AMP’s net profit for the half year fell 15% to $445 million as the financial giant moved to reduce earnings volatility in its life insurance business in a series of reinsurance deals.
Underlying profit was up 4% to $533 million.
The company completed a reinsurance program, releasing $500 million of capital from AMP Life and further reducing the capital intensity of the wealth protection business.
Australian wealth protection earnings increased 11% to $52 million as AMP fights to stabilise the business.
The selling of life insurance has been a staple of AMP since it was formed in 1849 but recently has has been hit by increasing claims across all types of customer and all forms of insurance.
In the 2016, AMP’s wealth protection business posted a loss of $415 million, a big change from the $185 million profit in 2015.
Add to that a $668 million charge for goodwill impairment and the wealth protection has had a drag of more than $1 billion on AMP’s business in just 12 months.
Here’s the latest half-year results by division:
“We’ve made good progress on the delivery of our strategy,” says CEO Craig Meller, releasing the results for the six months to June.
“Overall, it’s a solid performance underpinned by strong cost management that steps us toward our strategy of transitioning to a higher-growth, capital-light business with a more internationally diverse revenue profile.”
AMP declared an interim dividend of 14.5 cents a share, franked at 90%.