure, allowing it to focus on its wealth management platforms and products. The sale comprised $2.5 billion cash and a $500 million equity interest in Resolution.
“The sale of the life business is a foundational step in our strategic transformation to become a simpler, client-led and growth oriented organisations,” 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.”
AMP will continue to provide technology and administrative services to AMP Life for a two-year period under a transitional services agreement, and customers’ terms and conditions will remain unchanged through the separation.
AMP without insurance will be like Qantas without planes…
Let the premium increases commence..another great day the the end customer since the LIF came in.
It gave them a billion dollar net cash to pay for the billion dollar loss they made.
The sale of the life business is just an admission by AMP that cannot make money out of their long term core business. I am sure Sir Clive will make money out of if. I am sure AMP kept a 20% stake because they believe Sir Clive will make money out of it. So, if someone else can make money out of it and, AMP believes this to the extent that they will leave $500m invested in it, why can’t AMP make money out of the life business themselves.
Another issue, how much capital from the life business is invested across other areas of the business, namely AMP capital?
AMP looks like a business in long term decline and not a turnaround success story at all. I wonder if the capital raised from the life sale will be used as wisely as the capital used to purchase AXA?
Another sale of a life insurance buisness proves the LIF reforms were simply meant to increase the sale value of businesses that were to be sold. Onepath to Zurich. Asteron to TAL, Comminsure to AIA and now this. So bottom line folks was that in order to achieve a greater sales multiple, insurance premiums went up, while commissions came down to achieve a bigger sale value. These swine lobbied government via a BS report from Trowbridge and set up planners to achieve their ultimate outcome. IFAs and advisers in general lose their minds and business values, their behaviour will never amount to any real penalty as shareholders will pay for any fines imposed on a company. And advisers have to understand ETHICS says FASEA. What a sick pathetic joke.
I wish I could like this comment more than once. Brilliant. Thank you.
Yes so true, but why did planners hitch they businesses to these firms in the first place, relied on them to lobby for them, and why do FPA members continue to support an association that partners with the likes of these and indirectly takes orders from them. You really have only yourselves to blame for your own over regulation and failures.
I see it more the other way round. The life insurance companies were making large IP losses and were looking at reducing some of their input costs by taking it away from advisers. It turned out that this was the same as eating their seed corn and seriously damaged the economics of the life insurance business. In addition, many of the businesses would have been sold regardless as the reputational damage was not at all worth any potential profits.
AMP is trying to offload water from their already doomed ship. No-one will mourn their loss.