The intricate antecedents of MLC Life/Resolution Life merger

ANALYSIS

Insignia Financial chief executive, Scott Hartley will have been amongst those conscious of the implications of yesterday’s announcement that MLC Life will be merged with Resolution Life Australasia to create Acenda.

He will have been conscious of the transaction because it allows Insignia Financial to more freely use the valuable MLC brand in the retail market place without the risk of confusing consumers.

Hartley identified the value he sees in the MLC brand months ago and the rebrand resulting from the MLC Life and Resolution Life merger creates clear air.

From a life insurance point of view, the merger of MLC Life and Resolution Life changes the landscape in terms of scale and market share remembering that a substantial part of Resolution Life Australasia is the old AMP Life business which it largely exited in 2018.

It will take time for the merger to fully solidify but the scale of both businesses suggests that while TAL will likely retain its position atop the market share table, the newly created Acenda will likely unseat AIA Australia from its second placed position.

The merger transaction is scheduled to be completed in the second half of next year but MLC Life chair, Peter Gray said the MLC business will begin adopting the Acenda brand immediately while Resolution Life Australasia would transition to the Acenda brand once the transaction is completed.

His statement said that until completion the two businesses would continue to operate separately.

Announcing the merger, MLC Life said that the new entity would be serving around two million customers and partners noting that the combined customer base would “offer scale and stability”.

The merger announcement was surprising only because of the manner in which it was generated – via MLC Life’s Japanese parent, Nippon Life Insurance Company acquiring 100% of Resolution Life which has been best known for acquiring and managing portfolios of life insurance policies.

Nippon Life president, Hiroshi Shimizu said the deal aligned with the company’s intentions to continue to grow in the Australian life insurance industry.