Vernon took over the helm of AMP in December. In the six months to June 30 the company reported operating earnings of $69.1 million, up 4.1% on the corresponding period last year.
“I’d describe the result as very, very solid. It builds momentum. Jack’s legacy in this business has been a real focus on our consistent momentum. What I’ve sought to do is make sure that we continue that.”
Vernon says he isn’t too focused on the numbers, rather it’s that the results allow AMP to “do the things we want to do – paying claims and helping people get to retirement.”
“Those are the key metrics, the ones that matter most to the sort of community we serve. The financial results are important because they deliver to the stakeholders and allow us to continue to do what we do.”
Vernon singled out claims management as an important achievement in the past few years, this includes helping people get back to work.
“In the first half of 2017, AMP supported more than 1,000 families in their time of need by paying $46.2m in life insurance and $10.2m in trauma claims. AMP also helped 600 New Zealanders who were unable to return to work because of an illness or injury by paying out $12.9m in income protection claims, and assisted 66 Kiwis to return to work following a major illness or injury,” Vernon said.
The company reported experience gains of $8 million and said that “reflected overall effective management of claims, with an increased focus on helping customers return to work and a better lapse experience.”
Lapse rates were 10.6%, 0.5 percentage points improved from the first half last year.
“When you look across the board, we’ve been very focused on cost, as you need to be. What that’s allowing us to do is hold prices steady. In the environment, what we’re seeing is a creep in prices. We’ve been really disciplined around that,” Vernon says.
Operating earnings: Up 4.1% to $69.1 million.
Cost to income ratio: Improved by 1.4 percentage points to 27.2%. Controllable costs down 6.4% compared to corresponding period.
Cashflows: Net cashflows decreased year-on-year by 27.1% to $57.5 million.
Assets under management: Increased 7.1% to $16.3 billion.
Experience gains: $8 million
Lapse rates: 10.6%.
Total annual premium income: $339 million (Unchanged from 1H 16).
General insurance: General insurance profit share decreased 12.9%.
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