• Total Life sales $2.5 billion, up 4%
• Lifetime annuity sales $320 million, up 16%
• Fixed term annuity sales $1.1 billion, up 29%
• Challenger Life strongly capitalised with a PCA ratio of 1.58 times

Challenger Limited (ASX:CGF) today reported its first quarter AUM, annuity sales and net flows. Total Life sales increased 4% to $2.5 billion driven by strong quarterly annuity sales. Annuity net flows were $415 million, with annuity book growth of 2.5% for the quarter, supported by greater annuity sales and a moderating maturity rate. Annuity sales increased by 21% to $1.6 billion, with strong growth in lifetime annuity sales and fixed term annuity sales. Lifetime annuity sales were up 16% to $320 million, supported by continued demand for guaranteed income solutions, particularly in retirement and aged care. Fixed term annuity sales grew 29% to $1.1 billion, largely driven by new term annuity mandate sales. Retail fixed term annuity sales decreased 18%, as Challenger maintained a disciplined approach to pricing shorter duration business in a competitive fixed income market. Japanese annuity sales were stable at $246 million. Challenger Life's investment assets increased 2% for the quarter to a record high of $26.0 billion. Challenger Life remains strongly capitalised with a PCA ratio of 1.58 times. Funds Management FUM was $109.6 billion, a decrease of $3.2 billion or 3% for the quarter, with net outflows of $4.9 billion and client distributions of $0.6 billion, partially offset by $2.3 billion of positive investment market movements.

Challenger reaffirms its FY26 normalised basic EPS guidance range of between 66 and 72 cents per share.

Building on last financial year's strong performance, Challenger has started FY26 with continued momentum in annuity sales while progressing a range of strategic initiatives to support future growth. The outlook for Index Plus sales remains positive, with new indices being launched and a broad pipeline of opportunities.