Changes to our business – information for AMP customers

25 October 2018

AMP has announced changes to our business. As a valued customer we’d like to provide you with more information.

There’s nothing you need to do

It is important to understand that:

  • Terms and conditions of existing life insurance policies will be retained, so there’s nothing you need to do.
  • If you are a member of the AMP KiwiSaver Scheme or hold another AMP investment product, nothing changes.
  • If you have AMP general insurance, there are no changes.

As always, if you have any enquiries or would like to make changes to your policy, AMP KiwiSaver Scheme or investment, we’re ready to assist. If you need to make an insurance claim, we’re standing by to help. If you have lodged an insurance claim, or are currently receiving claim benefits, we will continue to provide you with our full support.

Business changes

AMP has entered into an agreement to sell its life insurance businesses in Australia and New Zealand to Resolution Life. Subject to regulatory approvals, the sale and change of ownership is expected to be completed in the second half of 2019.

AMP has also advised its intention to seek divestment of New Zealand wealth management and advice businesses via an IPO in 2019, subject to market conditions and regulatory approvals. This includes the AMP KiwiSaver Scheme, investment products and general insurance.

Thank you

We remain committed to providing the best outcomes for you. If you have any other questions, please contact your AMP Adviser or call us on 0800 267 762. 

Personal insurance

Terms and conditions of existing policies will be retained:

  • Life Insurance
  • Income Protection
  • Trauma Cover
  • Disability Cover
  • Other personal insurance products issued by AMP Life (including formerly National Mutual Life Association (NMLA))

General insurance

There are no changes:

  • Home and Contents Insurance
  • Content Insurance
  • Car Insurance
  • Rural Insurance
  • Other General Insurance

KiwiSaver

There are no changes (this includes AMP Essentials).

Investments

There are no changes:

  • AMP Investment Trust
  • WealthView
  • New Zealand Retirement Trust & My Super
  • Superannuation Master Trust
  • Personal Superannuation Scheme
  • Savings and Investments Portfolio
  • State Sector Retirement Savings Scheme
  • Personal Managed Funds and Future Lifestyle Plan
  • AMP Retail Superannuation
  • Other AMP investment products

Employer offerings

There are no changes:

  • KiwiSaver for employers
  • NZRT for employers

 

Terms and conditions of existing policies will be retained:

  • Business Risk Protection Plan
  • Businesstrack
  • Other business insurance products issued by AMP Life (including formerly National Mutual Life Association (NMLA))  

1.     What is wealth protection, mature and wealth management?

Wealth protection includes AMP’s life insurance products, such as Lifetrack and RPP. Mature (or conventional) products include some of our older products – insurance products (some with an investment component) – which have been closed to new business for some time. Wealth management includes AMP’s investment products, such as NZRT and our AMP KiwiSaver Scheme.

2.     What is an IPO?

This is also known as a stock market launch, ‘floating’ or ‘going public’, and it’s when shares of a company are listed on a stock exchange and sold to investors.

Details of the proposed offering are disclosed to potential purchasers in the form of a document known as a product disclosure statement. Most companies undertake an IPO with the assistance of an investment banking firm, including help with correctly assessing the value of shares (share price) and establishing a public market for shares (initial sale).

3.     Who is Resolution Life?

Resolution Life is an international insurance and reinsurance group whose management has a 15-year track record in providing quality service to in-force insurance customers. Click here for more information on Resolution Life.

4.     What is Resolution Life’s track record when it comes to paying insurance claims?

In 2017, AMP New Zealand customers received more than $225 million in claims and we have a strong record of paying all rightful claims. Resolution Life also has a long track record of providing high quality customer experiences and support.

5.     Are my funds safe? Is there enough money to pay my insurance policy if I need to make a claim?

We’re ready to help if you need to make a claim and your investments, including the AMP KiwiSaver Scheme, are not affected.

Life insurance policies in New Zealand (including your insurance policy) are overseen by the Reserve Bank of New Zealand, which requires funds to be set aside to make sure there is always enough to pay any claims.

Funds invested in AMP New Zealand superannuation and managed investment products are held on behalf of investors by an independent Supervisor licensed and overseen by the Financial Markets Authority, and that Supervisor provides oversight of the Manager who must act in the best interests of members.

Providing valued and high-quality advice and looking after your financial wellbeing is at the heart of what we do, and that’s what we continue to be focused on every day.

6.     Is AMP still financially strong?

AMP continues to be a financially strong organisation. Our customers are well protected – the movement in our share price does not impact any of the products or investments you hold with AMP.

AMP’s share-price fell heavily on Thursday 25 October, along with the rest of the share-market.

This decline has no direct impact on any of AMP’s products, services or capital strength.

AMP is financially strong and profitable

The transaction we announced on Thursday improves AMP’s capital strength by reducing the volatility of our earnings, strengthening the balance sheet and providing an ongoing income stream through the economic interest in the future earnings of mature and an interest in Resolution Life. 

AMP’s customers are well protected

Life insurance policies in New Zealand (including your AMP insurance policy) are overseen by the Reserve Bank of New Zealand, which requires funds to be set aside to make sure there is always enough to pay any claims.

Funds invested in AMP New Zealand superannuation and managed investment products are held on behalf of investors by an independent Supervisor licensed and overseen by the Financial Markets Authority, and that Supervisor provides oversight of the Manager who must act in the best interests of members. Those funds are completely separate to shareholders’ funds.

AMP holds significant amounts of surplus capital to allow us to manage the company well through all kinds of business conditions. We currently have surplus capital of $1.8 billion above the minimum we’re required to hold. So we remain a strong business.

7.     What’s the impact of the announcement on the 2018 dividend?

As a result of the actions announced by AMP, our insurance, mature and New Zealand businesses will be reported as ‘discontinued operations’ from the full year 2018 results.

The Board will exclude the earnings from these businesses in determining the final dividend for 2018. However, we will continue to target a dividend towards the lower end of our target payout range of 70 – 90 per cent of underlying earnings for the year.

8.     Is this happening because of the Royal Commission?

No. The review of our business commenced prior to the commencement of the Australian Royal Commission.

It is also important to understand that AMP in New Zealand operates differently to AMP in Australia and that much of the complexity that has given rise to some of the issues being investigated by the Australian Royal Commission do not exist in New Zealand. For example, we operate within a different regulatory and governance framework and have an open transparent relationship with New Zealand regulators (Reserve Bank of New Zealand and Financial Markets Authority).

We are deeply committed to ensuring good conduct and our primary responsibility is to maintain the integrity of our business and operations in the interests of our customers and the community more broadly.

9.     Do I still have an AMP Adviser?

Yes, and your Adviser is ready to help if you have any questions or would like to discuss your products or services.

Important information

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The information included in this article is of a general nature and is not a substitute for financial or other professional advice. To the extent that the information constitutes advice, it is class advice only. Before taking any action, you should always seek financial advice or other professional advice relevant to your personal circumstances. For personal financial advice, we recommend you contact your adviser or if you don't have an adviser, contact us on 0800 267 263 and we can put you in touch with one. 

A disclosure statement is available from your adviser, on request and free of charge.