AMP sell part of AMP Capital Private, and more daily news

It has been announced that 60% of the AMP Capital private markets investment business will be purchased by Ares Management. It was previously reported the non-binding sale was off the table. The new sale proposal is a more limited joint-venture that will allow Ares to acquire the majority stake in the AMP Capital infrastructure debt, real estate and other minority interests. This is stake is valued at A$2.25 billion. AMP will own AMP Capital’s public markets businesses, with the Multi-Asset Group transferred to AMP Australia.

“Ares Management will buy 60 per cent of the AMP Capital private markets investment business in a proposed deal announced this morning.

After ditching efforts to by all of the ASX-listed AMP in February, the US investment firm has instead opted for a more limited joint-venture arrangement to be explored over the next 30 days in a just-inked non-binding heads of agreement.

Under the deal Ares would acquire the majority stake in the AMP Capital infrastructure debt, real estate and other “minority interests” valued at A$2.25 billion, according to a release issued this morning.

“AMP will retain ownership of AMP Capital’s public markets businesses, which in FY 20 made a modest NPAT contribution,” the statement says. “The public markets strategy will continue, including the Multi-Asset Group (“MAG”) being transformed and transferred to AMP Australia, and actively exploring sale or partnership opportunities for the Global Equities and Fixed Income (“GEFI”) business.” Click here to read more 

In other news

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AMP sale proposal falls through, and more daily news

AMP has revealed that the non-binding sale proposal made by Ares Management in October 2020 will not proceed. AMP has highlighted that it will continue to engage with Ares Management in regards to AMP Capital’s portfolio review. The AMP Board has confirmed that a transformation strategy for AMP Australia and AMP NZ wealth management is likely to be the best option for shareholders.

“In a portfolio review of FY20, AMP have revealed that Ares Management have withdrawn their non-binding indicative proposal to buy out AMP.

The report stated that, “Following detailed discussions, AMP has been advised last night by Ares that it does not intend to proceed with its non-binding indicative proposal for 100% of AMP [at] $1.85 per share.”

While acquisition of AMP is off the table, the report states that, “AMP continues to engage constructively with Ares in relation to AMP Capital as part of the portfolio review.”

While the U-turn from global asset management giant, Ares, may come as a surprise to some, AMP’s broader position is one of positivity according to the report.

“The review has confirmed AMP’s transformation strategy for the AMP Australia (Australian wealth management and AMP Bank) and New Zealand wealth management businesses is likely to be the optimal outcome for shareholders. The AMP Board has therefore concluded the review of these assets.”” Click here to read more

In other news

Partners Life: Module 6 of Adviser Support Programme, titled final checks, is set to be released March 2021

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Cigna: Cigna December COVID-19 global impact study


Updated Quality Product Research Database v140

Institutional subscribers have just been sent the latest database from Quality Product Research Limited, v140. This version includes the following changes:

* AIA Living enhancements effective 01/12/2020 - no rating changes applied

* AMP Lifetrack enhancements effective 21/09/2020 - rating changes applied

* AMP RPP enhancements effective 21/09/2020 - rating changes applied

* Review of - TPD item in MP/IP


AIA enhance AIA Vitality, and more daily news

AIA has announced the addition of a new benefit to AIA Vitality. Customers will have the chance to earn an Apple Watch when weekly physical targets are reached. This change is intended to motivate customers to increase physical activity. To have the chance to earn the Apple watch customers will need to enter into an interest-free loan agreement to ensure upfront costs are covered. Once customers enter to agreement, AIA contributes to monthly repayments, if physical targets are met, customers will not be required to pay anything. Len Elikhis, chief product and vitality officer, has said that this new addition to AIA Vitality will offers significant value to customers.

“AIA recently launched a new benefit for its AIA Vitality customers, and is giving them the chance to earn an Apple Watch for reaching weekly physical targets – an initiative it says will be a strong motivator for customers to increase their physical activity.

