MP NZ full year results: operating earnings up 4.6% to $120m

MP NZ full year results: operating earnings up 4.6% to $120m

Leading life insurer and retirement savings provider, AMP Financial Services New Zealand (AMP) has today announced operating earnings of NZ$120.2 million for the full-year to 31 December 2014. This is an increase of 4.6% from the same time last year and has been driven by growth in AUM, lower controllable costs and improved experience profits.

The business recorded net cashflow growth of 212% from NZ$94 million in FY 13 to $293.4 million. As indicated at the 1H 14 announcement, this was bolstered by an increase in KiwiSaver flows as well as the transfer of new advisers and their clients on to AMP’s financial services’ platforms.

AUM increased by 7.3% ($0.9 billion) from 2013 with the key driver continuing to be KiwiSaver, with an AUM growth of 20% ($0.6 billion) over the same period.

AMP’s KiwiSaver scheme was selected as a default provider for a further seven years. We were again awarded a Silver Analyst Rating from Morningstar, and for the second year running our Default Fund was awarded a five-star ‘outstanding value’ rating in the CANSTAR Star Ratings. It was also awarded a Platinum rating from SuperRatings for providing value for money for customers. As the only New Zealand provider to achieve all three awards we are proud of the strong external recognition and endorsement of our KiwiSaver Scheme and the solutions we provide to our customers.

Jack Regan, Managing Director of AMP New Zealand says: “In an environment of significant competition and increasing regulation, our disciplined approach to meeting the objectives we set for the business has again seen us achieve a strong full-year result for shareholders. The result builds on the momentum created by the successful implementation of our strategic agenda, with growth underpinned by a significant increase in net cashflows, a continued focus on controllable costs and growth in profit margins.”

Controllable costs for the full-year fell to $94.5 million (down from $102.3 million for the FY 13) a decrease of $8 million.

“FY 14 controllable costs decreased by NZ$8 million (8%) from FY 13, reflecting the focus on cost controls including rationalisation of duplicate wealth management products and reduced employment costs. Further evidence is the improvement in the cost to income ratio which fell to 32.6% (down from 35.9% for FY 13),” points out Regan.

The business realised experience profits of NZ$2.9 million, an uplift from FY 13 which saw experience losses of $1.1 million, primarily reflecting an improvement in claims management and strong success in helping customers return to work.

Total annual premium income (API) increased marginally which reflects the challenging conditions evident in the marketplace and subdued business sales. This is consistent with results seen across the country.

The business continues to focus on its strategic growth agenda, opportunities to leverage the scale of the wider group and further build on its partnerships with advisers and workplaces across New Zealand.

Outlook for the business continues to remain positive, however we acknowledge the impact of the new solvency standards and the loss of transitional tax relief which comes into effect for all life insurance companies in New Zealand on 1 July 2015.

“In 2014, the New Zealand business achieved a solid result which is testimony to the hard work of our people across the country. A major highlight for us was being the most awarded KiwiSaver provider in New Zealand and we look forward to providing our customers with the same high level of service they received in the last year. We are now focused on achieving a strong result for the 2015 year and embedding our new strategy across the business,” concludes Regan.

2014 Key Highlights

We announced a free accidental death benefit (to a maximum of $100,000) for existing AMP KiwiSaver Scheme members and new members who join the AMP KiwiSaver Scheme before the end of 2014. In December we helped the first grieving family by making a lump sum payment to the deceased’s estate matching the amount in their KiwiSaver account at the date of their accident.

The business made positive strides on the journey of achieving claims excellence. We focused on building claims capacity and capability, and piloted new approaches to managing claims. Results are encouraging with more than 115 customers assisted to return to work through active rehabilitation, which in turn has resulted in improved claims profitability.

We processed the final payment of $19.1 million, plus an additional $2.37 million in interest, to bond holders invested in the ‘frozen’ fund Mortgage Backed Bonds Limited (MBBL).

AdviceFirst, part of the AMP Group of Companies, undertook a number of business acquisitions and transactions including: acquiring Wellington based insurance broker, Wells Everett Wynn – a brokerage focusing on General and Life Insurance; entering into a Memorandum of Understanding to manage Roost Mortgage Brokers on behalf of AMP and acquiring the business assets of Goldridge Wealth Management, one of New Zealand’s leading wealth management groups.

Our new customer-centricity programme provided a deeper understanding of who our customers are. We invested in customer analytics, implemented a Net Promoter Score, completed ethnographic research projects which have better informed our customer experience design for KiwiSaver, first home buyers and wealth protection, and piloted a “voice of the customer” system.

We delivered employee programmes focused on providing the tools and confidence to support our customer-centred strategy. The Mary Gober ‘Own It’ programme was attended by more than 80% of our employees and provided skills and techniques to enable positive conversations. Our internal ‘Igniting Our Spark’ workshops, attended by all employees, focused on our internal strategy and culture.

ENDS

© Scoop Media