Superannuation and insurance sales in Colonial’s Australian Financial Services division (AFS), which includes financial planning and banking operations, rose 120 per cent in 1999.
Superannuation and insurance sales in Colonial’s Australian Financial Services division (AFS), which includes financial planning and banking operations, rose 120 per cent in 1999.
New business sales were $3.6 billion compared to $1.8 billion in 1998. Colonial group managing director Peter Smedley says the rise in sales was due, in part, to the successful merger of Prudential and L & G into the company, two years ahead of schedule.
“During 1999, Colonial reinforced its position as Australia’s leading ‘allfinanz’ business and benefited from efficiencies of scale arising from sustained organic growth and the successful integration of acquired business,” he says.
The integration of the Prudential and L & G has produced annualised cost savings of $162 million, Smedley added.
The strong performer in sales for Colonial last year was master trusts, which were up 223 per cent to $1.7 billion, leading to a 8.4 per cent market share, according to the company. This compared to $538 million in 1998.
Smedley says the key to this increase in sales has been the company’s bigger distribution network which has led to more cross-selling of products. The cross-selling ratio is now 21 per cent, with sales of master trusts through the retail network up 200 per cent.
It also saw $684 million of Colonial First State investment products sold by the AFS sales team in 1999. This compared to $410 million in the previous 12 months.
The stronger sales saw the AFS after-tax profit jump 53 per cent to $324 million for the 1999 financial year, compared to $212 million in the previous 12 months.
Colonial First State also reported a strong jump in profits for the 1999 financial year. Its profits were up 67 per cent to $70 million.
The inflows of external funds during the year rose 53 per cent to $8.7 billion and Colonial First State now has $55 billion under management. This compared to $45 billion for the year ending December, 1998.
The year has also seen a turnaround in external funds under management; these now exceed internal group funds for the first time. External funds account for 54 per cent of Colonial’s fund management business.
