AMP flags $65m Q4 profit hit

Wealth manager warns trend of policy cancellations continues to worsen.

AMP (AMP) has flagged a hit to its full-year 2013 results of up to $65 million as more customers cancel policies.

In a statement to the Australian Securities Exchange, the wealth manager said it expects a capitalised loss of $40 million to $50 million in the fourth quarter as lapses in its income protection book increase. 

AMP also flagged additional losses of around $15 million in the fourth quarter as it strengthens its reserves due to increased reporting delays of claims in its group insurance business.

The group said the two adjustments are expected to result in a $55 million to $65 million reduction in its fourth quarter operating results.

AMP said improving the performance of its wealth protection business is one of its highest priorities and it continues to work to improve claims and lapse experience.

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