AMP chief executive Craig Dunn says the personal insurance market is tough in both Australia and New Zealand.
Mr Dunn told the company's annual shareholders' meeting the Australian industry is suffering from poor policy lapse and claims experience across the board and industry lapse rates are at a 10 year high.
He said a tough personal insurance market constrained AMP's profits in both Australia and New Zealand.
Mr Dunn said tough economic times mean more people are deciding to reduce their insurance cover or cancel their policies altogether.
He said the cost of some insurance claims also tends to increase in tougher economic times as it takes longer to get some people back to work.
Mr Dunn said although some of the changes in the insurance business are cyclical the company is taking action to improve customer retention and to better manage its claims experience.
"These actions include targeted pricing reviews and product redesign, increased investment in customer retention activities and better claims management, by example for helping people get back to work sooner."
Mr Dunn says he expects the business environment to remain challenging in the current year, although investor sentiment is improving in both Australia and internationally.
AMP says its New Zealand cash flows more than halved to $A20 million in the first three months of this year compared with the December quarter last year.
AMP says they were affected by large numbers of over 65-year-olds withdrawing money from their KiwiSaver funds, after the initial five year lock in period came to an end.
Its assets under management in New Zealand rose 1% to $A10.4 billion with KiwiSaver funds, which rose 6.9% in the quarter, now accounting for nearly 20% of the total.