Challenger has struck new annuity distribution deals with AMP and Mitsui Sumitomo Primary Life.

It will provide the full range of annuity products through AMP’s investment platforms from September next year, including term annuities, Liquid Lifetime and CarePlus.

Annuities will also be available to AMP’s corporate superannuation members through its SignatureSuper platform.

Challenger CEO Brian Benari says this marks an important step for the company, because AMP is a market leader² in the high-growth retail super sector and has the largest retail adviser network, with more than 3700 advisers.

The Mitsui deal involves Challenger issuing Australian-dollar, fixed-rate annuities with a 20-year term to support a reinsurance agreement with the Japanese insurer.

Challenger will provide a guaranteed interest rate and assume the investment risk initially on half of each new policy.

The interest rate on new business can be revised as market conditions change.

Mitsui customers can choose payment periods of five, 10 or 20 years, with a benefit payable on death.

Australian-dollar products are Mitsui’s most popular foreign-currency offerings, with $20 billion inforce at March 31.

Mr Benari says the deal is part of a drive to broaden Challenger’s product range and distribution relationships.

“Japan has one of the world’s most rapidly ageing populations, who are looking for income from longer-dated products due to the negative Japanese interest rate environment.

“Mitsui’s local expertise and extensive distribution footprint, combined with our risk management and investment capability, creates a compelling proposition.”

The deals are not expected to have a major impact of Challenger’s operating earnings this financial year.

It is maintaining its financial-year operating earning guidance at $620-$640 million.