AMP have reached revised terms with Resolution Life for the sale of their life insurance business. The original sale agreement stalled in July when it was blocked by the New Zealand regulator.
The Reserve Bank of New Zealand was unhappy that AMP’s New Zealand assets were not “ringfenced” for the benefit of New Zealand policyholders.
In order to progress the deal UK based Resolution Life have opened an Australian subsidiary called Resolution Life Australia.
The revised sale price for the AMP life insurance business is AUD $3 billion. This is $300 million lower than the original deal and comprises AUD $2.5 billion in cash and a $500 million or 20% equity interest in the new entity.
The transaction is now expected to completed in the first half of 2020, subject to all regulatory approvals being received. However Resolution Life will effectively be “on risk” from 1st July 2018.
Currently AMP Life is the fourth largest life insurance company in Australia. As per the original deal, Resolution Life intends to manage AMP existing in-force policies but will cease to issue new policies.
To see the ownership of other insurers currently operating in Australia go to Compare Life Insurance Companies.