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
The FSCP has announced its latest verdict, suspending an adviser’s registration for failing to comply with his obligations when providing advice to three clients.
Having sold Madison to Infocus earlier this year, Clime has now set up a new financial advice licensee with eight advisers.
With licensees such as Insignia looking to AI for advice efficiencies, they are being urged to write clear AI policies as soon as possible to prevent a “Wild West” of providers being used by their practices.
Iress has revealed the number of clients per adviser that top advice firms serve, as well as how many client meetings they conduct each week.
