AMP NZ earnings up 39 pc

AMP Financial Services managing director Jack Regan Photo / Supplied

AMP Financial Services New Zealand reported a 39 per cent rise in half year operating earnings to $41 million, as sales of new business grew well, costs were cut and it had a one-off tax benefit.

Operating expenses fell 7 per cent in the six months to June to $31m, with the fall reflecting tight cost control and further benefits from consolidating Wellington operations into Auckland, the company said today.

New life insurance business grew 36 per cent, driven by increased sales before life tax changes came into effect at the start of July.

Improved processing and strengthened support for advisers contributed.

Individual risk annual premium income rose 6 per cent.

Retail assets under management grew 15 per cent, bringing total assets under management to $5.9 billion.

Net cash flows were consistent with the same period last year, AMP Financial Services NZ said.

Strong flows from KiwiSaver offset a soft retail investment market.

Underlying flows were stronger than the same period last year when they benefited from nearly $10m of corporate superannuation mandates.

The life insurance customer retention rate, or persistency rate, improved 0.9 percent to 89.9 per cent.

The industry average was 87.2 per cent, the company said.

AMP Financial Services New Zealand managing director Jack Regan said that while some of the improvement in performance could be attributed to a one-off tax change, the underlying trend was upwards.

Strong revenue growth, cost control and cash flows were major contributors.

"The consequences of the global financial crisis, including investment market volatility and consumer uncertainty, continued," Regan said.

Life insurance sales were challenging, as many people regarded them as discretionary, and retail investor sentiment remained flat because of depressed returns and market volatility.

Market and legislative change added to the company's challenges, he said.

"Right now we are implementing a new tax regime for life insurance companies and financial adviser regulation, as well as preparing for expected licensing requirements arising from prudential supervision legislation."

- NZPA