KEY POINTS:
Compulsory superannuation contributions funded by tax cuts look to be a "logical next step", the boss of AMP Financial Services New Zealand says.
The company today reported an underlying profit after tax for the year ended December 31 of $66 million, up 12 per cent from $59 million in 2005.
Its Australian parent, AMP Ltd, reported an 11 per cent rise in underlying profit to A$893 million ($1.02 billion) for the year.
AMP Financial Services NZ managing director Greg Camm said the Australian results had benefited from a strong investment market on the back of compulsory superannuation.
New Zealand did not have the environment to deliver the same kind of superannuation growth year on year.
It had been the only country in the western world without tax incentives or compulsion for retirement savings.
But with the advent of the Government's KiwiSaver scheme from July 2007, more New Zealanders would be encouraged to save for their retirement, Mr Camm said.
"A move towards compulsory superannuation seems almost inevitable. Compulsory contributions funded by tax cuts look to be the logical next step."
AMP has been invited to be one of six default providers for the KiwiSaver scheme.
It also announced today it was to re-enter the home loan market and provide AMP-branded lending options through a partnership with Kiwibank.
The New Zealand company said it achieved 16 per cent growth in annual premium income for its life insurance arm, driven by a 31 per cent increase in year-on-year new sales and market-leading customer loyalty levels.
Market share increased for the 12th consecutive quarter.
Return on equity increased from 27.6 per cent to 30.5 per cent.
Mr Camm said the company had invested heavily in its brand in the past year, with the launch of a high profile advertising campaign.
Visibility would increase further when it moved to its new home in central Auckland.
- NZPA