 

To earn their Apple Watch, customers must enter into an interest-free loan agreement to cover the upfront cost. AIA then contributes to the monthly repayments, and if all physical targets are reached, the customer ends up paying $0.

 

Len Elikhis, chief product and vitality officer says the initiative offers “significant value” to the AIA Vitality membership base, which has been growing steadily since its launch.”

 

Elikhis noted that the new initiative is intended to make the Apple Watch Series 6 more accessible as well as encouraging members to achieve goals. 

“The Apple Watch Benefit is another example of the significant value AIA Vitality is providing for our members,” he concluded.

 

“The aim of the benefit is to make it easier for members to access Apple Watch Series 6 to further encourage our members to achieve their physical activity goals.” Click here to read more 

In other news

AMP: AMP Capital insider flies into top job

NZFSG: NZFSG Makes New Appointment


Fidelity Life discuss up front commission changes, and more daily news

Fidelity Life chairman Brian Blake noted that the Government missed an opportunity to reduce life insurance policy commissions through CoFI. In a market that is highly competitive, Blake says that a voluntary reduction in upfront commission is unlikely, although Blake said that Fidelity Life is confident that it has adopted changes that meet guidelines. Fidelity Life is set to launch an online adviser product accreditation programme and an adviser quality assurance programme. Similarly, it has developed good customer outcomes principles to ensure compliance.

“Fidelity Life chairman Brian Blake says the government has missed an opportunity to force down commissions on life insurance policies.

Blake says: "The failure to address high upfront commissions in the Financial Markets (Conduct of Institutions) Amendment Bill was a missed opportunity in our view.

"In a highly competitive market like ours, without regulatory intervention it’s unlikely anyone will significantly reduce upfront commission levels and risk losing market share," he says in the company's annual report

He says Fidelity Life is confident it has adopted conduct and culture changes which meet the requirements of the Financial Markets Authority/Reserve Bank of New Zealand conduct and culture review.

The company will shortly be introducing an online adviser product accreditation programme, an adviser quality assurance programme and it has also developed good customer outcomes principles to help ensure Fidelity continues to meet the needs of its customers.

Further enhancements to its adviser proposition will be announced from early 2021, including some digital initiatives resulting from its Project Watson IT development.”

Although total comprehensive income and commission payments decreased, Fidelity Life experienced premium revenue increased. Fidelity Life has noted that it is looking to comply with RBNZ’s guidelines on prioritising capital protection. To comply, Fidelity Life would not be paying dividends this year.

“In the year to June 30, total comprehensive income fell from $20.7 million to $17.9 million. However, profit rose from $11.6 million to $17.0 million.

Insurance premium revenue increased from $275.47 million to $269.49 million and claims paid out rose from $125.7 million to $139.7 million.

However, commission payments fell from $57.37 million to $53.42 million.

The company’s earnings per share increased just over 10% from $8.73 to $9.62.

Fidelity says because the Reserve Bank has clearly advised all insurers that protecting capital should take priority over paying dividends, no dividend would be paid this year.

The Reserve Bank "expects insurers to take steps to protect, if not build, their capital positions to ensure the industry remains in a strong position to support New Zealanders through Covid-19 and this time of economic uncertainty."” Click here to read more

In other news:

FSC: Generations Digital Conference now available on demand

Southern Cross: Southern Cross have moved from Level 1 EY Building to Level 1 Te Kupenga, 155 Fanshawe Street

AMP: AMP receive buyout offer from US investment company

FMA: Consultation: Recognition of Australian adviser qualifications

Southern Cross: Hip replacements add to health insurer's bill


Legal and regulatory update for the life and health sector

28 Oct 2020 – Financial Services Council media release at the time of the AGM advised of a solid year of member growth and increased revenues. https://www.fsc.org.nz/site/fsc1/Media%20Releases/Financial%20Services%20Council%20-%20Annual%20General%20Meeting%20-%20Media%20Release.pdf

