Following a media announcement in Japan, MLC Life Insurance confirms that Nippon Life and National Australia Bank (NAB) will make a combined capital injection of AUD $650 million capital injection to MLC Limited, the entity operating MLC Life Insurance.

Rodney Cook, Chief Executive Officer, MLC Life Insurance, says the significant additional capital will set the business up for future success, beyond just provisioning for the impacts of COVID-19.

“Today’s announcement demonstrates the emphatic support of our shareholders and their backing of our strategic direction. It sets us up to survive and thrive in the coming post-pandemic environment. It provides real security of policyholder benefits, meaning we will continue to deliver on the promises we make to our customers and business partners.

“As a member of the Nippon Life Group of Companies, we benefit from its long-term view. This additional capital also supports our strategic goals. These include playing a larger role in the group insurance market, developing the industry’s leading claims function, and making it more efficient for advisers and superannuation funds to provide insurance to their customers through the use of technology.”

In the 12 months to 30 November 2020, MLC Life Insurance paid nearly $1.1 billion to customers and their families in their time of need.

Nippon Life said:

“Nippon Life will work closely with MLC Life Insurance, carefully monitor developments and continue to extend its support to the business.”

The additional capital is divided into two parts: an AUD $530 million ordinary equity issue to be contributed by Nippon Life and NAB (in line with their current ownership interest of 80% and 20% respectively) and Tier 2 capital notes of AUD $120 million to be subscribed to by Nippon Life.

Both transactions are expected to settle on 29 December.