Tower Australia chief executive Jim Minto said that these two decisions were further steps taken in the complete refocus of the business.
"Tower Australia’s objective is to consistently deliver on our commitments by doing fewer things and doing them better within our core businesses of life insurance and related investments," Minto says.
In making the decision to close Tower’s annuities to new business Minto said that over the years Tower has built a significant, fully capitalised annuity portfolio and had won an Industry Award for Annuities in 2002.
"However, while we recognise the role this type of income-stream product plays in personal financial planning, its manufacturing requirements are significantly different to that of our core business lines," Minto said.
"With our refocus, the manufacturing of annuities now lies outside our scope but we may consider in time distributing other companies annuity products. We are retaining management of our inforce annuity portfolio and will be considering our options going forward."
The appointment of AMP Henderson to manage its Australian Ethical Funds is in line with Tower’s recent move to a multi-manager approach for its Australian Equities Portfolio.
"We retained leading asset consultant, Mercer Investment Consulting, to assist with the manager search and to provide feedback on the final selection of AMP Henderson. This supplemented our extensive in-house research and consideration of the investment manager’s standing with leading research houses."
Tower considered AMP Henderson the ‘standout’ active ethical/SRI manager with a solid investment approach and commitment to the SRI sector. AMP Henderson draws on experienced teams in Australia and the UK in its management of SRI portfolios. These teams managed more than $3 billion in SRI funds as at June 2003, and their processes have been recognised as world’s best practice by Swedish based foundation Mistra. The Australian SRI team has also been singled out for independent recognition with AMP Henderson being highly commended in the 2002 Australian Ethical Fund Awards, and ranked as a finalist in the Banksia Environmental Awards of 2003.
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