25 Oct 2018

AMP sells off majority of NZ operations after scandals

4:03 pm on 25 October 2018

AMP is selling most of its New Zealand operations as it revamps its business to free up capital for rebuilding after a year of scandal.

AMP is an Australian financial services company. This is its office in Melbourne.

Australian financial services company AMP is selling its Australian and New Zealand life insurance businesses. Photo: 123rf

The Australian financial services company is going to sell its Australian and New Zealand life insurance businesses to British-based Resolution Life, which has well known brands such as AXA, Royal and Sun Alliance, and BUPA.

"The completion of our portfolio review marks a major step forward in reshaping AMP as a simpler, more focused group, that is well positioned to compete in our core markets," acting chief executive Mike Wilkins said.

The review followed AMP's admission to the Australian banking royal commission that it charged customers for services they did not receive and then lied about it to regulators.

The scandal cost AMP's chairman, chief executive and chief legal officer their jobs, prompted legal action from shareholders, and is likely to cost the group hundreds of millions of dollars in compensation.

AMP said it would also carve off its New Zealand wealth management and financial advice operation in the second half of next year in a public share float.

The managing director of the New Zealand business, Blair Vernon, said it was prepared for change and it would be business as usual.

"AMP New Zealand is a highly efficient, well-run business which has been a consistent contributor to AMP."

The local business had operating earnings of about $A40 million last year.

"Importantly, policyholders will retain all terms and conditions of existing policies, so there's nothing they need to do. There are no changes for AMP New Zealand's wealth management or general insurance clients, including members of the AMP KiwiSaver Scheme," Mr Vernon said.

AMP expects to raise at least $A3.45 billion ($NZ3.75b) from the divestments.

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