AMP reports financial results post merger with AXA

AMP Financial Services New Zealand reported its financial results for the six months
(1H11) and AXA New Zealand’s for the period 31 March 2011 to 30 June 2011,
following its merger with AXA’s New Zealand business, which came into effect on 30
March 2011.

AMP results 1H11

AMP Financial Services New Zealand reported an operating profit of NZ$28 million
for the six months to 30 June 2011, down 32 per cent on NZ$41 million in the same
period last year.

Experience for the first half 2010 included an NZ$7 million one off gain from lower
corporate tax rates. The comparable period this year was affected by the
Christchurch earthquake, assumption and modelling changes, higher costs and
experience losses.

Operating expenses increased 13 per cent to NZ$35 million, driven by higher
marketing, employment and IT costs. Operating expenses were also impacted by
additional costs to support advisers in the Christchurch region.

The business recorded a 3 per cent increase in risk annual premium income. Net
cash flows increased 4 per cent, driven by strong cash flows into KiwiSaver, which
were offset by a soft retail investment market. AMP KiwiSaver funds under
management reached NZ$1 billion during the first half of 2011.

The life insurance persistency rate or customer retention rate, an important measure
of customer satisfaction and profitability, improved 0.8 per cent to 90.7 per cent.

AXA results 31 March 2011 to 30 June 2011

AXA New Zealand recorded a profit for the quarter since merger of NZ$15 million.
This included non-recurring gains when AMP and AXA aligned assumptions.

Positive claims experience and lower amortisation and project costs also
underpinned the profit.

Integration

AMP Financial Services New Zealand Managing Director, Jack Regan said the new
business concentrated on integrating and building on the combined strength of the
two businesses.

“Bringing the two businesses together creates a New Zealand wealth management
company with even greater capacity to respond to the changing consumer, regulatory
and competitive environment.

“AMP leads the market in retail wealth management and is the second largest in the
wealth protection market. AMP also has more than NZ $1.6 billion in KiwiSaver AUM.
The increased scale of the business allows greater investment in developing
products and services to ensure we continue to meet the needs of customers and
advisers.

“We are well advanced with integration planning and implementation including
completing all appointments to the senior executive team. Good progress is being
made in appointing teams and implementing change with minimum disruption to
customers and advisers.

“At the same time we’ve responded quickly and effectively to regulatory change and
actively supported aligned advisers into the newly regulated environment.

“We are well positioned to build a strong market-facing, customer focused business
with quality financial advice at its heart,” said Mr Regan.