August 10, 2017
AMP has extended its reinsurance arrangements with Munich Reinsurance and signed a separate deal with General Reinsurance Life Australia to collectively reinsure 65% of AMP Life’s retail life insurance portfolio.
The move will also free up a further $500 million in capital from AMP Life, adding to the $500 million already released under a previous reinsurance arrangement announced in October 2016 (see: AMP Signs Deal with Munich Re to Avoid Further Insurance Losses).
AMP announced the arrangements as it released its half yearly results and stated the new reinsurance agreements would include an extension to the current arrangement with Munich Reinsurance to cover 60%, up from 50%, of the AMP Life retail portfolio.
A new quota share agreement with General Reinsurance will cover 60% of the NMLA retail portfolio which merged with AMP Life on 1 January 2017, and both arrangements will commence on 1 November 2017.
AMP stated the current tranche of arrangements, which combined with the first tranche from 2016 “…effectively means 65 per cent of AMP’s retail life insurance portfolio will be reinsured for claims incurred from 1 November 2017”.