Chesnara boosted by investment markets

IMPROVEMENTS in the investment markets have helped boost first quarter earnings for Chesnara, the Preston-based holding company for the life insurer Countrywide Assured.

Chesnara’s European Embedded Value (EEV) – the measure of a life insurer’s value – stood at £277.9m for the first quarter to the end of March, a £101m increase on the same quarter last year. This is also up on the company’s 2009 year end figure of £262.6m.

The company said that investment market improvements had a significant impact on earnings for both the UK and Swedish businesses, which posted first quarter gains of £4.0m and £2.7m after tax respectively.

However, it warned that since the quarter end, investment markets have been
Weaker. UK equity indices, which gained 5% over the first quarter, have fallen back to reflect losses approaching 2% since the end of December.

In February 2010, Swedish subsidiary Moderna acquired the in-force business, personnel, expertise and systems of Aspis, which was to have its license revoked by the regulator because of insolvency.

The company said: “By entering into the Agreement, Moderna removed significant uncertainty for Aspis’ customers, staff and supporting intermediaries and acquired a book of protection business which represents an excellent strategic fit with its existing pensions and savings business.”

It warned that considerable bad press for Aspis in Sweden meant the value of the net assets and goodwill of the acquisition cannot yet be reliably assessed.

It added: “We continue to see a decent flow of potential acquisition opportunities and, as demonstrated with the Aspis transaction, we will readily progress these where we see value and a clear strategic fit.

“As regards other opportunities, while we remain open-minded as to location in the UK and Western Europe, we will continue to apply strict financial and risk criteria in assessing them.”