Workplace savings help to lift AMP earnings 11pc

Greg Camm

AMP Financial Services NZ's annual profit in 2005 rose 11 per cent to $58.8 million, driven by life insurance and workplace savings growth.

Its parent, AMP, said yesterday it would return A$750 million ($829 million) to shareholders and has flagged another capital return next year after announcing a 7.3 per cent fall in net profit to A$809 million for 2005. Taking out investment income, AMP's underlying profit was up 24 per cent to A$801 million.

In New Zealand, annual premium income on life insurance rose 15 per cent.

Managing director Greg Camm said the result was built on AMP's premier position in the workplace savings market, record life insurance sales and the best customer retention rate in the industry.

AMP's life insurance business had a solid performance, reaching the second largest market share based on total premium income, which climbed 15 per cent to $90 million - significantly outperforming market growth of 11.5 per cent.

AMP has increased its market share in life insurance for eight consecutive quarters, driven by a 17 per cent increase in new sales in 2005.

Its customer retention rate is 94 per cent against the 88 per cent industry average.

In the workplace savings market, Camm said AMP remained the industry leader with an increased market share of 28 per cent, up from 25 per cent.

Assets under management climbed 18 per cent to $867 million.

Camm said AMP was encouraged by the increasing interest in workplace savings from employers who were offering this as an incentive in a tight labour market.

"Given that we are the only OECD country that does not provide some form of incentive or compulsion for retirement savings, we welcome the Government's proposed KiwiSaver retirement savings scheme, which many are predicting will stimulate future savings and investment market growth."

- NZPA