Five years after AMP doubled down on the local life insurance industry through its purchase of the Australian arm of AXA Asia Pacific - a deal that failed to meet expectations - the wealth giant may be preparing to roll the big acquisition dice again.
AMP's chief Craig Meller, who's been under pressure of late as losses in AMP's life insurance business have escalated, is understood to have assembled an internal team to cast the ruler over ANZ Banking Group's wealth operations in Australia.
ANZ said earlier this month it wanted to become merely a distributor of wealth products through its bank network, rather than a manufacturer of them. It is hoping to fetch about $4.5 billion from the sale.
Long standing adviser UBS is said be on hand to help AMP to examine the assets in what is expected to be a complex transaction that could play out over 12 months. A formal ANZ sales process, run by Goldman Sachs, is set to kick off in 2017, according to sources.
An AMP spokeswoman declined to comment.
Of course, AMP's recent headaches – including $1.3 billion of writedowns and losses announced in late October following a spike in claims and lapsed polices – has put many shareholders offside.
This may make it tough to run hard at ANZ's wealth unit, given the potential for even more institutional feathers to be ruffled if AMP were to write such a big cheque.
If it does have a crack, AMP will line up against other parties which are preparing to run the numbers including listed pan-Asian life insurer AIA Group, which has a close relationship with Deutsche Bank.
Other potential buyers include Japanese companies: Dai-Ichi Life, which owns TAL, the largest life insurer in Australia; MS&AD; Insurance Group; and Meiji Yasuda Life. Zurich which this year snapped up Macquarie Life and US player MetLife are also likely to take a look.
Meller, who has been a director of AMP's life insurance business since 2007 and was elevated to run the group in January 2014, is thought to have held aspirations to scale up for some time. AMP is said to have looked at ANZ's wealth operations on several occasions over the past decade; the due diligence was known in the company's Circular Quay tower as Project Blue.
ANZ chief Shayne Elliott said this month the bank had received several unsolicited approaches from potential buyers of the wealth arm as a whole or its individual parts. A piecemeal sale of the individual parts would be "complicated but not impossible", he said, but would be more costly for ANZ.
The biggest division in the ANZ wealth business is life insurance, which has $1.6 billion of in-force premiums, representing a 13 per cent share of the individual market; the funds management division has $48 billion of assets under management.
