Challenger announces new annuity relationships
Challenger has announced two new key annuity relationships, with the firm now providing AMP with annuity products through its investment and administration platforms, and providing Mitsui Sumitomo Primary Life Insurance Company (MS Primary) with Australian dollar fixed rate annuities.
Challenger would provide its term annuities, Liquid Lifetime and CarePlus products via AMP's North, MyNorth and AMP Flexible Super platforms to AMP retail customers, and to their corporate superannuation clients via the SignatureSuper platform.
The relationships would allow AMP's advisers and clients to invest directly in annuities through the platforms, and would launch in the quarter ending 30 September, 2017.
Challenger chief executive, Brian Benari, said Challenger would also make available its retirement income tools and calculators.
"It is further evidence of how progressive superannuation industry participants are moving ahead of expected retirement income regulatory reforms as they meet the needs of customers moving into retirement," he said, adding AMP operated Australia's largest retail adviser network, with over 3,700 advisers.
Under Challenger's relationship with Australian dollar annuity and life insurance product provider in Japan, MS Primary, the firm would issue Australian dollar fixed rate annuities with a 20-year term to support a reinsurance agreement with MS Primary.
"Challenger will provide a guaranteed interest rate and assume the investment risk initially on half of each new policy issued by MS Primary," the firm said, adding the guaranteed interest rate on new business could change as per market conditions.
Customers could choose an annuity payment period of five, 10, or 20 years, with a benefit payable upon death. With the product being an Australian dollar product, Challenger said it would accept no foreign currency risk.
The annuity portfolio would be invested in the same asset classes as Challenger's current portfolio and would be accounted for under Challenger's normalised profit framework, consistent with the Life business, the firm said.
AUTHOR
Malavika Santhebennur
Recommended for you
A financial advice firm has been penalised $11 million in the Federal Court for providing ‘cookie cutter advice’ to its clients and breaching conflicted remuneration rules.
Insignia Financial has experienced total quarterly net outflows of $1.8 billion as a result of client rebalancing, while its multi-asset flows halved from the prior quarter.
Prime Financial is looking to shed its “sleeping giant” reputation with larger M&A transactions going forward, having agreed to acquire research firm Lincoln Indicators.
An affiliate of Pinnacle Investment Management has expanded its reach with a London office as the fund manager seeks to grow its overseas distribution into the UK and Europe.
