18 Feb 2010

Cost cuts lift AMP result

12:24 pm on 18 February 2010

Cost cuts at the New Zealand arm of AMP helped lift its full year profit, as it faced an increase in insurance lapses.

AMP Financial Services New Zealand made an underlying profit of $77 million for the year to December, an increase of 2% on the previous year.

Operating earnings rose 2% to $68 million, as the insurer and fund manager cut costs by 11%, while life insurance income rose, partly due to rises in premiums.

Managing director, Jack Regan says lowering costs helped as the recession led to people and firms cancelling or failing to pay their insurance cover.

Net cash flows rose 95% to $292 million, mainly due to money flowing from the KiwiSaver workplace savings scheme.

Looking ahead, Mr Regan says he expects to see an increase in earnings. He notes insurance lapses are slowing indicating that the economic stress is easing on New Zealanders.