19th Nov 2015 10:59
LONDON (Alliance News) - Chesnara PLC, a life assurance and pensions company consolidator, on Thursday said that cash generation remains in line with expectations for 2015.
The company said that GBP6.6 million of gross cash was generated in the third quarter, including GBP2.1 million from Swedish business Movestic.
Chesnara said its embedded value, which is meant to take into account the longer-term nature of the group's insurance and investment contracts, is more sensitive than cash generation to short-term moves in equity markets and volatility.
That resulted in a GBP22.4 million embedded value loss in the third quarter, including a GBP10.6 million increase in the cost of policy-holder guarantees.
Chesnara noted that its embedded value was GBP425.5 million on September, which was still higher than the GBP417.2 million recorded at the end of 2014 despite the third-quarter loss and payment of dividends.
"A large proportion of the adverse equity market impact to the UK cost of guarantee reserve and the group embedded value will have reversed based on equity market recovery in both the UK and Sweden subsequent to the September 30 reporting date," Chesnara said.
The stock was up 0.4% at 338.68 pence on Thursday morning.
By Samuel Agini; [email protected]; @samuelagini
Copyright 2015 Alliance News Limited. All Rights Reserved.
Related Shares:
Chesnara