Life insurance firm sees 50% profit before tax

Life insurance firm Chesnara saw a 50% drop in profit before tax over the first six months of the year.

The Preston based company reported that profit before tax fell to £26.5m from £51.6m.

The firm saw an economic loss of £800,000 compared to a corresponding profit of £14.3m in the first half of 2017.

Chesnara said is Scildon business had been hurt by losses on Italian bonds.

The fall in profit was just 14 percent when accounting for a £20.7 million pound gain the company said it made on the acquisition of Scildon a year ago.

However group cash generation stood at £48.6m.

And solid new business profits have emerged from Movestic.

Scildon’s new business operation is not generating sufficient profit although positive volume trends and the recent launch of a new mortgage term product should begin to address this issue.

Chief executive John Deane said: “I am pleased to report that during the first half of 2018, a period in which equity markets remained broadly unchanged, we continued to generate more than sufficient cash to fund the dividend strategy, though we saw a fall in our Economic Value following the payment of the final 2017 dividend and foreign exchange losses as a result of a weakening of the Swedish krona.

“The strong 2017 results were most welcome as they reflected the benefits that can arise from successful acquisitions and from positive market conditions, but it is equally important that the business, as in the first half of this year, can generate sufficient cash in the absence of acquisitions and without the assistance of economic tailwinds.

“We have made good progress with the Scildon development programme and I am pleased to report a 29% increase in the sales of Term contracts compared to the first half of 2017.

“There is more to do and time is required but I am encouraged by the improvements during the year.”