SYDNEY - Financial services group Challenger International has been granted a life office licence by the UK Financial Services Authority, allowing it to introduce specialist annuity products.
The company, which doubled its net profit to A$109 million ($132 million) in the six months to the end of December, plans to have
its annuity products for sale in the second half.
"In the shorter term, we aim to be selling annuities in the UK at a similar rate as in our Australian annuities business - so the target is to be selling at the rate of A$300 million per annum in the UK by the end of 2002," managing director Bill Ireland said in a statement to the Australian Stock Exchange yesterday.
Shares in Challenger, almost one-fifth owned by Australia's richest man, Kerry Packer, dropped 2c to A$2.91 in mid-morning trade in a flat overall market.
Challenger has been preparing to enter the UK retirement incomes market over the past 18 months.
The process included the commitment of capital, the establishment of administration systems, mortality reinsurance arrangements and planning the distribution strategies for its existing sales force.
Ireland said the compulsory purchase annuity market in the UK was about £8 billion ($26.2 billion) a year.
The Challenger group has about A$2.2 billion in property holdings in Australia and the UK. The secure long-term leases from these properties met the long-term liabilities of the group's life insurance company.
Challenger said it had more than A$9 billion in total assets under management and 100,000 investors in Australia, New Zealand and the UK.
