The times and the move towards comprehensive income products in retirement continue to suit Challenger with the company reporting a 21 per cent increase in statutory net profit after tax to $398 million on the back of record annuity sales.
In doing so, the company flagged a further push into the financial planner distribution via platform arrangements with AMP, BT and others.
The company’s full-year results revealed annuity sales up 20 per cent to $4 billion with group assets under management up 17 per cent to $70 billion.
Commenting on the result, Challenger chief executive, Brian Benari said it had been a significant year for the business, delivering solid growth while implementing key strategic initiatives which positioned it extremely well for the future.
“Our strategic focus on expanding both our distribution relationships and product offering, has set a clear pathway for future growth,” he said. “This is enabling us to significantly broaden our customer reach both domestically and offshore.”
“During the year we announced plans to offer Challenger annuities via the platforms administered by AMP and BT,” Benari said. “When these arrangements commence in coming months, Challenger annuities will be represented on platforms used by two-thirds of Australia’s financial advisers.”
The company’s ASX announcement pointed to its focus on expanding its distribution footprint, noting that beyond its plans with AMP and BT it had launched annuities on the ClearView Wwealth Solutions platforms, added CarePlus to the Colonial First State platform and had made Challenger annuities available to three industry funds through Link Group and launched Challenger-backed annuities with Suncorp.
Looking over the horizon, Challenger said it was well positioned with strong product offerings, expanding distribution networks and highly efficient operations.
It said it was targeting a normalised net profit before tax of between $545 million and $565 million, representing growth of eight to 12 per cent on the current financial year.
The company today also announced to the ASX that it had entered into a strategic relationship with Japan’s MS&AD Insurance Group Holdings supported by a $500 million equity placement to MS&AD.
Challenger has partnered with Mitsui Sumitomo Primary Life Insurance Company, a subsidiary of MS&AD, since November, last year, to provide Australian dollar annuities in Japan.
It said the strategic relationship would build on that arrangement and broaden access to the Japanese market.