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Market update for the period ended 31 December 2020

Business update

AMP Life

AMP Life reported a statutory profit of A$234 million for the year ended 31 December 2020 and in March 2021 declared a dividend of A$71 million relating to 2H20. The business has remained resilient in 2H20 during the COVID pandemic, generating a statutory profit for the second half of A$98m.

In December 2020 AMP Life successfully issued A$300 million of Tier 2 subordinated notes and redeemed A$305 million of AT1 notes previously on issue.

At 31 December 2020 AMP Life’s capital base of A$2,598 million was A$1,502 million in excess of the Prescribed Capital Amount of A$1,096m which represents a Capital Adequacy Multiple of 237%.

During 2H20, following the completion of the sale of AMP Life to the Resolution Life Group, the Australasian platform, including AMP Life, has made significant progress on implementing its platform transformation program including:
 

  • Implementation of Enterprise Agility as a way of working across the platform
  • Implementation of pricing increases to AMP Life’s Australian retail Wealth Protection products
  • Establishment of the NZ Asset Trust as required by AMP Life’s NZ branch licence conditions
  • On plan progress of the separation of systems and processes from AMP

Resolution Life Group

On 4 January 2021 Resolution Life Group announced the completion of its acquisition of Voya Financial Inc.’s individual life in-force business in the USA. Voya transferred approximately 350 employees, together with the assets and systems used to manage the business. On completion more than US$25 billion of assets were added to the Resolution Life balance sheet and it assumes responsibility for the administration of the acquired business.

Resolution Life Group has equity capital of US$3.1billion and AUM of US$56.6 billion globally.

Resolution Life Group continues to actively seek out further acquisition opportunities both within Australia and New Zealand and globally.

Key metrics – AMP Life

  2H20 1H20 Change
Operating profit2 A$127m A$63m1 Up 102%
Investment earnings2 (A$29m) A$69m1 Large decrease
Statutory profit A$98m A$132m1 Down 26%
Net assets A$2,202m A$2,418m Down 9%
Capital base A$2,598m A$2,413m Up 8%
Prescribed Capital Amount A$1,096m A$1,018m Up 8%
Capital adequacy multiple 237% 237% Unchanged
Superannuation & Investments AUM2 A$24.5b A$25.2b Down 3%
Wealth Protection API2 A$1,733m A$1,725m Up <1%

 

Statutory profit reduced by A$34 million in 2H20 relative to 1H20. Lapse and claims experience was positive in 2H20, although lower than 1H20 which included a significant one-off positive in relation to lapses arising from the implementation of Putting Members Interests First legislation being better than expected. Capitalised losses recognised at 1H20 due to strengthening of assumptions predominately due to COVID were partially reversed in 2H20 due to the implementation of pricing changes in the Australian Retail Wealth Protection business. Investment earnings experience was negative due to the implied market valuation of inflation linked liabilities.

Credit ratings

AMP Life’s credit ratings are as follows:

  Rating Agency Rating Outlook Last review date
AMP Life Insurance Financial Strength Rating Moody’s A3 Negative 30 September 2020
AMP Life Issuer Credit Rating and Financial Strength Rating S&P A- Negative 27 August 2020
AMP Tier 2 Subordinated Notes Moody’s Baa2 (hyb)   8 December 2020

 

1Presented on an unaudited pro-forma basis to remove the impact of separation from AMP and profits for businesses transferred out of AMP Life prior to the sale of AMP Life to the Resolution Life Group.
2Unaudited
[1]

Audited Financial Report

AMP Life Limited’s audited financial report for the year ended 31 December 2020 has been finalised and will be made available at amplife.com.au and amplife.co.nz.

Contact details

For investor enquiries, please contact: 

Graham Duff
Treasurer & Deputy CFO, Resolution Life Australasia
+61 411 703 429
graham.duff@amplife.com.au

For any media enquiries, please contact:

Erica Borgelt
erica.borgelt@newgatecomms.com.au

or

Matthew Jackson
Matthew.Jackson@newgatecomms.com.au

Important information

AMP Life Limited ABN 84 079 300 379, AFSL No. 233671 (AMP Life), has proudly served customers in Australia since 1849. AMP Limited ABN 49 079 354 519 (AMP Limited) has sold AMP Life to the Resolution Life group whilst retaining a minority economic interest. AMP Limited has no day-to-day involvement in the management of AMP Life whose products and services are not affiliated with or guaranteed by AMP Limited. AMP Limited is not liable for products issued by AMP Life or any statements or representations made in the PDS for those products. “AMP”, “AMP Life” and any other AMP trademarks are used by AMP Life under licence from AMP Limited.

Any advice and information on this website is general in nature and is provided by AMP Life, which is part of the Resolution Life group. The advice does not take into account your personal objectives, financial situation or needs. Therefore, before acting on the advice, you should consider the appropriateness of the advice, having regard to those matters as well as the relevant product disclosure statement (PDS), available from AMP Life at amplife.com.au or by calling 133 731, before making a decision about the product. Consider speaking to a financial adviser if you have any concerns.

If you decide to purchase or vary a financial product, AMP Life and/or other companies within the Resolution Life group will receive fees and other benefits, which will be a dollar amount or a percentage of either the premium they pay or the value of their investments. You can ask us for more details.

AMP Life is part of the Resolution Life group and can be contacted on 133 731 or via the contact us page.