News reports out of Japan have suggested that the challenges faced by MLC Insurance will prompt its major shareholder, Nippon Life, to make a third further injection of capital before the end of this year.
The reports, published by Nikkei, said Nippon was considering the move as the Australian business, still part-owned by National Australia Bank, continued to struggle to deal with the state of the income protection market in Australia as well as the pressures imposed by the COVID-19 pandemic.
The Japanese report noted that after its acquisition of MLC in 2016, Nippon Life had posted an impairment loss and had injected capital of about 20 billion yen ($260 million) in June this year and suggested that the Japanese insurer was “considering a third additional investment by the end of this year to support its cashflow”.
“Nippon has also put together a plan to raise the premiums of income protection insurance, which continues to be loss making, for the fiscal year ending March 2020. MLC seeks to return to making profit from a 10.8 billion yen loss. The company will also aim to reduce expenses by more than 20%,” the report said.
It said Nippon had clearly stated that “it will be strongly involved in the restructuring of MLC, which is the core of its overseas business”, noting that a new department was established to manage MLC's operations, and a number of executives were dispatched to Australia. The department will focus on rebuilding corporate governance.
Comments
Hopefully, they don't cut costs on their technology and customer service. Both are horrendous.
as bad as I've seen, it's like they've all abandoned ship. I think this will end with Nippon suing NAB for false statements when it sold MLC to them. They certainly aren't making any money from it.
I'm guessing the Japanese underestimated the "mental health pandemic" that lobbyists have created in Australia.
Worst new technology platform in history and appalling customer service. MLC have become a dogs breakfast.
Seems like MLC's crappy adviser service and BDM support is finally catching up with them. Pitty the Japanese are paying for it.
If a company cant even give a timeframe for completion of new business, it will surely slowly die. If the japanese owners knew advisers were not writing business due to crap service heads would roll so to speak. It seems the staff are either over worked or over it. Either way major change is needed or else they wont have our support.
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