AMP Limited today reported cashflows and assets under management (AUM) and an update on its Australian wealth protection business for the third quarter to 30 September 2014.
AMP Chief Executive Craig Meller said: “This continues our solid momentum across the business. Our current range of products are performing well, the focus on Asia continues to deliver results and the performance of our insurance business is in line with guidance”.
Australian Wealth Management net cashflows for the quarter were $476 million, more than doubling flows in Q3 13 of $206 million. Total AUM was $105.2 billion, up from $103.8 billion at the end of Q2 14, reflecting stronger net cashflows and positive investment returns over the quarter. Average AUM increased by 2.6 per cent over the same period.
AMP’s leading wrap platform North recorded its highest ever quarterly net cashflow of $1.5 billion in Q3 14, the sixth consecutive quarter of net cashflows of $1 billion or more. Fifty seven per cent of North’s cashflows were externally sourced.
North exhibited particular strength in attracting retirement income account flows which contributed $951 million to net cashflows for Q3 14. Customers also continued to be attracted to North’s innovative guaranteed options which accounted for approximately 8 per cent of net cashflows in the third quarter. North AUM grew to $13.8 billion at the end of the quarter, up from $12.2 billion at the end of Q2 14.
AMP Flexible Super recorded net cashflows of $500 million in Q3 14. The 12 per cent growth in AMP Flexible Super net cashflows was largely externally driven reflecting higher contributions from new members with strong flows into retirement income accounts. AUM increased bY 6.3 per cent over the quarter to $11.9 billion, up from $11.2 billion at the end of Q2 14.
Corporate superannuation net cash inflows were $16 million in Q3 14 compared to a net cash outflow of $52 million for Q3 13 (Q3 13 included a mandate loss of $60 million).
External platform net cash outflows were $311 million in Q3 14 compared to a net cash outflow of $233 million in Q3 13. A significant proportion of the increased net cash outflows from external platforms was captured by North in the third quarter.
AMP SMSF assets under administration were $18.5 billion at the end of Q3 14, an increase of $572 million from Q2 14. At the end of Q3 14 AMP SMSF had 15,491 member accounts under administration (including SuperIQ) up from 15,173 at the end of Q2 14.
AMP Capital had net cash outflows for Q3 14 of $236 million, comprising external net cash inflows of $726 million for the quarter and internal net cash outflows of $961 million.
AMP’s strategic partnership with MUTB in Japan delivered strong flows during the quarter as did other distribution partnerships in Japan across a number of asset classes. The China Life AMP Asset Management Company also contributed to the external net cash inflows for the third quarter and the joint venture now has four products available for Chinese investors. A number of large external mandate wins domestically were largely offset by a single large redemption. Internal outflows relate mainly to the ongoing run-off of mature products closed to new business. Q3 internal outflows were also negatively impacted by transitions of platform sourced cash to be managed by AMP Bank and outflows due to product restructures in New Zealand financial services.
AMP Capital AUM at the end of Q3 14 was $145.4 billion up 0.7 per cent from $144.4 billion at the end of Q2 14. Over the same period, average AUM increased 1.7 per cent.
AMP New Zealand Financial Services’ net cashflows improved to A$105 million in Q3 14, from A$65 million in Q3 13 with growth in cashflows into its KiwiSaver offering and other net cashflows benefitting from advisers transitioning customers onto AMP platforms.
AMP’s mature net outflows in Q3 14 were $456 million, compared to a net outflow of $440 million in Q3 13.
AMP Bank’s mortgage book increased 1.4 per cent to $14.2 billion at the end of Q3 14 from $14.0 billion at Q2 14. In Q3 14, the AMP aligned adviser channel contributed 26 per cent of AMP Bank’s mortgage new business, up from 23 per cent at 1H 14. Over the year, AMP management targets lending growth above system growth, subject to funding availability and return targets. The deposit book was $9.1 billion, up 2.2 percent in Q3 14 from $8.9 billion at the end of Q2 14.
Australian wealth protection annual premium in-force grew by 6.2 per cent in Q3 14 to $1.935 billion compared to $1.821 billion in Q2 14. Growth in API was primarily driven by a 4.6 per cent increase in individual lump sum insurance and a 16.6 per cent increase in group risk insurance as a result of premium rate increases.
Business update on Australian wealth protection business
During Q3 14, lapse experience across AMP’s insurance business was in line with best estimate assumptions and claims experience continued to perform ahead of best estimate assumptions. The best estimate assumptions outlined at AMP’s FY13 results announcement remain unchanged.
