Chesnara benefits from stronger markets
THE recovery of the global equity markets has helped Chesnara, the Preston-based holding company for the life insurer Countrywide Assured.
This comeback has been a “dominant” feature underlying third quarter earnings pushing profit at its UK life and pensions business up to £13.2m from £2.4 last year.
In July Chesnara spent £20.1m on Swedish life insurance business Moderna Life, taking control of the business as part of a fire sale of the former Swedish assets of indebted Icelandic investment company Milestone.
It said the business had recorded a small loss over the 10 weeks following the acquisition and will continue to incurr trading losses for two years, “until realised profits from an increasing base of in-force investment contracts outweigh the front-end strain of writing new business.”
However, the acquisition has had a significant impact on Chesnara’s European Embedded Value (EEV) – the measure of a life insurer’s value. The deal has added 54.7m, recorded as an exceptional profit in the accounts.
This figure, together with other gains during the nine months to September 30, has left Chesnara with an EEV of £258.7m, up 43.2 on the same period last year.
The group repeated its determination to take advantage of more opportunities created by turbulent financial markets. It said it was well-placed due to its strong capital base.
