AMP NZ half year profit up 4%

By NZPA

Thursday 23rd August 2007

AMP Financial Services NZ said a spike in insurance claims kept first half profit growth to just 4%, well below its Australian parent's 35% increase.

AMP NZ said underlying profit rose 15% to $28.6 million, while net profit rose to just $27 million due to an unusual increase in disability claims.

Life insurance, which makes up about 90% of AMP's New Zealand profit, increased 15%, rising for the 14th consecutive quarter. New business was 5% ahead of 2006, and AMP was beating the market's estimated growth of 10% to 12%.

"We're very happy with the result, it's a good steady result following on with the momentum we had last year," said managing director Greg Camm, who is returning to Melbourne and will be succeeded by Jack Regan in September.

AMP NZ was unable to match the performance of its Australian parent, which has powered ahead as market leader in the superannuation business in Australia.

"For our parent company to be No 1 in the fastest-growing industry in the country is a very good place to be, and that Australian superannuation market is booming," Camm said.

"We're very excited here about Kiwisaver because we see that as being analogous to the Australian situation back in the '80s when a form of compulsory superannuation came in. Given a few years, we could be seeing similar sorts of growth in New Zealand.

"Once we get out of the establishment phase, it should be very good for us."

AMP expected to increase business with the introduction of Kiwisaver, which Camm called "a market of opportunity", as a default provider and with its history as a workplace savings provider.

AMP began enrolling customers on July 1 and expected to start receiving funds from the Inland Revenue Department on October 1.

AMP has also returned to the home loan market through an agreement with Kiwibank, and bought the Roost mortgage franchise in May.

AMP had been offering mortgages as part of financial advice package for years, and customers wanted an AMP mortgage as offered when it had a New Zealand bank.

AMP sold its banking business, principally to HSBC, in 2003, and was not considering a return into banking. It expected mortgage lending to remain a small part of the business, Camm said.

Parent AMP Ltd's first half net profit increased to $A470 million ($NZ548 million), and announced that long-standing chief executive Andrew Mohl will step down.

Its underlying result was 27% higher at $A534 million.

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