AMP Results Prompt Insurance, Advice Initiatives

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AMP has announced it will implement a series of measures across its insurance and advice businesses, with the aim of improving customer retention and delivering quality financial advice.

AMP CEO, Craig Meller
AMP CEO, Craig Meller

The initiatives were flagged alongside AMP’s half yearly profit results, which showed the group had achieved a turnaround on previous periods. AMP achieved a 16% rise in underlying profit for the first half of 2014, reaching $510 million in the six months to 30 June, and recorded double digit growth in operating earnings for all its open businesses. Net profit was $382 million, down slightly on the same period in 2013.

The group’s wealth protection business achieved operating earnings of $91 million for the half, up from $64 million in 2013. Individual risk inflows were $358 million, against outflows of -$140 million. Group risk cashflows were similarly ‘in the black’, with inflows of $108 million offset against outflows of -$64 million. Total inforce business was $1.821 billion.

“Improving the performance of the insurance business remains a key area of focus as we introduce a series of actions to improve the management of claims and customer retention in order to deliver benefits to both our customers and shareholders,” AMP CEO, Craig Meller, said, adding that the group’s claims and lapse experience was broadly in line with best estimate assumptions.

Mr Meller said that while AMP had made good progress on its strategy to be a leaner, more efficient and increasingly customer-driven organisation, further initiatives would be undertaken to address the issues faced by its insurance business. These include:

  • Improved customer retention campaigns
  • Additional resources to handle customer claims more effectively
  • Return to work initiatives to help reduce income protection claims durations

AMP also announced it will introduce a customer review panel to address advice complaints.

The AMP Customer Advice Review Panel will be established by the end of 2014. If an AMP advice customer makes a complaint about the advice they have received, and is not satisfied with AMP’s response, they will be able to escalate the complaint to the Customer Advice Review Panel.

The panel will be chaired by an independent representative and include a qualified advice professional and AMP’s Chief Customer Officer, Paul Sainsbury.

If the panel finds the personal advice was not appropriate when it was given, the customer will be restored to the position they would have been in if the appropriate advice had been given. The panel will also have the power to refund advice fees and compensate for losses.

This is a critical time for the industry

AMP Group Executive Advice and Banking, Rob Caprioli, said that as the largest advice network in Australia, AMP was keen to lead the way for the industry to help restore confidence and trust in financial advisers and the advice they give.

“This is a critical time for the industry and the measures we’ve announced today go to the heart of what we do – offering financial advice to help people live better lives. This commitment builds on our record of significant investment in the standards of professionalism for our financial advisers,” he said.

“AMP stands behind the advice its advisers give to customers. That’s the benefit of seeking advice from an adviser backed by a large and trusted brand like AMP. We can make things right for those customers who don’t receive advice that’s in their best interests. The announcement today takes this commitment a step further.”

AMP also gave its support for an enhanced, industry-wide adviser registry, to be developed by ASIC. When the ASIC adviser registry is finalised, AMP has advised it will make the register available via its company website.

New education standards for advisers operating within the AMP network have also been announced. Click here for more.