moneyblog

Australia: "life insurance industry under siege"

Chanticleer, at the AFR, (in this post, but you'll need a subscription) suggest that this is the case, using AMP's experience as the base, and generalising from that. I disagree. AMP's situation is fundamentally that of a wealth company sharpening its focus on that business, exiting the life sector. Meanwhile, some specialist insurance companies appear to be having a great time. It is true that for others it is more mixed, but the digital revolution is well underway, as is the shift towards living benefits. Riding those trends is probably the key to a successful future - for clients, advisers, and insurers.

Criticism of RBNZ decision on AMP by the AFR

Goodreturns piece on criticism of the RBNZ's decision not to extend AMP's exemption to Resolution Life contain some interesting quotes, some of which are hard to swallow. 

The Australian Financial Review had accused RBNZ of making “a change in a 150-year-old regulatory practice for life insurance companies in New Zealand through an out-of-the-blue ASX announcement.”

The RBNZ contends that no law or regulation has changed, rather, what has changed is the nature of the business, which will be in run off. Again quoting from the story: 

The bank [meaning the RBNZ] says exemptions like AMP’s “are granted on the basis that standards applicable to Australian incorporated insurers are broadly equivalent to New Zealand standards. In some circumstances, standards for Australian incorporated insurers favour Australian policyholders over New Zealand policyholders, including during ‘run-off,’” it says.

If you want to read the original AFR article (probably limited to subscribers, but I can't tell, as I am a subscriber) the link is here. 

 

 

Australia: optimism for AMP

Chanticleer at the Australian Financial Review has this piece (probably only available to subscribers) that talks up the prospects for AMP - in this case meaning, the AMP that will remain in Australia, and out of the insurance business. It is easy to find negative articles about AMP, (because of conduct problems, and the controversial sale of the wealth protection business) so this provides a welcome change. Chanticleer advances two reasons to be optimistic: the first is straightforward, reckoning that AMP is undervalued, and with the return of capital planned from the sales, plus a projected dividend rate of over 11%, the business is good value. The other is the approach of the new CEO, Francesco De Ferrari, who asked staff to be 'optimistic and agile'. 

Please note, none of the above is financial advice, I am merely reporting the view of a journalist at the AFR.