Australia-based financial services company AMP has agreed to divest its 19.13% equity interest in Resolution Life Australasia (RLA).

The minority stake will be acquired by the parent company Resolution Life for $389.87m (A$524m).

The move will mark AMP’s exit from the life insurance business.

Notably, Resolution Life acquired AMP’s life insurance and mature business AMP Life last year for A$3bn. At that time, AMP retained a minority stake in RLA.

As agreed, AMP and RLA will also settle other post-completion adjustments and certain claims between them. These adjustments will require AMP to make a net payment of A$141m to RLA.

The divestment will bolster the Austrian company’s available capital by approximately A$459m boosting its flexibility.

AMP CEO Alexis George commented: “This divestment brings to a close our long and proud involvement in life insurance in Australia and New Zealand. It enables us to realise capital to further strengthen our balance sheet ahead of our demerger and continue supporting our businesses.

“The separation of our businesses is progressing well and will continue until mid-next year as planned. We will continue to provide transitional services to RLA, as agreed, and will have a shared customer and adviser connection into the future.”

The deal is expected to close in the first half of 2022, subject to regulatory approvals in Australia and New Zealand.

Earlier this year, Resolution Life raised an additional $1.6bn in capital to support growth.