AMP's adviser numbers decrease

AMP New Zealand has announced operating earnings of $74 million for the year to December 31, 2010, up 9% on the 2009 figure of $68 million.

Friday, February 18th 2011, 7:24AM 3 Comments

by Benn Bathgate

The company said the increase was achieved through growth in both insurance and wealth management operations, tight cost control and improved customer retention.

AMP also revealed total aligned intermediaries in its AMP Financial Services NZ unit decreased by 39 to 322.

"The decrease was primarily due to the changing regulatory and operating environment and the rationalisation of less successful advisers as AFS NZ focuses on strengthening the quality of its distribution network," the company said.

The AFS NZ unit, principally focused on risk insurance, saw operating earnings rise 7%, or A$4 million, in 2010 to A$58 million.

However, despite the rise profit margins fell 11% due to an increase in lapse rate assumptions on risk products art the end of 2009 and a $3 million impact on the profit share arrangement between AMP and its general insurance provider in the wake of the Christchurch earthquake.

An 8% increase in new life insurance business was reported, and its life insurance customer retention improved 1.7% to 90.1%.

Underlying operating profit from individual risk API was up 4.1% from $145 million in 2009 to $151 million and the lapse rate declined from 11.6% to 9.9%.

AMP NZ managing director Jack Regan said the results reflected a difficult economic climate, with insurance sales slowing across the industry.

"Despite the challenging market we have focused on building a leaner more productive business focused on enhancing products and services for consumers and building strong distribution relationships," said AMP NZ managing director Jack Regan.

AMP also outlined how it would boost growth through the proposed merger with AXA, saying the tie-up would provide, "a broader and deeper distribution footprint, providing multi-brand advice options and improving distribution through IFAs."

Benn Bathgate is a business reporter for ASSET and Good Returns, email story ideas to benn@goodreturns.co.nz

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Comments from our readers

On 18 February 2011 at 8:39 am John said:

To those who currently operate as AMP Advisers I encourage you to open your eyes to what other providers are offering in the marketplace. You owe it to yourselves and your clients.

On 18 February 2011 at 12:46 pm Alastar said:

Regan seems blind to what is happening in the lower echelons of AMP at the moment. All of the other life providers listen and engage with advisers regularly but AMP still seem to think their products are “top shelf” when in fact they are now simply offering prospective clients the “house wine”. If AMP don’t get their act together they will continue to lose advisers and clients alike.

On 18 February 2011 at 3:42 pm Anon2 said:

I think the point is they got rid of low producing time wasters and increased profit. Regan doesn't care about the lower echelons as AMP does not need to. Insurance advisers are deluded if they think insurers care about them at the lower level - they just look to increase business elsewhere