Australian wealth group Challenger has posted a 9% rise in normalised net profit after tax, which totalled $456 million for the year to June 30, in line with earnings guidance.

Its life business made $461 million in normalised profit, up 6% on the previous year. Life sales, comprising domestic retail lifetime and Japanese annuity, reached $8.6 billion.

Challenger says a 26% increase in retail lifetime annuity sales to a record $1.1 billion “demonstrates the growing demand for guaranteed income as more Australians enter retirement and aged care. This also reflects [our] successful strategy to grow longer-tenor, more valuable annuity sales.”

From this financial year, Challenger’s earnings guidance will move from normalised net profit after tax to normalised basic earnings per share (EPS).

In 2025-26, it is targeting normalised basic EPS of 66c-72c. Last financial year, normalised EPS grew 9% to 66.3c.

“Challenger has a clear strategy and is executing against it,” CEO and MD Nick Hamilton said. “More broadly, our business has the ambition to meet the retirement ‘megatrend’ and benefit from structural market growth and regulatory reform.”

He says the prudential regulator’s proposed reforms around annuity products will “lower insurers’ capital requirements, support industry growth and improve balance sheet resilience.

“Importantly, reform will also help ensure guaranteed income is an essential building block of retirement plans for millions more Australians.”

Challenger has submitted a response to the regulator’s consultation on capital settings for annuity products.

“[We] welcome progress on this important regulatory reform that will help develop Australia’s retirement income market by promoting innovation, supporting greater take-up of lifetime income products and enabling greater choice and certainty for retirees.”

Challenger says further consultation on draft prudential standards and guidance is expected this year.