Reinsurance boosts AMP wealth protection

11-Aug-2017

By Megan Tran

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AMP has improved results in its wealth protection division over the first half of 2017, with the group’s reinsurance program to reduce risk in the business paying dividends.

The group’s half-year results revealed that its Australian wealth protection earnings had increased 11 per cent to $52 million compared to $47 million in the prior corresponding period, which reflected the action taken to stabilise the business, AMP said.

Net cash flows in AMP’s wealth management business rose 76 per cent to $1.02 billion as a result of increased contributions in the lead up to the 1 July superannuation changes, while revenue from advice and the group’s self-managed super arm also increased.

The transition of corporate super mandates also supported inflows, with one mandate bringing more than 3700 new customers to AMP.

While operating earnings in the wealth management division were down 1 per cent to $193 million, AMP chief executive Craig Meller said the business had performed solidly, reflecting its strength during a time of change with the transition to the MySuper reforms.

During the first half of the year AMP paid out $1.3 billion in pensions to retirees, the company confirmed.

The group’s flagship platform, North, was also a strong performer with flows up 8 per cent and assets under management rising by 13 per cent compared with the prior corresponding period.

AMP also revealed it was targeting 5 per cent overall revenue growth in its wealth management arm, focusing particularly on its advice and SMSF businesses.

In addition, further reinsurance arrangements with General Reinsurance Life Australia, adding to the company’s previous reinsurance program announced late last year, would help to further reduce the capital intensity in its wealth protection business and improve future outcomes in the division, AMP said.

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