AMP’s life insurance arm continued to struggle in what was otherwise a strong quarter for the company, according to its third quarter update.
The third quarter of 2013 saw AMP’s Wealth Protection business incur a $24 million loss, half of which came from lapsed policies.
The result has prompted AMP to revise its lapse assumptions for the National Mutual Life Association (old AXA) income protection book, as well as its 'incurred but not reported reserves’ for the group insurance business.
The two adjustments are expected to result in a $55-65 million reduction in AMP’s operating results for Q4 and have the potential to impact the company’s operating result for the end of the 2013 financial year.
“AMP regards improving the performance of the Wealth Protection business as one of its highest priorities and continues to implement short and medium-term actions to improve claims and lapse experience,” the company said.
Other parts of the business, however, had a strong quarter, with total retail net cashflows on AMP platforms for the quarter more than doubling to $567 million from $229 million in the 2012 corresponding period.
Wealth management continued to perform well with a 5 per cent increase in assets under management on the June quarter, which was attributed to a strong performance of the North platform and AMP Flexible Super.
“The AMP SMSF business administered approximately 9,800 trustee accounts, including approximately 1,400 SuperIQ accounts, as at 30 September 2013, up from 9,650 accounts as at 30 June 2013,” the company added.
“This does not include the accounts gained as a result of SuperIQ’s recent acquisition of Tranzact Limited.”
