AMP Financial Services NZ continues to grow
Thursday 24 August 2006
AMP Financial Services NZ continues to grow
Profit up 6 per cent for the period
Life insurance sales climb 40 per cent
Held market-leading position in workplace savings
Addition of 38 new Advisers
AMP Financial Services New Zealand today reported an underlying profit of NZ$29.4 million for the half-year ended 30 June 2006, an increase of 6 per cent on the same period last year.1 Greg Camm, Managing Director for AMP Financial Services New Zealand, said.
Following a solid performance in our full year results, we.ve delivered an encouraging result for the first six months of 2006. This has been driven by core parts of AMP's business that have consistently performed well we've achieved impressive growth in life insurance sales, continued leadership in the workplace savings market and an ongoing industry-leading customer retention rate. .With a plan to double the value of our business over the next five years, leveraging our strength in these areas to achieve sustained growth, along with the development of new business opportunities, will be fundamental to our success,. he said.
AMP's life insurance business grew market share for the tenth consecutive quarter. Inforce annual premiums were up 16 per cent year on year, to NZ$96 million2. That growth increased AMP's share of the annual risk premium inforce business from 10.7 per cent to 11.2 per cent.
Growth in life insurance was driven by a significant 40 per cent increase in new sales over the half-year period, underpinned by a commitment to writing quality business, new processing practices and strengthened field support for Advisers and brokers.
AMP's growth in the life insurance market was reflected in a 38 per cent increase in the Value of New Business (VNB) compared to the same period last year, driven by improving mortality rates and increased volumes of life insurance sales. .
What.s really pleasing about our growth in the life insurance market is that AMP.s VNB continues to climb, which means that we.re growing in a profitable part of the industry. A contributing factor here is our customer retention rate, which is a market-leading 93.2 per cent, compared to an industry average of 88.4 per cent. AMP.s success in attracting new customers and retaining existing ones is testament to our well-priced, best-of-breed products backed by excellent service and a strong claimspaying ability,.said Mr Camm.
AMP life insurance is purchased primarily through the company's Adviser network, which is rapidly expanding, with the addition of 38 new Advisers over the last six months, following the 48 Advisers recruited in 2005. This means that AMP now has 347 Advisers nationwide.
Increasing our Adviser numbers continues to allow New Zealanders access to quality advice, which is particularly important when you consider independent research shows that advice is crucial in preventing underinsurance. We've continued to raise the standard of professionalism amongst our Advisers, introducing a new operational compliance component to our industry-leading Quality Assurance Programme,. said Mr Camm.
In the workplace savings market, AMP has maintained its number one position in corporate master trusts through its flagship product, the New Zealand Retirement Trust, with a market share of 27.4 per cent. Assets under management grew 9.1 per cent to NZ$946.1 million, up from $867.1 million in December 2005.
AMP will continue to focus on employer-sponsored workplace savings, an area in which it has a strong offering and that many are predicting will grow, driven by the KiwiSaver initiative and planned investment tax changes. Mr Camm said, .We welcome the introduction of the KiwiSaver scheme, particularly given that saving in the workplace is the most effective way to encourage New Zealanders to save. We also strongly support the new investment tax regime which will simplify and strengthen investment taxation..
During the period, assets under management for AMP.s retail managed funds increased 5 per cent to NZ$1.9 billion. This was driven by good investment returns and a strong market for the first half year, a period in which AMP launched a wrap platform for its Advisers, managed by First New Zealand Capital. Meanwhile, the business experienced net cash outflows of NZ$6.7 million, compared to net outflows of NZ$56 million for the same period last year.
AMP launched a home equity release product for selected, accredited Advisers during the first half year, allowing its customers to have the option of releasing a portion of equity in their house as part of their wider retirement savings plan. An increase in AMP.s cost to income ratio from 41 per cent to 45 per cent reflected increased investment in the business, including enhancing technology platforms and investment in the brand, alongside Adviser recruitment and training.
Another key area we invested in during the period was the launch of our 2006 AMP Foundation and AMP Scholarship Programmes we'll be announcing the scholarship recipients next month. These wonderful initiatives allow us to support individuals and non-profit community organisations, operating at the grassroots level. Our contribution is not so much about writing cheques but rather sharing our expertise and our passion for creating a sense of financial security so that Kiwis can pursue their dreams and live life to the full,. said Mr Camm.
Internally, the last six months has seen the continuing evolution of a distinct high performance culture, focused on .putting the customer at the centre of everything we do, whether that be through building a highly visible brand or developing new financial solutions to keep pace with changing customer needs. We.re making good progress but the best is yet to come, he said.