AMP’s first-quarter insurance claims and policy lapses are in line with company expectations but shareholders have been warned there is no “quick fix” for the wealth management business.

Annual premium income from the business was relatively stable at $1.8 billion at the end of the quarter, compared to $1.81 billion for the corresponding period a year earlier.

“So far, in the first quarter of the year, our experience of both insurance claims and policy lapses has been broadly in line with what we expected,” CEO Craig Meller told the annual general meeting last week.

AMP forecasts 2014 claims will be similar to last year, while lapses may worsen by about one percentage point before management actions take effect.

Mr Meller says Australia’s personal insurance model needs to change as the industry grapples with customers changing policies, cutting cover due to financial pressure and making more claims.

“The cost of these claims is increasing, partly because in tougher economic times, it takes longer to get people back to work,” he said.

“Insurance has always been a cyclical business, but some of these changes in customer behaviour and expectations are not part of a normal business cycle. They are new, and they could be permanent.”

AMP wealth protection operating earnings slumped last year to $64 million from $190 million in 2012 as life insurance claims and policy lapses held above the long-term average.

Improving the performance of the life business “won’t be a quick fix”, Chairman-designate Simon McKeon says.

“We need to play a major role in this, to help customers better understand the real benefit life insurance offers to make it more affordable, easier to access and easier to understand.”