Challenger Financial $149m Profit up 17% 1H2013

Submitted by Share Trading on 6 March, 2013 - 08:59

Financial services company and Australia's largest annuities provider Challenger Limited (ASX:CGF) have announced its half year financial results for 2013 to its shareholders and investors on the Australian stockmarket.

  • Challenger Financial have announced a normalised Net Profit after tax (NPAT) of $149 million, up 17 percent. Challenger also announced a statutory NPAT of $222 million, up from $20 million.
  • As a result of an aging population, there was a 55 percent uplift in sales for annuities and life products to $1.98 billion, and the value of funds under management (FUM) was up to $38.3 billion,
  • Challenger CEO Brian Benari said, "The Care Annuity is the fastest growing annuity product in Challenger's history and with around 58,000 people moving into Aged Care in 2011 alone this represents a large, fast-growing and under-served market. Ours is a unique product available over all major platforms in the industry that has no competitors."
  • Challenger Life increased its assets under management to $10.2 billion.
  • Benari said, "Most pleasingly, the tenor of new retail annuity sales has continued to lengthen, this time from 5.4 years in
    2012 to 6.2 years this half. Only three years ago the average tenor of new sales was 4.2 years so we are very happy with our progress in this regard. Improving the mix of new sales to favour longer-tenor product delivers extended revenue streams, enables investment in longer dated assets which earn an illiquidity premium and is more efficient to distribute and administer. The lengthening of the annuities book has been achieved through a range of distribution, product and marketing initiatives, aimed at addressing retirees demand for longer dated products. This has been driven by the growing realisation of extended longevity. These days people in their 60s are caring for parents in their 80s and 90s, which really drives home the need to make their savings last as long as they do. The only way to guarantee lifetime income is with longevity insurance, hence the strong sales of our innovative Liquid Lifetime and Care lifetime annuities. In fact, Challenger looks set to sell more lifetime annuities in 2013 than the entire industry has in any year since
  • Challenger Financial have announced an interim dividend of 9.5 cents per share up from 7.5 cents per share

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