Australia's AMP warns H1 profit to fall as insurance claims climb

SYDNEY, June 24:� Australian insurance and wealth management company AMP Ltd warned first-half underlying profit would slide on high claims levels and as more people dropped their policies, sending its sending its shares plunging 11 percent.The profit warning reflects a tougher market for the whole insurance industry which has been hurt by a weaker economy, with more people losing their jobs.AMP, the country's top wealth manager, said it expected first-half underlying profit to fall between A$415 million and A$435 million ($382-$400 million), below A$491 million booked in the first half of 2012.AMP said that for the five months to 31 May 2013, it had� a greater-than-expected A$26 million in losses from insurance claims and a greater-than-expected A$8 million in losses from lapsed policies.Around half of those insurance claims were related to� income protection, which are paid to people out of employment.'It's a very difficult life insurance market here at the moment,' said CIMB Research analyst Richard Coles.'It's just a combination of life insurance policies that� are economically linked like income protection and also people dropping policies...Because they can't afford or don't want to pay the premium anymore,' he added.AMP shares plunged 10.3 percent to a 7-1/2 month low of A$4.47 by 0237 GMT.(agencies)