AMP profits rise after merger

AMP Financial Services New Zealand, which along with its parent AMP Ltd merged with AXA in March last year, reported operating earnings of $99 million for calendar 2011.

The result compares with a pre-merger operating profit of $74 million reported for 2010.
AMP NZ said last year's result included a nine-month contribution from AXA following its merger with AXA's New Zealand business.

The result was underpinned by growth in assets under management from strong cash flows into KiwiSaver, solid life insurance margins, improved customer retention and a one-off gain of $3m when AMP and AXA merged, it said.

Margins margins were affected by lower bond yields and additional investment in systems and support for AMP-aligned advisers into their newly regulated environment. The impact of the Christchurch earthquakes also affected profit margins.

Individual life annual premium income grew to $288m, despite the challenging economic environment, the impact of the Christchurch earthquakes and a competitive market.
Net cash flows of $318 million benefited from increasing flows into KiwiSaver.

The life insurance persistency rate or customer retention rate for the combined business is 90.4 per cent and 2 per cent higher than the industry average.

AMP NZ managing director Jack Regan said the results reflected resilience in difficult times.

"Despite unprecedented challenges in the market, the result, when adjusted for one off impacts, compares favourably to last year's," he said in a statement.

The company is involved in superannuation, personal insurance, retirement incomes, retail managed funds and financial advice in Australia, and in workplace superannuation and retail managed funds in New Zealand.

In Australia, the parent company AMP reported a net profit of A$688 million for the year, including nine months' contribution from AXA, compared with a profit of A$775m in the previous year. The result also included merger transaction and integration costs.

AMP said its underlying profit - which removed merger-related costs and some of the impact of investment market volatility - was A$909m in 2011 compared with A$760m in 2010.

AMP is the largest non-bank wealth manager in Australia and New Zealand.