Challenger surfs annuities wave
Strong lifetime annuity sales have helped drive Challenger Limited to a strong first-half result profit.
The company announced to the Australian Securities Exchange today that annuities sales had increased 38 per cent for the period, helping drive net profit after tax up to 10 per cent to $164 million.
The result saw the directors declare an interim dividend of 12.5 per cent per share.
Commenting on the result, Challenger chief executive Brian Benari said annuity sales had been propelled by product innovation “and the rising tide of baby boomer retirees”.
He said funds under management (up 27 per cent to $45 billion) had been growing in line with strong boutique performance and mandated superannuation flows.
“From now until June we will focus on marketing and selling lifetime and care annuities, and supporting our boutique managers in their quest for out-performance,” Benari said.
The importance of annuity sales to the Challenger result was underlined by the CEO’s comment that the company had sold more lifetime annuities in six months than the entire 2013 year, something which Benari said should dispel any doubt about the revival of the Australian lifetime annuities market.
Looking over the horizon, Benari pointed to the company’s recent acquisition of specialist self-managed superannuation fund (SMSF) provider Bendzulla Actuarial and said it was exploring the provision of additional SMSF trustee services.
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