It'll be different this time; Asteron boss on Resolution deal
Asteron Life executive general manager Grant Willis is confident Resolution Life has learnt lessons from its purchase of AMP Life and won't repeat them again.
Thursday, April 11th 2024, 6:00AM 
6 Comments
Willis says Resolution's proposed deal to acquire Asteron Life is very different to its first foray into New Zealand when it bought AMP Life and put the business into run off.
Many advisers expressed their frustration about dealing with Resolution/AMP Life, particularly around communications and service levels.
Willis says the proposed Asteron deal is quite different. Resolution will be supporting Asteron's growth ambitions, is keeping the current management team (including Willis) and is not rebranding the business.
Resolution has acknowledged things didn't go that well with AMP, he says.
Willis also points out Resolution Life Australasia itself has changed with a relatively new Australasian boss, Tim Tez, who has been in the role less than 18 months.
Tez and Willis have been out talking to staff and advisers about the deal. Willis says reaction has been mixed.
Around 70% of advisers have said there will be no change; with around 20% adopting a ‘wait and see’ approach and the remainder don't think it is a great outcome. However, some of these advisers are now starting to see a new owner could be good for Asteron Life.
Willis says it should be no surprise Suncorp has agreed to sell Asteron Life in New Zealand, the surprise, he says, is the acquirer.
There's no suggestion it (the deal) is going to change the direction of Asteron
From a Suncorp perspective business units are often subject to strategic review. More importantly the company had already sold its Australian life business and its bank and was simplifying its business concentrating on general insurance.
There were multiple potential suitors for Asteron Life, but Resolution prevailed.
His message is there will be no change; other than accelerated growth.
"There's no suggestion it (the deal) is going to change the direction of Asteron," he says.
Willis says it is a good outcome for Asteron it can now invest for growth including around digitising it business and its brand. With Suncorp as an owner Asteron was not necessarily always top of the list for new investment, but that changes with Resolution.
Even without the investment the company wanted it had been growing successfully organically, while other life companies in New Zealand had sought growth through acquisition (most noticeably buying bank operations).
Willis says Resolution acknowledges the AMP Life sale had difficulties for advisers.
"This is quite different to AMP," Willis says. They are buying the Asteron shares and essentially buying a licensed entity that is on a successful growth trajectory.
The deal is still subject to regulatory approval and is expected to take about nine months to complete including the regulatory requirements.
Once it's done Resolution will be the second largest life insurer by annual premium income in New Zealand.
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Comments from our readers
Yet they continue to give diabolical service with no genuine attempt to improve. This arrogance and contempt makes me feel the promises they are currently making will not live up to expectations.
How about fixing the AMP mess before another acquisition???
I think this will take a few years to play out. A year for Res Life to complete the deal and get their feet under the table. Then they will prob keep Asteron open for 2 years to give it a go.
Given the Res track record of ruthlessly cutting costs (service is a cost) and lack of experience of writing new business it would be a hard ask to make this work but hope they can.
Asteron has been around for donkeys years looking back at the old Amev, Royal, Sun Alliance, Aa Life Royal Life and others yet it only sold for $250m up front and the rest later prob after hurdles are met.
The Japanese paid $1billion for Partners and all the constituent parts that became Asteron would have been worth a lot of coin.
1. Res Life have realised managing a term life book without new business, distribution and product design isn’t a good place to be. Buying Asterom adds this to the mix and creates a larger more valuable operation to go forward with.
2. The strategy is to merge things in time and then sell out as a complete operation retaining the value invested, or more, exiting their term life position as not being their business.
That second one may be their approach in NZ, being that selling down the closed book isn't going to return anything close to what they invested and they want to divest their current position as a result.
Either way, the combined position with Asteron Life becomes a better company for an overseas investor to pick up. There are plenty of large life insurers globally that see NZ an attractive place to do business.
When I heard the news initially, I let out a groan which caused others in the office to ask what was wrong.
Asteron Life executive general manager Grant Willis, is quoted as saying - ”Around 70% of advisers have said there will be no change”…… What an absolutely bizarre comment for him to make. The advisers will have zero decision making or input in that regard ………….
Can anyone name one insurance company acquisition where a couple of years down the track, things haven’t changed A LOT, and usually not for the better?
We have some legacy AMP policies. I have had the unfortunate experience needing to deal with Resolution Life around a couple of these. It was……… let’s say….. challenging….. to get the info I wanted, and to deal with them generally.
The immediate outcome of this sale is an S&P financial strength rating downgrade for Asteron. I think that speaks volumes.
Good luck Asteron, and the current staff there. I bet there are more changes coming than people imagine.
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