AMP Life has reported a 45% slump in profits from its insurance business in the six months to June 30.

As a result, a new deal with Gen Re and Munich Re will see 65% of the insurance portfolio reinsured for claims from November 1.

The quota arrangement with Gen Re will cover 60% of the National Mutual portfolio, a business that merged with AMP Life on January 1. Gen Re will also provide a surplus cover agreement to assist with managing risk and volatility in individual retail claims.

The second part of the deal renews Munich Re’s cover of the AMP Life portfolio, and extends it from 50% to 60%. The new deals bring together 35 current reinsurance treaties and will release about $500 million in capital.

AMP Life’s profit in the first six months was $49 million down from $90 million.

But operating earnings were up 10.6% to $52 million, and annual inforce premium was up to $3 million from $1.4 billion in the corresponding period last year.

Group life annual premium was unchanged at $440 million.

The lapse rate was flat at 13.4%, but AMP predicts a higher figure for the second half as age premium increases take effect.

“The announcement of further reinsurance agreements, completing the strategic reinsurance program, lessens exposure to retail claims volatility and will further stabilise wealth protection earnings,” AMP CEO Craig Meller said.

“AMP continued to support customers during their time of need, paying $575 million in claims during the six months to June 30.”