16 Aug 2012

AMP half year profit falls

1:36 pm on 16 August 2012

AMP's New Zealand arm has reported a lower half year profit, which it blames on a challenging economic environment and higher costs.

AMP Financial Services New Zealand made an operating profit of $49 million for the six months to June, a decrease of 13% compared with the previous half year.

The insurer and fund manager bought AXA last year.

Insurance income rose 1% to $292 million, due to higher premiums, while costs rose 5%.

AMP says the percentage of people letting insurance policies lapse held steady at 10%, much lower than the industry average.

Funds under management remained flat at $11.9 billion but AMP says it enjoyed strong growth in KiwiSaver funds, holding 18.4% of the workplace savings scheme market.

Net cash flows fell to $68 million, and AMP warns that reflects a reluctance among people to insure themselves, or invest, any more than they need to.

Meanwhile, parent company AMP reported an 8% improvement in its underlying profit to $A491 million and says integration of AXA is ahead of schedule.

AMP declared a dividend of 12.5 cents a share.