Challenger (ASX:CGF) is showing signs of progress towards a rebalancing of its book despite lower interest rates and softness in short-term fixed annuity sales, according to an Oct. 17 note by Jarden.

The investment manager saw its Life sales rise 10% year on year to AU$2.4 billion in the fiscal first quarter ended September, AU$300 million above Jarden's estimates.

Lifetime sales were up 26% to AU$275 million and Japanese annuity sales climbed 74% to AU$244 million. Life's overall net book growth fell AU$165 million or 0.8% due to term pricing competition and an inverted yield curve.

Jarden said after reinvestments and excluding the impact of Aware Super, the tenor of total Life sales rose to 3.9 years in the first quarter of fiscal 2025 from 3.1 years in the year-ago period.

"This duration mix shift should see maturity rates continue to fall and despite near-term headwinds to book value from competition/yield curve impacts, longer duration sales should support Life net book growth and higher Life margins ahead," Jarden said.

Jarden maintained its overweight recommendation and raised its price target to AU$8.10 from AU$7.90.

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