Slide 1: Challenger – Sustainable Growth
For personal use only Challenger – Sustainable Growth Brian Benari Group Chief Financial Officer & Group Chief Operating Officer
Slide 2: Macro drivers of annuity sales growth: superannuation fund growth
Macro drivers of annuity sales growth For personal use only Growth in underlying superannuation funds 4,000 3,500 3,000 2,500 $m 2,000 1,500 1,000 500 0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2 Source: Rainmaker Superannuation FUM Projections 2011-2021 (Dec 2010).
Slide 3: Macro drivers of annuity sales growth: ageing population
Macro drivers of annuity sales growth For personal use only Ageing population Australian population growth 2008 - 2028 3
Slide 4: Under allocation to defensive assets in Australia relative to OECD
Macro drivers of annuity sales growth For personal use only Under allocation to defensive assets in Australia relative to OECD 100% 80% 60% 40% 20% 0% 4 1Source: OECD Global Pension Statistics (2009 data) July 2010, Issue 7
Slide 5: Growing awareness of longevity risk
Macro drivers of annuity sales growth For personal use only Growing awareness of longevity risk • As recent RBA data highlights (June 2011 quarterly RBA Bulletin) since 2003 an increasing percentage of Australians believe they will need to retire later than age 65 5
Slide 6: Annuities – as part of a retiree's portfolio
Annuities – as part of a retirees portfolio For personal use only • defensive asset in portfolio short • short-term cash vehicle term • education expenses • defensive asset in portfolio medium • cash flow management in SMSF’s term • aged care strategies • “bedrock” of a retiree’s income long • expli
Slide 7: Marketing and building our brand
Marketing and building our brand For personal use only 7
Slide 8: Distribution, Product & Marketing
Distribution, Product & Marketing For personal use only • Distribution Product & Marketing division created in January 2011 to: – align activities focused on increasing sales for Life and Funds Management – drive greater productivity – improve capture of data and metrics • The segmentation of Life o
Slide 9: Distribution, Product & Marketing initiatives
Distribution, Product & Marketing For personal use only • Building on the success of Project 10,000 and Project Welcome Back recently completed initiatives: 7,000 50 – Project Welcome Back – 6,000 successfully reconnected with ~200 40 historic writers 5,000 – Project 10,000 - platform flows gaining
Slide 10: Leading to accelerating retail Life sales
Leading to accelerating retail Life sales For personal use only 800 • Original sales guidance for the year March 11 sales 700 impacted by $1.1bn High Yield • Upgraded to $1.4bn in Feb 11 Fund 600 • Including high yield fund conversion 500 FY11 sales expected to be between Line represents $1.85bn – 1
Slide 11: Increased Boutique Partnerships FUM
Increased Boutique Partnerships FUM For personal use only Forecast Boutique Boutique Funds Under Management FUM expected to be ~$15bn by 30 June 2011 18 15 13 10 $ bn 8 5 3 0 Mar- Jun- Sep- Dec- Mar- Jun- Sep- Dec- Mar- Jun- Sep- Dec- Mar- Jun- Sep- Dec- Mar- Jun- 07 07 07 07 08 08 08 08 09 09 09 09
Slide 12: Sustainable Life Company earnings
Sustainable Life Company earnings For personal use only Balance Sheet P&L Investment Yield Asset Plus normalised growth assumptions Net Margin Capital Plus return on (normalised COE) free float (capital) Annuity Less Interest paid & Funding commissions 12
Slide 13: Sustainable Life Company earnings: illustrative margin
Sustainable Life Company earnings For personal use only Illustrative Margin Investment 9.5% 8.5% Yield Annuity 6.5% 6.5% Funding Asset Spread 3.0% 2.0% Capital 1.3% 1.3% Normalised 0.7% 0.7% Growth Net Margin 5.0% 4.0% (normalised COE) 13
Slide 14: Summary
Summary For personal use only • Sales growth underpinned by structural tailwinds • Creation of Distribution, Product & Marketing to increasing sales, lifting productivity and expanding sales footprint • Boutique flows continue at a strong pace – FUM expected to be ~$15bn at 30 June 2011 • FY11 retai
Slide 15: Disclaimer
For personal use only Disclaimer: The material in this presentation is general background information about Challenger Limited activities and is current at the date of the presentation. It is information given in summary form and does not purport to be complete. It is not intended to be relied upon