AMP New Zealand reports operating earnings of $69.1 million

10 August 2017

AMP Financial Services New Zealand (AMP New Zealand) has reported operating earnings of $69.1 million for the half year to June 2017 (1H 17), an increase of 4.1 per cent on 1H 16.

Assets under management increased 7.1 per cent to $16.3 billion reflecting positive market performance and net cashflows.

Blair Vernon, Managing Director AMP New Zealand, said: “AMP New Zealand is focused on delivering high-quality advice through the country’s most extensive and diverse financial adviser network, to help more New Zealanders achieve their retirement aspirations and to protect their financial wellbeing.

“We continue to strike the right balance between cost efficiency and investing in the future of our business through our people, platforms and systems to benefit our customers, who in the first half of the year received $99.2 million in claims payments to support them in their time of need. In addition, the account balance of members in the AMP KiwiSaver Scheme continues to grow above the industry average.”

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Performance against key measures:

Operating earnings:

Operating earnings increased 4.1 per cent to $69.1 million.

Cost to income ratio:

The cost to income ratio improved by 1.4 percentage points to 27.2 per cent and controllable costs decreased 6.4 per cent to $39.8 million from 1H 16. AMP New Zealand continues to focus on cost control, including business reorganisation and product rationalisation.

Cashflows and assets under management (AUM):

Net cashflows were positive overall, but decreased year-on-year by 27.1 per cent to $57.5 million, reflecting seasonal differences
in mandate wins. AUM increased 7.1 per cent to $16.3 billion as a result of positive market performance and net cashflows.

As at 30 June 2017, the AMP KiwiSaver Scheme reached $4.6 billion in AUM, an increase of 13.4 per cent from 30 June 2016. AMP is one of the largest KiwiSaver providers with 12 per cent of the total KiwiSaver market and 236,000 customers.

Experience gains, lapses and claims:

Experience gains of $8 million reflected overall effective management of claims, with an increased focus on helping customers return to work and a better lapse experience.

Lapse rates were 10.6 per cent, 0.5 percentage points improved from 1H 16, as a result of a continued strong emphasis on lapse management.

Mr Vernon noted: “In the first half of 2017, AMP New Zealand supported more than 1,000 families in their time of need by paying $46.2 million in life insurance and $10.2 million in trauma claims. AMP also helped 600 New Zealanders who were unable to return to work because of an illness or injury by paying out $12.9 million in income protection claims, and assisted 66 Kiwis to return to work following a major illness or injury.”

Total annual premium income (API):

API of $339 million was unchanged from 1H 16.

General insurance:

General insurance profit share decreased 12.9 per cent on the previous year to $5.4 million due to higher natural hazard claims. In 1H 17, AMP New Zealand customers were paid $29.9 million in general insurance claims.

Other key highlights for AMP New Zealand include:

  • AMP launched its new general insurance digital platform and AMP Everyday suite of digital products, enabling access for customers to research, quote and purchase cover online.
  • AMP’s Women in Leadership Pathway programme, now in its fifth year, is helping more Kiwi women reach their potential and encouraging diversity throughout the business world.
  • AMP opened applications for its 19th annual AMP Scholarships and will award recipients a share of $200,000 to help them achieve their dreams.
  • AMP’s KiwiSaver Scheme received the SuperRatings Gold Ratings and AMP won 11 awards at the NZ Direct Marketing Awards