Resolution Life Australasia’s proposed acquisition of AIA Australia’s superannuation and investment business will improve the life insurer’s scale in the Australian market and drive operational efficiencies, according to S&P Global Ratings.

The portfolio consists of around AU$8.2 billion in assets and comprises superannuation, retirement, and investment products. This aligns closely with Resolution Life’s core strategy, S&P says, and supports the rating index’s assessment of the insurer as a closed-fund consolidator rather than a pure run-off.

S&P has clarified, however, that the proposed acquisition reinforces but does not enhance its ratings on Resolution Life.

AIA Australia currently enjoys an A+ credit rating from S&P while Resolution Life has an A- rating. S&P’s outlook on both companies is stable.

S&P also observed that the acquisition is Resolution Life’s first, following its purchase of the defunct AMP Life’s business. It expects Resolution Life to fund the acquisition primarily with internally generated capital, producing little effect on the insurer’s capital position. 

The businesses acquired consume only modest amounts of capital, S&P added.