AMP has recorded a slight decrease in annual premiums in-force for its wealth protection arm for the first quarter of 2017, despite posting an increase in wealth management inflows.
In a statement to the ASX, AMP revealed its wealth protection annual premium in-force was down 1 per cent to $1.9 billion.
The small decline was primarily driven by a 1 per cent fall in API for individual lump sum. Q1 2017 claims and lapse experience was positive, with the business performing in line with revised assumptions, financial services company said.
“Q1 claims and lapse experience in Australian wealth protection indicate that the measures we’ve taken to stabilise the performance of the business are working,” AMP chief executive Craig Meller said.
In October 2016, Risk Adviser reported AMP had overhauled its life arm by entering a binding quota share agreement with reinsurer Munich Re.
AMP said wealth management cash inflows increased by 11 per cent to $6.4 billion. However, this result was “more than offset” by a 19 per cent increase in outflows.
“The decline in net cash flows was driven by increased superannuation consolidation across the industry, the migration of default funds to MySuper, fewer corporate super mandate inflows and increased outflows to self-managed super funds,” AMP said.
“Superannuation outflows increased by $278 million (24 per cent) on last year, driven by increased competitor consolidation activity and higher outflows as customers transitioned to MySuper. Higher outflows to SMSFs were driven, in part, by customer preference for residential property investment.”