AMP Ltd., Australia’s biggest life insurer, posted a 10 percent drop in half-year underlying profit on the back of poor investment returns and higher than expected life insurance claims.

Underlying profit, which excludes investment market volatility, fell to A$513 million ($393 million) for the six months ended June 30 from A$570 million a year earlier, the Sydney-based money and wealth manager said in a statement on Thursday. That missed the A$560.7 million mean estimate from three analysts surveyed by Bloomberg.

Chief Executive Officer Craig Meller has been focusing on turning around AMP’s life insurance division, which has been besieged by costly mental health claims following the global financial crisis and policy cancellations.

“While first half claims experience was poor, we continue to focus on improving the outcomes for customers and shareholders in our wealth protection business, with actions underway to improve capital efficiency and reduce volatility,” Meller said in the statement.

Australian life insurance companies have been battling a surge in claims, policy lapses and low investment returns. Insurers’ revenue fell 36 percent to A$28 billion in the year to June 30 from A$43.9 billion a year earlier, according data from the Australian Prudential Regulation Authority.

The operating earnings of AMP’s wealth protection unit, which includes life insurance, fell to A$47 million in the six months to June 30 from A$99 million a year earlier.

“To address performance in the insurance business, AMP is strengthening income protection assumptions, repricing, continuing the transformation of claims management and accelerating our capital management initiatives,” Meller said.

Shares in the Sydney-based firm have fallen 0.7 percent year to date to A$5.79, compared with the benchmark S&P/ASX 200 Index’s 4.5 percent gain.

AMP declared a 14 Australian cents per share interim dividend, unchanged from a year earlier. Net income for the half rose to A$523 million from A$507 million a year earlier

The company’s asset management arm, AMP Capital Investors Ltd., was forced in July to close its China fund following a year of agitation by hedge fund, LIM Advisors. The China fund, which invests in companies listed on the Shanghai and Shenzhen stock exchanges, has traded at a discount to its net asset value since inception in 2006.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE