Australian wealth management company AMP yesterday announced the sale of AMP Australian and New Zealand wealth protection and mature businesses for A$3.3bn ($2.3bn), following the completion of the portfolio review of its managed for value businesses.
The sale is to Resolution Life Group Holdings, with the deal subject to regulatory approvals and expected to complete in the second half of 2019. The terms and conditions of existing life insurance policies will be retained. Resolution Life is an international insurance and reinsurance group
AMP also has a binding agreement with Swiss Re to reinsure New Zealand retail wealth protection, releasing additional capital of up to A$150m to AMP prior to completion of sale; subject to regulatory approvals.
The agreement is expected to be effective from 31 December 2018 and will cover approximately 65% of the New Zealand retail wealth protection portfolio for new claims incurred from that date.
AMP also intends to divest its AMP New Zealand wealth management and advice businesses via an IPO in 2019, subject to market conditions and regulatory approvals, unlocking further value.
The agreement sees AMP join the likes of ANZ and CBA, which recently sold their life insurance businesses in New Zealand – OnePath Life and Sovereign – to insurance companies Cigna and AIA.
Speaking to the news website interest.co.nz, AMP New Zealand managing director, Blair Vernon, says the trend reflects the fact that "globally there is a more efficient capital pool available to back insurance obligations than necessarily having them embedded in banks and wealth management companies".