Insurance issues hit AMP earnings
Poor insurance claims and lapse experience are impacting AMP Limited earnings, according to the company's earnings update released to the Australian Securities Exchange (ASX) today.
The company said losses for its Australian wealth protection division were $32 million for the five months to 31 May, comprising $26 million in insurance claims and $8 million in lapses, offset by what it described as $2 million of "other positive experience".
However, AMP said that other areas of the business contributing to the net profit attributable to shareholders were consistent with forecasts for the first half of 2013.
The company attributed the insurance issues to "the ongoing volatile nature of experience across AMP's insurance portfolio, which has in-force premiums of more than $1.7 billion".
"The industry is experiencing increased pressure on insurance claims and policy lapses," it said.
AMP said that, overall, the rest of the business was performing in line with market expectations.
"Stronger operating results in AMP's bank, mature and New Zealand businesses in the five months to 31 May, have offset a lower result in wealth management relative to market expectations," it said.
The earnings update said underlying profit for the first half was expected to be within the range of $415 million to $435 million.
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