AMP set to sell off NZ assets
The end looks nigh for the AMP brand in New Zealand.
AMP announced yesterday that it had struck an A$3.45 billion (NZ$3.73 billion) deal to sell its life insurance business in Australia and New Zealand to Resolution Life.
And in New Zealand it intends to sell off its wealth management and advice businesses, including its KiwiSaver and pensions management business, by listing it on the New Zealand stock exchange.
That would effectively end AMP’s business in New Zealand.
The deal will see about 200,000 New Zealand insurance policies change hands as Resolution Life takes over the AMP Life business.
The policies include life insurance, trauma insurance, income protection insurance and old-style whole-of-life policies.
The deal follows intense criticism of AMP during Australia’s royal commission of inquiry into misconduct in the banking and financial services industry.
Resolution Life is a United Kingdom business that specialises in buying what are known as legacy life insurance businesses, but will not issue new policies.
Resolution’s founder,
Sir Clive Cowdery, said: ‘‘The acquisition of AMP Life is consistent with our strategy to grow the [Resolution] business beyond our traditional markets in Europe and the United States and we see scope for further consolidation in the Australian life market.’’
Resolution will be allowed to use the AMP brand when communicating with policyholders.
AMP also announced its intention to spin out its New Zealand wealth management and advice businesses through an initial public offering (IPO) in 2019. At the end of June, funds research agency Morningstar said AMP was the fourth-largest KiwiSaver manager with $5.2b of funds under management.
The selloff of the New Zealand assets of AMP is being driven from Australia. AMP’s New Zealand managing director, Blair Vernon, said the sale of the wealth and advice business by IPO was subject to regulatory approvals.
It was not clear whether the listed business would be able to use the AMP brand. ‘‘That’s a detail we haven’t worked through,’’ Vernon said.
Mike Wilkins, AMP’s acting chief executive, assured policyholders there would be ‘‘no change to their existing insurance policy terms or conditions’’.
AMP is one of New Zealand’s most enduring brands, having had continuous operations under the same brand for more than 160 years.
AMP issued its first policy in New Zealand in 1854. It demutualised, and listed on the New Zealand and Australian sharemarkets in 1998.
Over the following decade it bought a number of life insurance rivals, including AXA, but it also sold off its New Zealand banking arm to HSBC in 2003.