âThe 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,” AMP’s acting chief executive Mike Wilkins said.
âDelivering the right outcome for customers, shareholders and employees has been our focus throughout the portfolio review.”
The sale comes after a turbulent year for AMP, which has suffered a collapseÂ in its share price and lost its former chair Catherine Brenner and several board members after the royal commission Net produced shock revelations of misconduct.
Life insurance in Australia has suffered from poor performance in recent years, prompting all of the major banks except Westpac to sell their life insurance businesses. It had been speculated AMP may join the exodus.
AMP warned its latest quarter had been challenging, with an increase in the rate of cash outflow from its Australian wealth management arm, in part due to its appearance at the royal commission into financial misconduct.
It said net cash outflows from its AustralianÂ wealth management business were $1.5 billion, up from $243 million a year earlier – with inflows remaining weak and outflows remaining “elevated.”
AMP Capital had net external inflows of $521 million, helped by strong investment in infrastructure assets in the United States and Europe.Â Its life insurance arm, which AMP is selling, had “negative’ claims experience in the quarter, while new business was “subdued.”
In its banking division, the value of its $20 billion loan book stayed essentially unchanged as credit growth slowed down.
âIt was a testing quarter, particularly in Australian wealth management and Australian wealth protection, although AMP Capital and AMP Bank again demonstrated ongoing resilience,” Mr Wilkins said.
The move to exit life insurance comes after a new CEO was appointed by chairman David Murray in August, with a brief to transform the business and deal with its cultural problems.
âLooking forward, our incoming CEO, Francesco De Ferrari has the mandate to transform AMP. The outcomes from the portfolio review will create greater flexibility as he sets the new strategy for our simplified business portfolio,â Mr Wilkins said.
More to come.
Clancy Yeates writes on business specialising in financial services. Clancy is based in our Sydney newsroom.
Our weekly podcast giving you insight into the stories that drive the nation.