24 Jun 2013

AMP forecasts lower earnings

9:13 pm on 24 June 2013

AMP is forecasting an earnings downgrade as its Australian financial services insurance business is coming under pressure from volatility in the market.

However the company's New Zealand arm is bucking the trend.

Australia's largest wealth manager is forecasting its underlying profit will fall to between $A415 million and $A435 million for the six months to the end of June.

That's a decline of 11% to 15% compared with the $A491 million of underlying profit the company made in the same period a year ago.

AMP says it has experienced a loss of $32 million in its wealth protection business, the majority of which comes from insurance claims, and $8 million worth of lapses in insurance policies.

About half of insurance claims were from income protection policies.

The company says the industry is experiencing increased pressure on insurance claims and policy lapses but expects future premium rate increases will offset rising income protection claims.

The Australian business says its New Zealand arm's stronger operating results will help offset its lower wealth managements earnings, along with AMP's bank and mature businesses.