This potential reduction in future sales is a valid concern. It...

This potential reduction in future sales is a valid concern. It is a reasonable assumption that all else being equal that AMP life insurance sales will fall. But not all is equal in terms of others now having to price more rationally and the opportunity for AMP to develop a better product/service offer in life insurance. 

On top of this, AMP product sales could fall but given the large existing book it could still be a profitable business and more value to retain.

i would have rather see AMP develop a cohesive new strategy rather sell at what is best a low end price. A sale a year from now would not have cost them. Since announcing this sale $2 billion has been wiped off their value. 

The question has been raised - what Aus life insurers make money, I had a quick look at Westpac. Although the data is mixed with other insurance, the financial reports show them making hundreds of millions. 

Life insurance has been misprinted for decades - too heavily discounted for group policies - and there are weaknesses in old and even existing income protection product that mean they are not profitable. To remain viable products this will change. Or at least I believe it will. I think AMP should have looked harder at being the Australian company that dominated in future. The banks have had their decade or two dabble in life and wealth management, AMP has 170 years of history. 

Even with history, or due to history, it can be the right decision to exit - but it is exiting a core business - one of the reasons it exists. It did not have to do it right now at this price. I am dubous about the motives. Is it to make life easier “less complex” - no need to deal with volatility and capital management or actually getting the product/service/price right for a core part of the business? A tidying up for sale? If this maximizes value to shareholders - great. If it is just about showing some activity and making life smoother/easier for AMP directors and management - I am concerned it is a suboptimal play.