Challenger achieves 'record' life sales

Challenger achieves ‘record’ life sales

20 February 2023

Challenger’s key life business – its biggest division by earnings – posted “record” sales of $5.5 billion in the December half, up 11% from a year earlier.

The diversified investment group says the division’s results were driven by annuity sales, which rose 41% to an all-time high of $3.5 billion.

“Retail annuity sales are benefitting from the higher interest rate environment, which has improved the customer proposition and attracted new advisers and customers,” Challenger said.

The life division grew its normalised earnings before interest and taxes (EBIT) to $263.3 million from $233 million a year earlier.

Its fund management division booked normalised EBIT of $30.7 million, down from $45.1 million and the corporate division chalked up a bigger loss of $37.3 million from $35.4 million.

Challenger Bank widened its normalised EBIT loss to $4.3 million from $3.3 million. The bank is about to be sold to New Zealand’s Heartland Group for $36 million, pending regulatory approval after the deal was announced last October.

“The Bank sale follows the completion of a strategic review announced in August 2022, which concluded a sale was the best option for Challenge,” the business said.

Overall, Challenger reported normalised EBIT of $252.4 million, up from $239.4 million a year earlier.

Normalised net profit before tax was up 5% to $250 million, with the higher earnings driven partly by strong life book growth.

Challenger says it is affirming its full-year guidance for normalised net profit before tax of between $485 million and $535 million.