Executives behind Nippon Life’s acquisition of MLC Life Insurance have expressed optimism about the prospects for their first foray into the Australian financial services market.
Nippon Life senior managing director Hiroyuki Nishi has told delegates to the Association of Independently Owned Financial Professionals conference in Japan that the 120-year old life company’s board has high hopes for its antipodean venture.
“We intend MLC Life Insurance to be number one in the market, sooner or later,” Mr Nishi said at a briefing at Nippon Life’s Tokyo headquarters.
Addressing the same conference, Minoru Kimura, an executive with Nippon Life’s international business, expanded on his colleague’s comments, listing specific segments of the Australian wealth management market as key targets for the growth, including the near-monopolised annuities space dominated by Challenger.
“Population growth, established financial systems, talented people – these are the things that make it comfortable for us to enter Australian market,” Mr Kimura said. “The ability to increase market share in the annuity space is one of the exciting opportunities.”
An outlook of population decline and low domestic returns has made overseas ventures an essential growth ingredient, Mr Kimura said.
Speaking to InvestorDaily on the sidelines of the event, MLC chief operating officer Sean McCormack said the cultural shifts emanating from the change of ownership structure put the life company in a strong position to expand into new product segments.
“Nishi-san has very high expectations and wants us to be number one – he says we should ‘not hurry, but be quick’,” Mr McCormack said.
“So for us that means we need to grow strongly across all current market segments and unlock new opportunities as well. We are hoping to grow really strongly in retail advice, this is a really important channel for us going forward.
“Group insurance is also important, we are looking more at the industry fund sector than previously. And finally, we need to grow the bank channel.”
While he stopped short of announcing a formal push into the annuities space, as indicated by Mr Kimura, the COO said MLC will be looking to leverage Nippon Life’s expertise in the retirement income market in Japan, where the company is a leading provider of annuities.
More broadly, Mr McCormack suggested that the Nippon Life-MLC deal may precipitate a rekindling of interest in mutualisation among players in the Australian life industry.
“I don’t want to speculate about what specific competitors might do, but … I do think that the whole mutual concept and long-term thinking is far more in sync with how a good life company operates,” he said. “I would expect that over time we would start to see ownership structures reflect that.”
MLC Life Insurance will be undertaking a $300 million overhaul of its technology offering as it moves off NAB’s architecture, Mr McCormack revealed, aiding its parent company’s ambitious growth goals in the Australian market.
Nippon Life acquired an 80 per cent stake in MLC Life Insurance in October 2015 in what was the Japanese firm’s first majority position in an overseas company. NAB retains a 20 per cent stake in MLC Life Insurance.
Wilson Asset Management has completed its merger with Century Australia Investments, as it saw a positive outcome following the royal commis...
Australia saw 583 merger and acquisition (M&A) transactions worth $125.2 billion in 2018, with the private equity sector marking the hig...
Managed Accounts Holding is rebranding to Xplore Wealth to reflect the company’s growth purpose and underline its offering. ...