Life insurance firm’s finances strong enough to support final dividend payment
Chesnara, the Preston-based life insurance firm, said it is well capitalised in a trading update today, and pledged to pay its scheduled final dividend to shareholders.
The company, headed by chief executive John Deane, has also moved publication of its annual results, and its annual general meeting, in light of the current restrictions caused by the coronavirus pandemic.
Chesnara’s update today said by March 20, 2020, its estimated solvency cover ratio was 164%, compared with 155% at December 31, 2019, after its 2019 final dividend, which is a proposed three per cent increase to 13.87p per share, worth £20.8m.
Formal publication of its results for the year ended December 31, 2019, has been postponed until April 15, 2020, and, in the interest of the health and safety of the firm’s staff and business partners, the presentation for analysts will now be held by telephone.
It said its annual general meeting will not now be held on May 12 as previously announced, but on May 26, and the meeting will be held at its Preston offices.
Today’s update said the firm is operationally resilient and continues to focus on supporting its customers and colleagues.
Its value of surplus above the solvency capital requirement is estimated at approximately £193m, compared with £210.8m at December 31, 2019, and the estimated Chesnara parent company cash balance as at March 20 is £73.5m.
Solvency estimates within its divisions show that all remain above their local requirements and hence the firm continues to expect material dividend payments to be paid to Chesnara during the second quarter of the year, further supporting the group’s longstanding dividend strategy.
As expected, and in line with our reported sensitivities, market movements up to March 20, have had an adverse impact on the firm’s economic value.
It estimates the impact of market movements to that date to be a reduction of approximately £100m from the December 31, 2019, position of £670m.
Despite the challenging circumstances, Chesnara says its operations at both head office and its divisions continue to function effectively.
It said: “Our business continuity plans have been implemented and continue to be adapted as the situation evolves, with new working arrangements in place and with the vast majority of our colleagues and outsource partners now working from home.
“Our risk management and control framework continues to be effective.
“New business activity in Holland and Sweden for Q1 has seen some small impact from the current environment.
“The impact is expected to be greater in the rest of the year, with a corresponding reduction consequently in the capital required to support new business.”
