AMP's adviser numbers decrease

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AMP New Zealand has announced operating earnings of $74 million for the year to December 31, 2010, up 9% on the 2009 figure of $68 million.

Friday, February 18th 2011, 7:24AM 3 Comments

by Benn Bathgate

The company said the increase was achieved through growth in both insurance and wealth management operations, tight cost control and improved customer retention.

AMP also revealed total aligned intermediaries in its AMP Financial Services NZ unit decreased by 39 to 322.

"The decrease was primarily due to the changing regulatory and operating environment and the rationalisation of less successful advisers as AFS NZ focuses on strengthening the quality of its distribution network," the company said.

The AFS NZ unit, principally focused on risk insurance, saw operating earnings rise 7%, or A$4 million, in 2010 to A$58 million.

However, despite the rise profit margins fell 11% due to an increase in lapse rate assumptions on risk products art the end of 2009 and a $3 million impact on the profit share arrangement between AMP and its general insurance provider in the wake of the Christchurch earthquake.

An 8% increase in new life insurance business was reported, and its life insurance customer retention improved 1.7% to 90.1%.

Underlying operating profit from individual risk API was up 4.1% from $145 million in 2009 to $151 million and the lapse rate declined from 11.6% to 9.9%.

AMP NZ managing director Jack Regan said the results reflected a difficult economic climate, with insurance sales slowing across  the industry.

"Despite the challenging market we have focused on building a leaner more productive business focused on enhancing products and services for consumers and building strong distribution relationships," said AMP NZ managing director Jack Regan.

AMP also outlined how it would boost growth through the proposed merger with AXA, saying the tie-up would provide, "a broader and deeper distribution footprint, providing multi-brand advice options and improving distribution through IFAs."

Benn Bathgate is a business reporter for ASSET and Good Returns, email story ideas to benn@goodreturns.co.nz

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