AMP Paid Far More Income Protection Insurance Claims Than It Expected This Year

Sick leave: Shutterstock

AMP expects to post lower-than-usual 1H13 earnings after losing $13 million to income protection insurance claims in the five months to 31 May.

AMP pays income protection insurance customers up to 75% of their regular income when they are too sick or injured to work.

The company has not revealed whether its high income protection insurance costs – particularly in April and May – were because there were more people becoming too unwell to work, or because there were fewer people returning to work.

Income protection insurance costs typically rise in tough economic times, as people take longer to return to work.

AMP expects to post a profit of $415 million to $435 million for the six months to 30 June, down from $464 million in the 2H12 and $491 million in 1H12.

Shares opened 7.8% lower this morning at $4.59.

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