Investment group Challenger says total life sales in the December half rose 10% from a year earlier to $3.4 billion, illustrating the success of its revenue diversification strategy.

In an earnings release, the business says its Challenger Life division enjoyed increased sales across all key product categories including domestic term annuities, domestic lifetime annuities and Japanese annuities.

The contribution from annuity sales in Japan via its partnership with MS Primary grew 15% and represented approximately one-quarter of total first-half annuity sales. In the December half, total life annuity sales surged 12% to $2.19 billion from a year earlier while other life sales gained 5.4% to $1.25 billion.

“Challenger has focused on diversifying its sales channels in order to build resilient sales across a range of retail and institutional clients,” it says in its interim financial report.

“Challenger’s annuity sales mix continues to evolve toward long-term products. Long-term annuities embed more value for shareholders as they lengthen the tenor of the annuity book, improve the maturity profile and typically enhance shareholder return on equity.”

The business says the division has “momentum” despite a 32.6% decline in normalised earnings before interest and tax to $192.8 million.

“We have reported record long-term annuity sales during the half, which underpin future book growth,” MD and CEO Richard Howes said. “We have also seen stabilisation in the adviser market and deepened our relationships with independent financial advisers.”

Challenger, which also has a funds management arm, says overall nomalised net profit before tax declined to $196.2 million from $278.6 million a year earlier.