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AMP turnaround efforts ‘are working’

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AMP says its wealth protection arm’s annual inforce premium fell 1% to $1.94 billion in the first quarter.

Individual lump sum premium declined 1% to nearly $1.11 billion and individual income protection dropped by $5 million to $395 million.

“Claims and lapse experience in Australian wealth protection indicates the measures we’ve taken to stabilise the performance of the business are working,” CEO Craig Meller said.

Wealth protection cash outflows dropped to $209 million in the March quarter from $248 million in the corresponding period last year, and cash inflows fell to $476 million from $479 million. Net cashflow for the quarter was $267 million, up from $231 million.

AMP has acted to turn around its wealth protection business after the division slumped to a $415 million loss last year. Steps include strengthening assumptions and entering into a reinsurance agreement with Munich Re.

“These actions were taken to stabilise the insurance business and minimise future impact on group earnings from the division,” Mr Meller told last week’s annual general meeting.

“Importantly, the [first-quarter] results… demonstrate that the actions are working and that the insurance business is now performing in line with our revised assumptions.”