Highlights

  • CGF’s total life sales rose 4% to AUD 2.5 billion in latest quarter.
  • Fixed term annuity sales increased 29% YoY to AUD 1.1 billion in 1QFY26, while lifetime annuity sales rose 16% to AUD 320 million.
  • Funds management FUM stood at AUD 109.6 billion, reflecting a decrease of 3% over the previous quarter.

Challenger Limited (ASX:CGF) has released its first-quarter FY26 results, highlighting steady growth in annuity demand, expanding partnerships, and continued progress across its Life, Funds Management, and investment operations.

The company has reported a 4% increase in total Life sales to AUD 2.5 billion for 1QFY26, supported by higher annuity demand and continued strategic progress across its operations. Managing Director and Chief Executive Officer Nick Hamilton said the company has sustained its growth momentum from the previous financial year while advancing key initiatives aimed at supporting future expansion.

The company noted that demand for guaranteed lifetime income continues to improve, driven by more Australians entering retirement and aged care. Challenger’s recent partnership with TAL and Insignia Financial to launch MLC Retirement Boost on the MLC Expand platform further expanded its distribution reach across superannuation and wealth management channels.

Annuity Sales and Portfolio Growth

Challenger reported annuity net flows of AUD 415 million during the quarter, contributing to a 2.5% increase in the annuity book. Total annuity sales rose 21% to AUD 1.6 billion, led by lifetime annuity sales of AUD 320 million, up 16% from the prior period. The growth was underpinned by heightened demand for income-focused retirement products, including CarePlus, which delivered record quarterly sales.

Fixed term annuity sales climbed 29% to AUD 1.1 billion, supported by new mandates with superannuation funds. Retail fixed term annuity sales declined 18% and Japanese annuity sales remained stable at AUD 246 million.

The average tenor of new annuity business was 5.1 years, improving the portfolio’s duration profile. Maturities accounted for around 6% of opening annuity liabilities, aligning with expectations for the quarter.

Capital Position and Investment Assets

Challenger Life’s investment assets grew 2% over the quarter to AUD 26.0 billion.

The company continues to prepare for APRA’s upcoming capital framework changes for longevity products, which aim to enhance resilience and support product innovation in the sector.

Funds Management and Affiliate Growth

Funds Management funds under management (FUM) totalled AUD 109.6 billion at quarter-end, down 3% from the prior period. This included AUD 4.9 billion in net outflows and AUD 0.6 billion in client distributions, partially offset by positive market movements of AUD 2.3 billion. Group assets under management (AUM) were AUD 120.9 billion, representing a 2% quarterly decline.

Fidante’s FUM decreased 4% to AUD 91.4 billion. In October 2025, Fidante added London-based Fulcrum Asset Management to its affiliate platform, marking its second affiliate addition of the year.

Outlook

Challenger reaffirmed its FY26 normalised basic earnings per share guidance range of 66 to 72 cents. The company remains focused on expanding partnerships and product offerings across the savings and retirement market as it progresses through the financial year.

CGF shares were trading 1.29% higher at AUD 9.055 per share at the time of writing on 16 October 2025.