Funds under management for the quarter grew by two per cent or $0.7 billion with the $1 billion increase in funds for Fidante Partners offset by the $0.3 billion decline for Challenger Investment Partners.
Fidante Partners recorded a 31 per cent increase for the 12 months leading to 31 March 2014, with funds rising $34.7 billion.
Challenger Life annuity sales for the first quarter were $496 million, an increase of 29 per cent from the previous corresponding period.
Retail annuity sales were $478 million, an increase of 35 per cent compared with the same period last year.
Liquid lifetime and care annuity (lifetime) sales for the quarter doubled from the previous corresponding quarter, jumping to $143 million.
Challenger said this is significant given that annuities are no longer asset test exempt.
“The spike in sales is a testament to the product innovation of lifetime annuities and the revival of the Australian market,” said Challenger.
“Challenger is the dominant annuity provider, with well in excess of half the market.”
Challenger chief executive Brian Benari said lifetime annuity sales now account for 30 per cent of total retail annuity sales, up from 20 per cent last quarter.
Mr Benari said retail annuity sales continue to be driven by product innovation and the growing number of baby boomer retirees.
“In what is seasonally our quietest sales period we have maintained sales momentum and have further increased the share of retirement savings allocated to guaranteed income products,” said Mr Benari.
“Sales of longer tenor products not only assist future net book growth but also enable investments in longer dated assets, such as property and infrastructure,” he said.
Mr Benari said with annuity net book growth up 10.1 per cent in the past 12 months he expects growth for the 2014 financial year to be around 10 to 12 per cent.
