AMP Returns Focus on NZ Sale Prospects

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AMP has returned its focus to its review of its ‘manage for value’ businesses.

Speaking at a media briefing on their 2018 half year results, AMP Acting Chief Executive, Mike Wilkins, says the time is right to “reinvigorate” the review of ‘manage for value’ businesses, since AMP’s priorities of stabilising the business and beginning the board renewal process have been attended to, and the search for a new CEO is progressing well.

AMP Acting CEO, Mike Wilkins

“We are talking to some interested parties about those businesses,” said Wilkins, confirming its New Zealand business is among them.

He added they are considering all opportunities: “We want to give those businesses certainty as quickly as we can but also we want to make sure we do the right thing by all parties – not just our shareholders but our customers and the people who are in those businesses. So we’ll take the right amount of time to reach the right conclusion,” he said.

“…we’ll take the right amount of time to reach the right conclusion.”

In its 1H18 results, AMP Financial Services New Zealand reported an increase in the number of income protection claims.

Operating earnings of $60.4 million were down 12.6 per cent from 1H17.

AMP stated this outcome was driven by a reduction in experience profits reflecting a rise in the number of claims it paid to support its customers who were unable to work due to an illness or injury.

It paid $103 million in insurance claims to New Zealand customers in the past six months.

AMP New Zealand Managing Director, Blair Vernon

AMP New Zealand Managing Director, Blair Vernon, said the solid first half performance is underpinned by what the company does to support its 556,000 customers, particularly at claim time.

“During the first half of the year we delivered on our commitment to help New Zealanders achieve better outcomes by providing high-quality advice, products and services through the country’s most extensive and diverse network of financial advisers,” Vernon said.

During the first half of 2018, AMP New Zealand paid:

  • $45 million in life insurance
  • $14 million in trauma claims
  • $13 million in income protection claims

The company also reported fewer term and income protection lapses in 1H17.

Lapse rates remained sound at 10.8 per cent which AMP stated reflected an ongoing emphasis on lapse management.

The company’s total annual premium income (API) increased by $4.2 million from 1H17 to $342.8 million, which it stated reflected higher new premium income stemming from strong growth in group risk new business.