AMP full-year profit slips

Group says challenges in life insurance sector persist, will continue to seek out opportunities in high growth Asian markets.

AMP (AMP) has posted a modest decline in full-year net profit, but will continue to seek out opportunities in high growth Asian markets as it grapples with the ongoing challenges facing the domestic life insurance sector.

In the twelve months to December 31, AMP posted a net profit of $672 million, only a slight 2% decrease on the $689 million booked in the previous year.

Underlying profit was $849 million, 11% lower than the $950 million booked in 2012.

AMP said underlying profit benefited from strong growth in Wealth Management, AMP Bank, Mature and New Zealand, but was offset by the challenging life insurance environment and a decline in investment income on shareholder funds

In the same period revenue was $20.113 billion, a sharp 15% lift on the $17.429 billion recorded in 2012.

The group will pay a final dividend of 11.5 cents, of which 8.05 cents will be franked, on April 10 to shareholders on the register at March 7.

AMP said the life insurance sector remained challenging, with insurance claims and policy lapses remaining at higher levels than the long-term average.

It said it had undertaken a comprehensive review across all aspects of its life insurance business and researched global best practice, and as a result launched a series of initiatives that are expected to improve claims and lapse experience over the medium term.

AMP chief executive officer Craig Meller said with the AXA integration now complete, and most of the significant regulatory changes largely implemented, AMP’s strategy will focus on the $2.2 trillion Australian wealth management market.

In addition, he said the group will look to transform the core of the Australian business to a more customer-centric model, reduce costs to maintain market-leading efficiency, as well as continuing to invest selectively internationally, with a focus on high growth Asian markets.