(Corrects underlying earnings percentage fall in headline,
SYDNEY Feb 9 Australia's biggest wealth
manager, AMP Ltd, on Thursday posted a 57 percent fall
in full-year underlying earnings, missing expectations as it
works to turn around its struggling life insurance division.
Despite that, it kept its dividend steady and said it would
return A$500 million ($382 million)to investors through an
on-market share buyback after a reinsurance deal released
AMP reported underlying earnings of A$486 million for the 12
months ended Dec. 31, down from A$1.12 billion a year earlier,
including a A$415 million operating loss in its life insurance
The underlying result was below an average estimate of a 41
percent decline in underlying profit to A$633 million from 15
analysts surveyed by Thomson Reuters I/B/E/S.
On a statutory basis, which includes one-off items, the
company swung to a A$344 million bottom-line loss - its first
loss since 2003 - due to writedowns in its life insurance
business announced to the market in October.
"The year saw strong results from AMP Capital, AMP Bank, New
Zealand and a resilient performance from wealth management
despite challenging market conditions," AMP Chief Executive
Craig Meller said in a statement. "However, these results were
overshadowed by a poor performance in (life insurance)."
Australia's life insurers have seen rising claims rates and
more policy cancellations since Australian media in March last
year revealed the use of discredited methods to refuse
legitimate claims for insurance payouts.
While analysts say the sector's long-term outlook is bright
thanks to an ageing population and Australia's compulsory
pension savings scheme, the AMP result underscores medium-term
risks associated with the life insurance business.
Meller is under pressure from the board to revive the life
insurance division and reverse a slide in market share.
He announced a shake-up of senior management in November as
part of that effort, and last month AMP closed its fledgling
venture capital arm to focus more on its core business.
Despite these concerns, AMP shares have risen 10 percent
since the election of U.S. President Donald Trump in November,
on the expectation that rising bond yields will boost
($1 = 1.3096 Australian dollars)
(Reporting by Jamie Freed; Editing by Kevin Liffey)