Challenger chief executive Brian Benari has welcomed competition in the annuities space from CommInsure as "great news" that will open up the retirement incomes market.
Speaking at Challenger's annual results presentation yesterday, Mr Benari said he thinks competition in the annuities sector is a "very positive thing".
"You’re starting to see this whole movement in the market where [providers] are now focusing on retirement incomes and they’re moving away from the accumulation phase," Mr Benari said.
Mr Benari was asked about CommInsure's recent announcement that its annuities will be added to Colonial First State's platforms – which came before Challenger's announcement that its own annuities would be added to the platform.
"In talking with Colonial [First State] and working with them to put our annuities on platforms, we fully recognise that they’ll be putting out their product out there," he said.
"I’m competing against their product today, I have done for a series of years and I’ll continue to compete against their product – both of those which will be sitting on platform today.
"That doesn’t worry me. The more people that are out there sending out the message that in retirement you need to think ... about sequencing risk, longevity risks – that’s great news because it just opens up the whole market," Mr Benari said.
Challenger's annual result saw the company post a normalised net profit after tax of $334 million, up two per cent on the previous year.
Challenger Life (the annuities division) had $12.8 billion of assets under management as at 30 June 2015.
The company's assets under management increased by 18 per cent to $59.8 billion for the 2014-15 financial year.
Total life product sales were up nine per cent to 3.7 billion, and funds management organic net flows were $2.9 billion.
Challenger also announced the launch of a new aged care product called CarePlus to coincide with the annual result announcement.
Stimulate new ideas. Stimulate new thinking. Top up your CPD and hear from industry experts with InvestorDaily’s Knowledge Centre. Keep up to date with the latest trends and reforms, all while adding to your CPD. Explore the knowledge centre Knowledge Centre now.
Despite the Australian economy’s ongoing rapid recovery, an Australian equity head believes GDP growth will “fade” in 2022. ...
The next financial year could see a “new record year” for dividends as the Australian economy continues its recovery from the COVID-19 p...