AMP Limited will divest its 19.13% equity interest in Resolution Life Australasia (RLA) for $524 million, completing the firm’s exit from its former life insurance and mature business, AMP Life.
AMP Life was sold to Resolution Life in 2020 for $3 billion including the equity interest.
An AMP announcement said the divestment was agreed to ahead of the expiry of the 18-month standstill period agreed as part of the 2020 sale. The divestment was expected to complete during the first half of 2022, subject to regulatory approvals.
AMP chief executive, Alexis George said: “This divestment brings to a close our long and proud involvement in life insurance in Australia and New Zealand. It enables us to realise capital to further strengthen our balance sheet ahead of our demerger and continue supporting our businesses.
“The separation of our businesses is progressing well and will continue until mid-next year as planned. We will continue to provide transitional services to RLA, as agreed, and will have a shared customer and adviser connection into the future.”
AMP and Resolution Life had agreed to settle post-completion adjustments and certain claims between the parties, subject to various limitations and exclusions, which resulted in a net payment of $141 million to RLA from AMP. AMP partly provisioned for these items but following the acceleration of this settlement will record an additional one-off expense of approximately $65 million in FY21.
AMP noted the divestment would strengthen its available capital by around $459 million and this would provide flexibility ahead of its planned demerger of AMP Capital’s private markets business in the first half of 2022.