28th Aug 2015 08:48
LONDON (Alliance News) - Chesnara PLC on Friday reported higher profit in the first half and said it has been testing its resilience to new insurance regulations set to be implemented in 2016 across the EU.
Pretax profit increased to GBP30.4 million in the six months to June 30, compared with GBP27.4 million in the corresponding half the prior year, including a GBP16.2 million gain with the acquisition of the Waard Group.
Net cash generation increased to GBP56.7 million from GBP15.6 million, again bolstered by a one-off benefit of GBP39.9 million from the Waard Group deal.
"The good financial performance has been delivered in a period where UK investment market conditions have been relatively flat, Swedish equity markets have grown and Swedish base rates entered negative territory. Both the Swedish Krona and the euro have depreciated further against sterling," Chief Executive John Deane said in a statement.
Chesnara increased its interim dividend by 3.0% to 6.61 pence per share.
Deane said the company has been focused on generating value from its in-force book, writing profitable new business in Sweden and making acquisitions in the life and pensions sector.
As well as entering the Dutch market by completing the acquisition of the Waard Group for EUR67.8 million in May, Chenara conducted a "dry-run" of the Solvency II position of its insurance subsidiaries.
The so-called dry-run affirmed that the new EU Solvency II insurance rules, which cover requirements for capital strength, governance and risk management, and disclosure and transparency, are not expected to "impact adversely" the overall solvency position of the group, the company said.
Chesnara said it is using the standard formula to check its solvency capital requirements as opposed to an internal model to measure its solvency capital requirement.
Its group solvency ratio was 271% at the end of June, compared with 284% six months earlier.
Chesnara shares were up 1.4% at 351.70 pence on Friday morning.
By Samuel Agini; [email protected]; @samuelagini
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