Moody’s has slapped AMP with a negative credit outlook, following testimony at the Hayne royal commission.

The result is an accurate reflection of AMP’s governance failures, Moody’s says.

S&P Global Ratings previously placed AMP and all its subsidiaries on a negative “credit watch” after the firm’s admissions at the royal commission.

AMP’s credit profile is under pressure because of the potential for reputational damage and additional legal and compliance costs associated with the allegations of governance failures, Moody’s says.

The profit outlook for traditional life insurance products remains uncertain due to the competitive environment, higher costs of claims and potential regulatory changes to insurance within superannuation.

AMP’s future strategy for its wealth protection business is uncertain, Moody’s says, and any reputational damage that impacts AMP’s investment cash flow will be more prevalent during the second quarter.