MLC Life Insurance has confirmed that Nippon Life and National Australia Bank will make a combined capital injection of A$650 million to MLC Limited, the entity operating the insurer.
The MLC announcement in late December followed a media announcement in Japan from Nippon Life.
Rodney Cook, Chief Executive Officer, MLC Life Insurance, says that the significant additional capital will set the business up for future success, beyond just provisioning for the impacts of Covid-19.
He says the announcement “…demonstrates the emphatic support of our shareholders and their backing of our strategic direction. It sets us up to survive and thrive in the coming post-pandemic environment”.
He adds that it provides real security of policyholder benefits, “…meaning we will continue to deliver on the promises we make to our customers and business partners”.
Cook says that as a member of the Nippon Life Group of Companies, MLC Life benefits from its long-term view. “This additional capital also supports our strategic goals.” These include:
- Playing a larger role in the group insurance market
- Developing the industry’s leading claims function
- Making it more efficient for advisers and superannuation funds to provide insurance to their customers through the use of technology
In the 12 months to 30 November 2020, MLC Life Insurance paid nearly $1.1 billion to customers and their families.
Nippon Life says it will work closely with MLC Life Insurance “…carefully monitor developments and continue to extend its support to the business”.
The statement adds that the additional capital is divided into two parts: an A$530 million ordinary equity issue to be contributed by Nippon Life and NAB (in line with their current ownership interest of 80 percent and 20 percent respectively) and Tier 2 capital notes of A$120 million to be subscribed to by Nippon Life.
Both transactions were expected to settle on 29 December, 2020.