(Updates with cost savings plan in fifth paragraph.)
Aug. 15 (Bloomberg) -- AMP Ltd., Australia’s largest life insurer and pension manager, said first-half profit rose 6 percent on higher wealth-management earnings and named the head of its financial services arm as chief executive officer.
Craig Meller, 50, takes over on Jan. 1, replacing Craig Dunn, 49, who retires after six years as CEO. Meller has headed AMP Financial Services since 2007. AMP net income rose to A$393 million ($359 million) in the six months to June 30 from A$373 million in the year earlier period, the Sydney-based company said in a statement today. That compared with the A$322 million median estimate of five analysts surveyed by Bloomberg News.
Underlying profit, which removes merger-related costs and some of the influence of market volatility, fell 10 percent to A$440 million. Rising insurance policy lapses led AMP to warn on June 24 underlying profit might drop to A$415 million to A$435 million. Such lapses had climbed to their highest level in a decade, it said in February.
“Improving the performance of the insurance business is an area of critical focus as we introduce a series of actions to improve both customer retention and the management of claims,” Dunn said in the statement today.
AMP will invest A$320 million over three years as part of a plan to cut annual costs by A$200 million by the end of 2016, it said in today’s statement.
Wealth protection, which includes life insurance, posted a 52 percent drop in first-half profit.
AMP, which is the worst-performing stock in the S&P/ASX200 financial sector index, has dropped 5.6 percent this year compared to an 11 percent gain for the benchmark S&P ASX/200 Index.
--Editors: Iain McDonald, Andreea Papuc