MLC prices majority shareholder Nippon Life enormous impairment loss
27 July 2020
Nippon Life has recorded an impairment loss on its 80% shareholding in consolidated subsidiary MLC Life.
The impairment loss was contained within the Japanese insurer’s monetary outcomes for the yr to March 31, which was launched final month.
“The decline reflected deteriorating profitability at MLC mainly due to an increase in payments for income protection insurance,” Nippon Life stated. “As a result, the company recorded a loss on valuation of shares of subsidiaries and affiliates of 68,391 million yen ($904 million) as an extraordinary loss.”
Nippon Life has pumped in extra capital on two separate events since buying the 80% share from NAB in 2016 for $2.four billion.
The latest fund injection was introduced final month, when the Japanese life insurer and NAB agreed to place in $400 million to shore up MLC’s monetary place.
Like different life insurers in Australia, MLC has been affected by the industry-wide enhance in claims fee and lapses, forcing it to ask for monetary assist from its two shareholders.
The monetary woes of MLC has sparked discuss in Japan that Nippon Life may should make one other capital injection.
A spokesman for MLC Life declined to remark to insurance coverageNEWS.com.au on the matter, saying info revealed on this planet’s largest-circulating monetary newspaper, Tokyo’s Nikkei, was “speculation”.
