AMP Financial Services reports increased operating earnings

28 August 2008

· Operating earnings increase 20 per cent to NZ$32.1 million

· Net cash flows increase 294 per cent to NZ$67 million with AMP number one in its chosen markets for the half year ended June, 2008

· AMP KiwiSaver market share of funds under management 15 per cent

· Life Insurance in-force premium growth of 12.5 per cent for the year ended June, 2008

· Life Insurance in-force market share increases for the past 18 consecutive quarters

· Operating expense growth limited to 2.5 per cent

AMP Financial Services today reported a 20 per cent increase in operating earnings to NZ$32.1 million for the half-year ended 30 June 2008, up from NZ$26.7 million in June 2007. Net cash flows, boosted by KiwiSaver, increased 294 per cent to NZ$67 million, against the market trend. The overall financial services industry reported negative cashflows in excess of $1.5 billion over the past year.

Operating earnings increased due to effective operating cost control and improved experience profits, due in part, to better claims management, resulting in improved Life Insurance margins.

Life Insurance premium income increased 12.5 per cent and market share has grown for the past 18 consecutive quarters, underpinned by good sales performance and market leading customer retention.

AMP’s 85,000 KiwiSaver members represent 12 per cent of the KiwiSaver market by number and 15 per cent of the total market by funds under management.

Jack Regan, Managing Director, AMP Financial Services said that consistent with its strategy to target contributing members, AMP’s strength in the workplace market was the key factor in the results.

“In a difficult environment, AMP, has performed strongly in the corporate superannuation market with our KiwiSaver and New Zealand Retirement Trust (NZRT) schemes proving to be a compelling value proposition in the workplace. NZRT remains the market leading master trust whilst our KiwiSaver scheme ranks third in funds under management and cash flows and much of that growth has come through our strong relationships with employers,” he said.

Operating costs increased by NZ$0.8 million to NZ$32.7 million, reflecting effective cost control that limited expense growth to 2.5 per cent.

Mr Regan said operating costs had been carefully managed during a period of change in the business, noting the significant investment in transformation which drove overall controllable costs to NZ$39.1 million.

“We have a business transformation programme underway that aims to grow the business by driving cost efficiencies and improving service delivery, in order to take account of opportunities arising from unprecedented change in our industry.

“We have already seen service and efficiency improvements, and the programme will continue into the second half and beyond,” he said.

AMP adviser numbers remain steady at around 400, including 32 Roost mortgage and insurance advisers, cementing AMP’s position as one of New Zealand’s largest distributors of financial services.

Ends

Media contact:
Veronica Ruddenklau
AMP Public Affairs
09 337 7723 or 021 960 864

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