Scandal-hit AMP expects further fallout from the Hayne royal commission, which has exposed the group’s poor conduct and corporate deceit.

First-half net profit plunged 74.2% to $115 million as about $312 million was set aside for advice remediation and related costs. Commission-related expenses were $13 million. Underlying profit fell 7.1% to $495 million.

“The events around the [Hayne commission] on financial services have challenged our reputation, and while we continue to monitor the impacts, we have taken action to stabilise the business and move forward,” Acting CEO Mike Wilkins said.

“Headwinds remain for the second half of the year, but our focus is clear. We’re driving change right across the business… helping to earn back trust in AMP.”

The wealth protection arm, which sells individual and group life cover, suffered a 98.1% slump in operating earnings to $1 million. The individual risk lapse rate grew 1.3 percentage points to 14.7%, partly amid fallout from the Hayne hearings.

Earnings were also affected by higher-than-expected claims activity and reserve strengthening on a large terminated group plan.

The business lost another group plan last month and expects this to reduce annual premium inforce by a further $100 million.

Individual risk annual premium inforce increased 0.3% to nearly $1.5 billion, but group risk declined 15.7% to $371 million. Total wealth protection cash inflows fell 2.2% to $933 million and outflows declined by 16.4% to $518 million.