AMP Limited has thrown the option of keeping its life insurance business open and operating in the face of significant regulatory hurdles, but Resolution Life has made clear it wants to continue trying to complete the transaction.
In a statement issued following AMP’s announcement to the Australian Securities Exchange (ASX) yesterday, Resolution reaffirmed its continued strategic interest.
“Resolution Life notes today’s update provided by AMP Limited on the sale of AMP’s Life insurance businesses to Resolution Life and the regulatory challenges to achieving the conditions precedent for the transaction within the agreed terms of the transaction,” the statement said.
“Resolution Life reaffirms its strategic interest in expanding its in-force specialist life insurance business to Australia and New Zealand. Resolution Life’s business is focussed on the careful, long-term management of existing policy-holders.”
“Resolution Life views the acquisition of AMP Life as an excellent opportunity,” it said.
“As such, the two parties are now engaged in discussions regarding a restructuring of the transaction (including updated terms) to accommodate the regulatory requirements whilst delivering a de‐risked transaction with execution certainty, which meets the needs of all stakeholders,” the statement said.
The statement came as key life insurance executives assessed the impact of AMP resuming a business as normal approach to its life insurance business in circumstances where it still accounts for $1.72 billion in in-force risk annum premium representing 11 per cent of the market.
The managing director of specialist life/risk research house, Dexx&r, Mark Kachor said he believed the impact of such a move would be significant not just because of the competitive dynamic of the sector but because of the pragmatic pricing decisions it was likely AMP would have to take.