AMP Declines Most in Three Years on Insurance Claims Losses

AMP Declines Most in Three Years on Insurance Claims Losses

AMP Declines Most in Three Years on Insurance Claims Losses AMP Ltd., an Australian fund manager and insurer, declined the most in almost three years as it reported higher-than-expected insurance claim losses and said March quarter wealth management cash flows dropped.

Shares in the Sydney-based firm fell 6.8 percent to A$5.44 at 11:59 am in Sydney compared with a 0.5 percent decline for the benchmark S&P/ASX 200 index. AMP’s decline is its worst since June 2013 and the stock is trading at its lowest level in a month.

AMP reported wealth management net cashflows of A$209 million ($153 million) in the first quarter, down from A$342 million a year earlier amid weaker investment confidence and market volatility, according to a regulatory statement. The wealth protection business experienced insurance losses of A$18 million, it said.

UBS Group AG analysts led by James Coghill cut the company to neutral from buy and reduced their 12-month share price target to A$5.50 from A$6.30.

While lower cash flows were expected, “the re-emergence of quite significant losses in wealth protection is however a more concerning feature,” the analysts said. “The absence of any meaningful losses from major bank competitors in recent weeks indicates higher incidence levels could be an AMP-specific problem.”

(Bloomberg)