For the half year up to 30 June 2013, AMP’s net profit increased by 5.4 per cent compared to the prior corresponding period, from $373 million in the first half of 2012 to $393 million. AMP reported underlying profit of $440 million, compared with $488 million for the first half of 2012.
The AMP board declared an interim dividend of 11.5 cents per share, compared with 12.5 cents per share for the 2012 interim dividend.
“The combined earnings from all businesses, excluding our wealth protection business, were up 17 per cent,” said AMP chief executive Craig Dunn.
“Net cash flows increased significantly in our wealth management business, investment markets continued to improve and we drove down costs,” he added.
AMP recorded its best net cash flows in wealth management for the last six years, which increased approximately sixfold on the first half of 2012 to $1.4 billion.
Further, reflecting growth in AMP Bank profits, which are up 31 per cent, AMP’s operating earnings for its wealth management business unit increased 20 per cent compared with the first half of 2012.
AMP Financial Services also improved on last year’s results, with net cash flows at $862 million. According to AMP, this reflects the success of the North platform and AMP Flexible Super.
North platform’s net cash flows almost tripled to $1,864 million, compared with $636 million for the first half of 2012, according to the results.
“We’ve continued to invest in the North platform, available to our broader advice network following the merger, which has led to a very strong growth in North cash flows - they’ve almost tripled on the same half last year,” said Mr Dunn.
However, the operating earnings in wealth protection decreased 52 per cent from the first half of last year to $64 million. AMP stated these results reflect a higher level of claims and insurance policy lapses than expected.
“Clearly improving the performance of our wealth protection business is a really critical priority with the management team,” said Mr Dunn.
“Success in this part of the business really is about our ability to help customers return to work sooner, and that’s a good thing for customers and that’s a good thing for AMP.
“The life insurance sector is facing both structural and cyclical change, and a range of initiatives are in train to address these factors. These include improved customer retention campaigns [and] additional resources to handle customer claims more effectively."
