Investment group Challenger posted improved earnings in the last financial year, supported by its core life business. 

Total normalised net profit before tax rose 10% to $521 million in the 12-month period to June 30 from a year earlier and statutory net profit after tax gained 13% to $288 million. 

Life earnings before interest and tax (EBIT) increased 14% to $541 million, benefitting from both margin expansion and assets under management growth. The life business includes Challenger Life Company Limited, a provider of annuities and guaranteed retirement income products. 

“Challenger has delivered a strong performance this year as we focus on expanding our customer reach and driving growth initiatives,” MD and CEO Nick Hamilton said. 

“Our life business achieved total sales of $9.7 billion, driving book growth of 5.2%.” 

In this financial year Challenger is focused on growing its core retirement and investment businesses and accelerating growth through life sales. At the same time it is also aiming to increase its fund management business. 

“Reflecting Challenger’s strategy to improve the quality of the life book through growing longer duration business, 74% of new business annuity sales were greater than two years, which will help support book growth in FY24,” the company says. 

Challenger says its strategic focus on building and deepening partnerships with institutional customers will support its long-term goals for the life business. 

The retirement partnership with TelstraSuper, formed in the last financial year, will be the first fund to launch a comprehensive retirement income solution with Challenger. 

Last month Challenger announced it has been selected as Aware Super’s partner to provide a group lifetime annuity policy to the value of $619 million. The contract will be included in Challenger’s first quarter 2024 lifetime annuity sales. 

For this financial year Challenger is targeting normalised net profit before tax guidance between $555 million and $605 million, with the mid-point of the range representing an 11% increase on FY23. 

The guidance range excludes Challenger Bank, the sale of which is expected to complete in the December half.