Annuities sales boost Challenger results


By Daniel Paperny

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Strong growth and momentum in annuities sales have contributed to a solid performance by Challenger in the first half of the 2017 financial year.

The firm yesterday announced record annuities sales of $2.2 billion in the six months to December 2016, up 34 per cent on the previous year, with sales in both the first and second quarters exceeding $1 billion.

Its assets under management were $64.7 billion, up by 12 per cent, and net flows into its funds management business totalled $3.2 billion over the six months.

Challenger chief executive Brian Benari noted the company had achieved not only strong performance in its annuity sales, but also an improvement in the quality of sales generated due to a reweighting to longer-term business.

“During the first half we achieved record annuity sales, strong growth in funds under management and a record low cost-to-income ratio,” Benari said.

“Importantly, we also paved the way for future growth by expanding our distribution relationships and product offering.

“This is enabling us to make the most of the opportunities arising from rapid growth in the retirement income market.”

As part of the results announcement, he revealed Challenger was partnering with BT Financial Group to offer Challenger annuities on the BT Panorama platform in the first quarter of 2018.

He said Challenger had also signed a deal with Standard Life Investments to launch a new retirement product in Australia.

Known as the Challenger Absolute Return Global Bond Strategies Fund, the new product will aim to provide a positive absolute return over the medium to longer term in all market conditions and a steady stream of income for Australian retirees.

Benari said while Challenger had embarked on eight new distribution and product initiatives in the first half of the 2017 financial year, the group would continue to build on its Australian annuity relationships and expand its customer reach.

“As the superannuation industry pivots towards generating sustainable retirement incomes supported by the government’s reform agenda, we are excellently positioned to meet the needs of the rising wave of retirees,” he said.

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