30 Oct 2020 – RBNZ signed the ‘IBOR (Inter-bank offer rates) Fallbacks Protocol’ published by the International Swaps and Derivatives Association (ISDA). https://www.rbnz.govt.nz/news/2020/10/rbnz-signs-isdas-ibor-fallbacks-protocol

30 Oct 2020 - The Commerce Commission published a statement of preliminary issues relating to an application from Aon plc seeking clearance to acquire Willis Towers Watson Public Limited Company as part of a global transaction. https://comcom.govt.nz/case-register/case-register-entries/aon-plc-and-willis-towers-watson-public-limited-company

30 Oct 2020 – AMP announced the receipt of an indicative, non-binding, conditional proposal from Ares Management Corporation, a US-based company, to acquire 100 per cent of the shares in AMP Limited by way of scheme of arrangement. http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/AMP/362281/333930.pdf


 Aon look to acquire Willis Towers Watson, and more daily news

After announcing its acquisition plans in March 2020,  Aon has submitted an application to the Commerce Commission to acquire Willis Towers Watson. Aon is looking to incorporate the five Willis Towers Watson offices across the country into wholly owned subsidiaries.

“New Zealand’s Commerce Commission has received Aon’s clearance application to acquire the entirety of Willis Towers Watson, as part of a global transaction.

The step was revealed by a statement from the commission, which is New Zealand’s competition, consumer and regulatory agency.

In New Zealand, Aon and Willis Towers Watson both offer a range of insurance brokerage services, including for commercial insurance, reinsurance, group health and welfare benefits, and personal and life insurance. Both firms also provide investment consulting services to institutional investors.

Aon has 58 offices across New Zealand, while Willis Towers Watson has five – Auckland, Wellington, Christchurch, Tauranga, and Dunedin.

Under the proposed transaction, Willis Towers Watson will become a wholly owned subsidiary to Aon. According to the Commerce Commission, it gives clearance to a merger application if it is able to successfully prove that that the deal is unlikely to have the effect of substantially lessening competition in a market.” Click here to read more

In other news

AMP KiwiSaver scheme to go passive, and slash fees

Strategi: The new Privacy Act 2020 2pm webinar

RBNZ: Reserve Bank seeks to preserve benefits of cash


Southern Cross offering domestic travel insurance, and more daily news

Southern Cross Travel Insurance has announced that it will be offering customers domestic travel insurance product.

Customers will be offered:

  • Cover for cancellation of your flight and accommodation if you can no longer travel
  • Cover for accommodation and other expenses if your flight is delayed or cancelled
  • Cover for your luggage and other personal belongings if they’re stolen or damaged
  • Cover for excess charges if you have an accident in your rental vehicle
  • Cover for the kids if you’re delayed getting home and need to pay for extra childcare costs
  • Cover for your furry friends at the kennels if you’re delayed getting home

Click here to read more

In other news

Kiwis with advisers end up significantly better off - research

AMP Australia: AMP advisers call for government inquiry over alleged fraud, deception


Financial Advice conference recipient of Government funding, and more daily news

It was announced that MBIE’s $10 million Domestic Events Fund was set up to support events. Financial Advice NZ has been named as one of the 200 recipients.  The funding was granted to Financial Advice NZ for their 2020 Bounce conference.

“The $10 million Government fund was set up to support the events industry despite the disruption of Covid-19.

Financial Advice NZ received funding for its conference this year, which is set up as a series of roadshow events across the country. The events can be attended online or in-person. The association will decide this weekend whether to go ahead with an in-person Auckland event.”

Katrina Shanks has said that the funding is fantastic and would allow them to have certainty.

“Financial Advice NZ chief executive Katrina Shanks said the funding would allow the association to have some certainty as it worked with the events company delivering its conference this year.

“It’s fantastic for them. It’s yet another industry that’s had a huge hit from Covid.” Click here to read more

In other news:

AMP: AMP announced that it is considering selling all, or some, of its assets, various stories, but this one in the AFR is recent

Partners Life: Expressions of interest is now open for the September 2020 New Adviser Training Course

RBNZ: Same objectives, different challenges