AMP says its wealth protection division’s operating earnings fell 52% to $64 million in the six months to June 30.

The division reported $1 billion of claims in the half, up from $982 million in the corresponding period last year.

AMP says claims grew in its income protection book and in group life.

Lapse rates increased 1% to 13.9%, with losses at $12 million. Inforce premiums were $1.4 billion, up $67 million on the first half of last year.

CEO Craig Dunn says the wealth protection earnings drop was flagged last month in a forecast.

“The life insurance sector is facing structural and cyclical change, and a range of initiatives are in train to address these factors,” he said.

“These include improved customer retention campaigns, additional resources to handle customer claims more effectively and helping income protection customers get back to work more quickly after illness or injury.”

He says such steps should deliver benefits in the short term, before sustained improvement in the medium term.

Meanwhile, Mr Dunn has announced he will retire at the end of this year and be replaced from January 1 by Craig Meller, who has been AMP Financial Services MD since 2007.