TIDMCSN
RNS Number : 9527H
Chesnara PLC
30 March 2020
CHESNARA plc
("Chesnara" or "the Company")
30 March 2020
LEI Number: 213800VFRMBRTSZ3SJ06
UPDATE ANNOUNCEMENT
KEY POINTS
-- Chesnara well capitalised; 20 March 2020 estimated solvency
cover ratio of 164% (31 December 2019: 155%) after 2019 final
dividend.
-- Proposed 3% increase in 2019 final dividend to 13.87 pence per share.
-- Formal publication of 2019 results to take place on 15 April 2020.
-- Operationally resilient; continue to focus on supporting our customers and colleagues.
Chesnara plc, the life assurance group, provides a brief
financial and operational update in the face of the Coronavirus
pandemic and associated Government guidance across our territories.
The Company's focus has been, and remains, on ensuring that it
continues to support its customers and colleagues whilst
maintaining its financial and operational resilience.
Financial update
Chesnara remains well capitalised. Based on the closing market
position on 20 March 2020, our solvency cover ratio is estimated
(Note 1) at approximately 164% (31 December 2019: 155%)(Note 2),
after allowing for the payment of a proposed dividend of GBP20.8m
(13.87 pence per share) which represents a 3% uplift on the 2018
final dividend. Subject to approval at the AGM, this dividend will
be paid on 2 June 2020 to shareholders on the register on 24 April
2020.
The corresponding value of surplus above our solvency capital
requirement is estimated at approximately GBP193m (Note 2) (31
December 2019: GBP210.8m) and the estimated Chesnara parent company
cash balance as at 20 March 2020 is GBP73.5m. Solvency estimates
within our divisions show that all remain above their local
requirements and hence we continue 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 20 March 2020 have had an adverse impact on our
Economic Value. We estimate the impact of market movements to that
date to be a reduction of approximately GBP100m from the 31
December 2019 position of GBP670m (Note 2).
Further to its announcement on 23 March 2020; the subsequent
combined press release of the FCA, FRC and PRA on 26 March; and the
associated guidance to companies and auditors regarding the
Coronavirus pandemic, the Company announces that the publication of
its preliminary financial results for the year ended 31 December
2019 has been postponed until 15 April 2020. In the interest of the
health and safety of our staff and business partners, the
presentation for analysts will now be held by telephone at 9.30am
on 15 April 2020.
Operational update
Despite the challenging circumstances, our operations at both
Head Office and our divisions, continue to function effectively.
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.
AGM
We note that, as a direct consequence of the challenges this
pandemic has created, including the deferral of the publication of
our results, the AGM will not now be held on 12 May 2020 as
previously announced. Having reassessed the implications of the
guidance related to the FCA, PRA and FRC release, the Company
announces that the revised date for its AGM will be 26 May 2020 and
the meeting will be held at the offices of Chesnara plc, Building
4, West Strand Business Park, West Strand Road, Preston, PR1 8UY.
The AGM arrangements will give full regard to our responsibilities
to support social distancing requirements in order to protect the
health and safety of our staff, shareholders, business partners and
the UK population more generally.
Note 1 - the 20 March estimated solvency position takes a high
level approach using the established divisional solvency estimation
routines, market movements and sensitivities to calculate the
expected impacts. Market indices are considered by each division
depending on their exposure, including equity markets, yields and
spreads. Operating items such as the potential mortality and
longevity changes or cost base changes are not factored into the
estimate; however, analysis has been undertaken that indicates the
expected impact of not allowing for these is not significant.
Note 2 - the closing 2019 solvency figures and Economic Value
are derived from our regulatory reporting routines
For further information, please contact:
Roddy Watt
Director, Capital Markets
FWD
Forward thinking communications
T - 020 7280 0651
E - roddy.watt@fwdconsulting.co.uk
Notes to Editors
Chesnara is a life and pensions company listed on the London
Stock Exchange. It administers over one million policies with those
assets spread broadly equally across businesses in the UK, the
Netherlands and Sweden. Chesnara operates as Countrywide Assured in
the UK, as The Waard Group and Scildon in the Netherlands, and as
Movestic in Sweden.
Following a three pillar strategy, Chesnara's primary
responsibility is the efficient administration of its customers'
life and savings policies, ensuring good customer outcomes and
providing a secure and compliant environment to protect
policyholder interests. It also adds value by writing profitable
new business in Sweden and the Netherlands and by undertaking
value-adding acquisitions of either companies or portfolios.
Consistent delivery of the Company strategy has enabled Chesnara
to increase its dividend for 14 years in succession.
Further details are available on the Company's website
(www.chesnara.co.uk).
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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March 30, 2020 02:00 ET (06:00 GMT)
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