Life insurer MLC will receive a capital injection of $400 million from its shareholders to shore up its financial position.

Majority shareholder Nippon Life says MLC asked for financial help from it and 20% shareholder NAB, reflecting the industry’s struggle with rising claims and lapses. The virus pandemic has also added to the pressure facing the industry.

“The increase in claims payments and others for income protection products is an industry-wide challenge in Australia,” the Japanese insurer says. “With the recent global spread of COVID-19, there is a rising need to address risks of downward pressure on its business performance expected to occur from future increase in claims, lapses and others.”

The capital injection plan will be made via a share placement that will see Nippon Life and NAB take up the stock allotment based on their current holdings of 80% and 20%.

Nippon Life says the injection will help with “enhancing the soundness of the firm” and has not ruled out further aid should the need arises.

Meanwhile MLC has appointed Rodney Cook as CEO and MD following the departure of David Hackett early this year.

Mr Cook, who ran AMP New Zealand in 1996, will start on June 15. He has held several other senior roles in the industry, including at Zurich Financial Services and Prudential UK.