AMP Life has reported an $18 million blowout in claims for the three months to March 31.

Most of the losses were in retail income protection, across both incidence and termination.

AMP CEO Craig Meller says the insurer is continuing to monitor the business closely. The claims increase has not caused it to alter its best-estimate assumptions at present.

“As previously flagged, volatility in Australian wealth protection experience continues to be expected from period to period,” he said. “During remediation of the Australian wealth protection business, this volatility may at times be amplified.”

Mr Meller says AMP’s claims improvement program continues to deliver better customer outcomes and remains important to the business’ long-term sustainability.

“In addition we have seen the broader market reprice insurance, providing increased flexibility to adjust prices upward if required,” he said.

“AMP is continuing to actively review capital efficiency initiatives and is well down the path with plans to legally consolidate its two life insurance businesses, although timing is dependent on regulatory approvals.”

At the company’s AGM in Melbourne last week outgoing Chairman Simon McKeon said culture is key to restoring consumer trust.

“This discussion stems from a series of serious and disappointing issues across the industry, including the mismanagement of life insurance claims, which followed last year’s concerns about the financial advice sector,” he said.

“At AMP we treat each claim on a case-by-case basis and use thorough, expert assessment to identify and pay all rightful claims.”

Mr McKeon admits AMP has made mistakes. “But we are committed to being absolutely open and fixing our mistakes if we’re in the wrong. The recent scrutiny has served to highlight the inherent complexity in life insurance.

“We recognised the need for change two years ago and have been on the front foot in putting in place a comprehensive program to make our insurance business better for customers and more sustainable for shareholders.”