ENPNewswire-May 11, 2020--AMP AGM 2020 Chairman's address
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Release date- 08052020 - This is not the first time AMP's shareholder meeting has occurred in exceptional circumstances.
Just over 100 years ago, during the Spanish flu pandemic, the AGM was held in tents on the roof of our then Pitt Street offices.
This is a reminder of AMP's long and proud history in Australia, and that crises, however confronting, do pass.
At AMP, we have moved quickly to take action in response to COVID-19 - launching a relief package for clients, mobilising employees to work from home and ensuring frontline teams are ready to respond.
At last year's meeting, the Board was encouraged by the strong support shown for the election of Directors and the remuneration report.
Since that time, the Board has had to take critical decisions to position AMP for the future - renegotiating the sale of AMP Life, launching our three-year transformational strategy, undertaking a capital raising and continuing to address legacy issues.
But we are also acutely aware that the fall in our share price and our decision not to declare a dividend in 2019 will have been very disappointing for shareholders.
Today, I will outline the progress made against key priorities last year and our focus for 2020, including how we're responding to COVID-19 in the best interests of the company, shareholders, clients and employees.
Progress in 2019
Sale to Resolution Life
I'd like to start with the sale of AMP Life to Resolution Life which will be a key step in our transformational strategy.
In August last year, we reached a revised agreement with Resolution Life, following challenges in obtaining regulatory approvals for the original agreement.
Before reaching this decision, the Board assessed the revised agreement against a range of options as we communicated at the time.
The Board recognises that the sale of AMP Life marks a strategic shift for our company. Whilst life insurance played an important role in our history, our business' future and growth lies in wealth management, banking and investment management. We strongly believe the sale of AMP Life delivers the best outcomes for shareholders, policyholders and the business.
The task of unwinding 170 years of processes, systems and complexity associated with the sale of AMP Life should not be underestimated. Recent and continuing sales of major life insurance groups in Australia only reinforce the challenge and time required for such an undertaking.
The pandemic has created added complexity, but our work program continues unabated.
We have sent over 1.1 million communications to superannuation members, employers and advisers, with further communications to follow.
The transfer of superannuation funds from the life company back to AMP as part of the sale will be one of the largest in Australian history. To date, the business has executed seven 'dry runs' to confirm our capability to deliver the transfer- the most recent run successfully with our team working remotely given COVID-19 restrictions.
The regulatory approvals and conditions precedent required span Australia, China and New Zealand. Earlier this year, approval from the China Banking and Insurance Regulatory Commission was confirmed. In recent weeks, we have received approval from APRA to facilitate the transfer of MySuper accounts - one of the key consents required in Australia. And in New Zealand, engagement with the Reserve Bank of New Zealand continues.
We are satisfied with the progress being made, and again reiterate that we remain on track to complete the transaction by 30 June 2020.
At last year's meeting, I provided an assurance that we would face squarely into legacy issues in 2019.
I'm pleased to report that we've made significant headway, including on client remediation.
In 2019, the remediation program accelerated as we said it would. In the second half of the year, we paid $190 million, from funds already earmarked. And major policies for our remediation program have been agreed with ASIC, the corporate regulator.
Due to rigorous management of the project, overall remediation costs remain broadly in line with the original estimate.
Following a significant ramp up in activity, we expect the program to be 80 per cent complete by the end of this year and remain on track for completion in 2021.
This is testament to our commitment to doing the right thing for clients and addressing issues of the past, and improving our risk management systems, to enable us to focus on the future.
Explaining 2019 financial performance
Turning to our financial performance.
To provide context, last year's performance reflects the challenges faced as we transitioned and fundamentally reset the...