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AMP, the dual-listed financial services firm, expects first-half earnings to fall by as much as 16 percent after its Australian wealth protection business struggled in the second quarter.
The Sydney-based firm anticipates underlying profit of between A$415 million and A$435 million in the six months ending June 30, from A$491 million a year earlier, the company said in a statement. Poor claims and lapse experience in its Australian wealth protection unit was the major factor in the weaker earnings, with experience losses of A$32 million in the five months ended May 31, of which half came from income protection, it said.
“This reflects the ongoing volatile nature of experience across AMP’s insurance portfolio, which has in-force premiums of more than A$1.7 billion,” the company said. “The industry is experiencing increased pressure on insurance claims and policy lapses.”
AMP boosted annual underlying profit 5.1 percent last year on the strength of its wealth management unit.
The rest of its business is in line with market expectations, with stronger operating results in its bank, mature and New Zealand businesses in the five months to May 31, it said.
The shares were unchanged at $5.85 on the NZX, having shed 3.3 percent this year. The stock closed at A$4.98 on the ASX last week, and has gained 3.5 percent on the Australian bourse this year.