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AMP profits hit by life insurance 'challenges'

Despite reporting $672 million net profit for the year to December 2013, AMP Limited is still suffering the effects of “challenges” in the life and risk markets.

In a statement released this morning, AMP announced it had experienced strong growth in “Wealth Management, AMP Bank, Mature and New Zealand” but that these contributors to the net and underlying profit were “offset by the challenging life insurance environment and a decline in investment income on shareholder funds.”

The statement revealed that “[AMP Financial Services'] value of risk new business was $116 million, compared with $203 million for FY2012, reflecting the challenging life insurance environment”.

AMP chief executive Craig Meller said the firm has been undertaking global-looking research to help consider how to overcome these challenges.

“As market leader, AMP has the scale, capacity and executional capability to continue to deliver quality life insurance products that provide Australians with much needed security in a market that is changing,” Mr Meller said.

“We play an important role in helping people understand the fundamental difference life insurance can make in the lives of Australians,” he added.

Meanwhile, the statement pointed to strong “sales momentum” in the wealth management business, with cash flows to the North platform doubling over the relevant period.