AMP Wealth's quarterly cash flow drops 39%
AMP's wealth management arm's net cash flow declined nearly 39 per cent to $209 million for the first quarter to 31 March 2016, with the wealth manager pointing to a combination of weak investor confidence, market volatility and increased regulation as being behind the drop.
Total assets under management (AUM) was $112.6 billion as at 31 March 2016, down 3 per cent from $116.1 billion at the end of Q1 2015.
AMP chief executive Craig Meller said this downward movement was reflective of negative investment market movements during the quarter.
"Domestic and global investment market conditions continued to be challenging during the first quarter, subduing cash flows across our business. Ongoing claims volatility continues to be a feature in Australian wealth protection. Despite these challenges we remain confident in the overall long-term outlook for AMP," Mr Meller said.
AMP's North platform saw its net cash flow drop 11 per cent from the previous corresponding period to $820 million. The platform's AUM grew to $21.2 billion at the end of the quarter, up 19 per cent from $17.8 billion at the end of Q1 2015.
"While North inflows rose 9 per cent from Q1 15, this was offset by a 25 per cent rise in outflows, reflecting strong pension-driven AUM growth. Approximately 70 per cent of cash outflows were internal transfers, largely within the North platform," AMP said in a statement.
At the same time AMP chairman Simon McKeon will formally depart at the end of the meeting with the position to be replaced on an interim basis by John Palmer.
External platform net cash outflows were $174 million in Q1 2016 compared to a net cash outflow of $296 million in Q1 2015.
At the same time, AMP's Australian wealth protection annual premium in-force (API) was down 1 per cent in Q1 2016 to $1,943 million compared to $1,958 million in Q4 2015.
For the first quarter of 2016, the Australian wealth protection business was impacted by claims experience losses of $18 million, with the majority of the losses being in retail income protection across both incidence and termination.
"While we continue to monitor insurance experience closely, it has not caused us to alter our best estimate assumptions at the present time," the statement said.
"AMP is continuing to actively review capital efficiency initiatives and is well down the path with plans to legally consolidate its two life insurance businesses, although timing is dependent on regulatory approvals. Re-insurance remains a priority," Mr Meller said.
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