Challenger says the business performed well in the third quarter, supported by its core life division.

But life sales decreased 13% to $1.7 billion, reflecting a continued focus on growing longer-duration and more valuable business, it says.

“I am very pleased with the continuing success of our strategy to prioritise growing longer-duration and more valuable annuity business, which is improving the quality of our life book growth and financial performance,” CEO and MD Nick Hamilton said. “Sales across our retirement income products in life have remained strong, supported by rising demand for guaranteed lifetime income and a growing number of Australians entering retirement and aged care.

“As we continue to execute our sales remix strategy, we have seen a pick-up in new business tenor that has led to a significant reduction in maturities and will further support future book growth.”

Mr Hamilton says Challenger will focus on its life and funds management businesses after the sale of its bank to New Zealand’s Heartland Group. The sale is expected to complete at the end of the month. 

The business will “continue to execute our growth strategy and deliver on our purpose of providing customers with financial security for a better retirement. Challenger is well placed to finish the year strongly.”

The business has reaffirmed its 2023-24 normalised net profit before tax forecast, and now expects to be at the top end of the $555-605 million range.