This indicates a three per cent increase from the latest quarter. Life annuity sales for the first quarter of 2014 reached $732 million, rising 31 per cent from the $558 million total recorded for the corresponding period last year.
Retail annuity sales had the best performance, increasing 48 per cent from the corresponding period in the previous year. According to Challenger, this was largely driven by strong growth in both fixed term and lifetime annuities.
Life annuity sales were recorded at $119 million, nearly four times the level of sales achieved in the same period last year, while fixed term annuity sales reached $595 million. Life time annuities accounted for 17 per cent of the total retail sales.
Challenger chief executive Brian Benari said he was pleased with the unseasonably strong levels of retail annuity sales.
“The growth in lifetime sales is positive for our business and assists in increasing the tenor of our book, adding significant business value,” said Mr Benari.
Net annuity book growth was $251 million, representing a 3.5 per cent increase in growth, bringing the retail annuity book to a total of $7123 million. Challenger has a growth target of eight per cent for the 2014 financial year, which amounts to $570 million.
There was $10.6 billion worth of assets under management at September 30, down $0.2 billion for the quarter. Challenger said this reduction in life assets under management reflected an institutional mandate outflow. The September 2013 quarter saw an institutional mandate outflow of $540 million.
Funds under management, however, rose 31 per cent for the entire 12-month period and four per cent for the latest quarter. This was predominantly driven by positive investment markets.
Life’s cash operating earnings guidance remain unchanged for the current financial year at a range of between $465 million and $475 million.
