AMP’s wealth protection business has reported a 21% increase in after-tax profit to $176 million for the six months ending June 30.

This compares with $138 million in the first half of last year.

Individual life annual premiums were up 7% in the half-year to $1.3 billion, with 70% of revenue coming from lump-sum insurance.

The increase has been attributed to high super sales through AMP Flexible Protection and Axa Elevate products.

Group life insurance annual premiums for the half-year were up 6% to $354 million.

Lapse rates for the wealth protection business were at 12.9%, which AMP blames on tough economic conditions. The rate in the first half of last year was 11.5%.

AMP CEO Craig Dunn says it is a good result, with the company’s overall profit up 11% to $383 million for the six months.

“The strength of the underlying business is evident in the earnings growth, excellent cost control and continued success in contemporary products and platforms,” he said. 

“At the same time, we’ve continued to strengthen our capital position in advance of regulatory change.”

Mr Dunn says integration of the Axa business is ahead of schedule and delivering cost benefits to the company.

“The merger has substantially enhanced the competitive position of AMP and the integration continues to deliver ahead of expectations,” he said. 

“The integration is expected to be complete six months earlier than planned.”

Mr Dunn says the synergies target has been increased by $10 million to $150 million, due to higher than expected adviser retention.

“We remain very focused on our key integration objectives – to maintain business momentum, sharpen our competitive edge by delivering on synergies and drawing on the strengths of both companies,” he said.

The cost of implementing new regulations such as the Future of Financial Advice and MySuper has increased, with the bill now put at $60-$75 million after tax.

Previously, AMP has allowed for implementation costs of $52 million.

“The costs may vary from this depending on final legislation and regulatory guidance, market practice and the future competitive landscape,” the company warned.