AMP Limited today reported cashflows and assets under management (AUM) and an update on its Wealth Protection business for the first quarter to 31 March 2014.
AMP’s Q1 14 cashflow reporting has been more closely aligned to the business structure which came into effect on 1 January 2014 under new AMP CEO Craig Meller. This update also includes AMP Capital’s quarterly cashflows.
AMP Chief Executive Craig Meller said: “This is a solid result for the overall business. Our contemporary products continue to perform well, our focus on Asia is starting to deliver results and the performance of our insurance business is in line with guidance.”
AMP Wealth Management net cashflows for the quarter were $363 million, up 72 per cent from $211 million in Q1 13. Total AUM was $101.1 billion, up from $100.5 billion at the end of Q4 2013, reflecting relatively benign investment markets over the quarter.
AMP’s North platform was a key growth driver with $1 billion in net cashflows for the quarter, the fourth consecutive quarter of net cashflows of $1 billion or more. Over 60 per cent of North’s net cashflows were externally sourced.
The North platform had particular success in attracting flows from the post retirement segment and discretionary investment inflows. Approximately 10 per cent of flows were directed towards North’s innovative capital guaranteed product.
North AUM grew to $10.7 billion at the end of the quarter up 11.5 per cent from $9.6 billion at the end of Q4 13. Also during the quarter, AMP successfully migrated a number of legacy platforms onto North’s contemporary technology and AUM on this technology is now $24.9 billion.
AMP Flexible Super, AMP’s other contemporary retail superannuation and pension product, attracted net cashflows over Q1 14 of $387 million. AUM increased by 4.6 per cent over the quarter to $10.5 billion, up from $10.0 billion at the end of Q4 13.
Corporate superannuation net cashflows were $5 million in Q1 14 compared to $92 million for Q1 13 mainly due to a mandate loss and increased outflows from other corporate superannuation products closed to new mandates.
During Q1 14, AMP’s corporate superannuation business successfully tendered for nine new SME mandates which will benefit future quarters as they transition.
AMP SMSF assets under administration were $17.3 billion at the end of Q1 14, an increase of $741 million from Q4 13. At the end of Q1 14, AMP SMSF had approximately 14,900 member accounts under administration (including SuperIQ).
AMP Capital had net cashflows for Q1 14 of $338 million, comprising external net cash inflows of $802 million for the quarter and internal net cash outflows of $464 million. AMP’s strategic partnerships with China Life, and MUTB in Japan, were the primary drivers of external net cash inflows via the fixed income asset class as well as net mandate wins over the quarter, particularly for AMP Capital’s direct property capability. Internal outflows relate mainly to the ongoing run-off of mature products closed to new business.
The China Life AMP Money Market Fund was the top new product launched in China in terms of funds raised in Q1 14. The fund raised over $2.2 billion during Q1 14, with AMP Capital’s 15 per cent share reported in both cashflows and AUM. AMP Capital’s partnership with MUTB delivered net flows of over $300 million across both retail and institutional clients.
AMP Capital AUM at the end of Q1 14 was $142.2 billion up 1.4 per cent from $140.2 billion at the end of Q4 13.
AMP New Zealand Financial Services’ net cashflows significantly improved to A$59 million, compared to A$20 million in Q1 13 with continued strong uptake of its award winning KiwiSaver offering. AMP New Zealand was reselected as a KiwiSaver default provider in the quarter.
AMP’s mature net outflows in Q1 14 were $374 million, an improvement on a net outflow of$439 million on Q1 13, mainly due to higher transfers of inactive accounts to the Australian Tax Office in Q1 13, which did not repeat in this quarter.
AMP Bank’s mortgage book increased 3.2 per cent relative to Q4 13 to $13.7 billion as strong take-up of its competitive mortgage products continued. The deposit book was $9.1 billion, up 4 per cent on Q4 13.
AMP wealth protection annual premium income was relatively stable at $1.807 billion at the end of Q1 14 compared to $1.814 billion in Q4 13.
Business update on AMP’s Wealth Protection business
During Q1 14, the value of claims and lapses across AMP’s insurance business was broadly in line with the best estimate assumptions outlined at AMP’s FY13 results announcement.
As stated at that time, the revised best estimate assumptions anticipate FY 14 claims will be broadly in line with FY 13 experience while expecting lapses to worsen by around 1 percentage point in FY 14 before management actions take effect.
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