AMP Limited has announced a series of new reinsurance agreements which it says will release around $500 million from AMP Life and reduce future earnings volatility.
At the same time the company has pointed to reliance on its advice and self managed superannuation funds (SMSF) businesses to help the firm deliver on an overall divisional revenue growth target of five per cent.
The announcement came as the company announced a first half net profit of $445 million, down from $523 milllion in the previous corresponding period albeit that underlying profit was up four per cent to $533 million.
The company said its Australian wealth management operating earnings were down one per cent to $193 million, describing the result as “resilient”.
It said to offset the impact of margin compression, the company would be targeting additional revenue growth from its advice and SMSF businesses.
The company said it expected revenue to increase by 10 per cent in the areas covering advice and SMSFs, with growth in advice and SMSF revenues expected to emerge in the second half of this year and “accelerating into 2018”.
Commenting on the results, AMP chief executive, Craig Meller said he believed the company had made good progress in delivering on its strategy.
“In wealth protection we’ve completed a set of comprehensive reinsurance agreement which will release capital from AMP Life and reduce earnings volatility,” he said.
“In wealth management, we’ve delivered a solid performance, managing margin compression effectively and showing our strength as the market leader for superannuation during a period of heightened market activity due to MySuper transitions.”
Meller pointed to AMP Capital having grown strongly in the period underling its emerging reputation as a global leader in real estate and infrastructure investments.
