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LONDON (Alliance News) - Chesnara PLC Friday reported a trebling in annual pretax profit, boosted by its core Countrywide Assured PLC closed book.
Pretax profit rose to GBP60.6 million in 2013, from GBP19.7 million in 2012.
Chesnara said profits from the core CA closed book remain significant, and increasing to GBP25.0 million from GBP18.5 million. Chesnara said the increase is predominantly due to investment market movements, with the core underlying product based surplus remaining resilient to book run-off.
"2013 has been an extremely positive year for Chesnara with the company achieving significant advances across all elements of the business and against key objectives," Graham Kettleborough, Chief Executive, said in a statement.
"Focus and commitment to a proven business model is delivering both operational depth and robustness allowing us to report strong financial results for the existing and new books of business throughout both the UK and Swedish operations," he added.
Chesnara owns Countrywide Assured, Protection Life Company Ltd, and Movestic Livförsäkringar AB.
Countrywide Assured PLC is a UK life assurance subsidiary closed to new business. It has been growing the division and bought Direct Line Life Insurance Company Ltd in late November 2013. It has been renamed Protection Life Company and is being transferred to Countrywide Assured.
Life insurers' shares have been under pressure in trading in the wake of a report by the Telegraph that said the UK's Financial Conduct Authority will on Monday outline a review into up to 30.0 million policies sold by insurance companies from the 1970s to the turn of the millennium.
According to the report, Clive Adamson, the director of supervision at the FCA, said, "We want to find out how closed-book products are being serviced by insurance companies, as we are concerned insurers are allocating an unfair amount of overheads to historic funds.
"As firms cut prices and create new products, there is a danger that customers with older contracts are forgotten. We want to ensure they get a fair deal. As part of the review we will collect information to establish whether we need to intervene on exit charges," he said.
An FCA spokesperson told Alliance News the review will be detailed in the FCA's annual business plan, to be published Monday.
Chesnara increased its full-year dividend by 3% to 17.88
Chesnara shares were Friday quoted at 299.00 pence, down 8.4%.
Chesnara said Kettleborough Friday bought 6,900 shares, representing 0.006% of the shares in issue at a price of 301.5 pence. He now holds 75,000 shares in the company, 0.065%.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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