We were right to sell AMP Life says Murray

AMP Limited’s financial results and the actions of other owners of life insurance businesses have validated the company’s decision to sell its life insurance business to Resolution Life, according to AMP chairman, David Murray.

Murray used his address to the AMP Limited annual general meeting to defend the much-criticised sale decision stating that since the sale agreement in October “our financial results have reinforced that AMP is no the best owner of a life insurance business with higher capital requirements and earnings volatility”.

“Indeed, the recent sale of many major life insurance groups in Australia are also attributable to these factors,” Murray said.

“There has been some criticism of the transaction with Resolution Life,” he said. “As a Board we respect differing viewpoints, but we are bound to act in the best interests of the company and all shareholders, rather than satisfy the particular agenda of a view.”

“Life insurance is a very long-term business. Given we were faced with deteriorating prospects, a sale was the best option when considering the interests of the company over the long-term,” Murray said.

Elsewhere in his AGM address, Murray foreshadowed that AMP chief executive, Francesco De Ferrari would outline his position on the future of AMP at around the time of the company’s interim financial results in August.

“We expect by then to have a line of sight on completion of the sale transaction and clarity of relevant legislation post the federal election,” he said.

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The sale to Resolution life should never been allowed by the regulator . It is common knowledge that with closed products (don’t take new clients) the healthy lives leave whereas unhealthy lives are forced to remain on the products. This causes the book to price 'rot'. With the sale of AMP insurance to Resolution Life, millions of Australian consumers are going to find themselves locked into expensive insurance policies as healthy lives leave AMP as clients. A disaster in the making as this will become the largest legacy book in Australian history.

Resolution life has no interest in being a contributor to the industry its sole modus operandi is to reduce cost and take profits and this is done by removing product development and new business cost. How can this possibly be in the interests of the public

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