(Alliance News) - Chesnara PLC on Wednesday reported a sharp rise in annual profit, on a strong investment return, as the firm commits to a dividend going forward.
In 2019, the life insurer and pensions consolidator saw pretax profit jump to GBP96.1 million from GBP27.0 million.
Chesnara's net investment return in 2019 was GBP1.41 billion compared to a GBP335.0 million loss in 2018.
Commercial new business profit was down to GBP14.4 million from GBP15.4 million.
Net insurance premium revenue rose to GBP224.1 million from GBP219.4 million.
"During 2019 Chesnara continued to deliver strong cash generation, funding the dividend strategy as well as maintaining a robust group solvency ratio," the company said.
Chesnara's cash generation in 2019 stood at GBP36.7 million, down from GBP47.8 million in 2018. As a result, the company upped its full year dividend by 3% to 21.30 pence.
Group Solvency II ratio was 155% in 2019, down slightly from 158% in 2018.
Economic value earnings rose to GBP104.0 million from GBP60.9 million.
Chesnara continued: "Economic value increased significantly as a result of favourable economic conditions, despite the impact of a substantive foreign exchange loss due to currency fluctuations. Prudent financial and operational management has resulted in Chesnara's operations, solvency and dividends all being resilient to the impacts of Covid-19, however the economic value will have fallen subsequent to the year end."
Chief Executive John Deane added: "Historical investment decisions have given us a balanced risk profile as a business. Prudent, yet progressive, historical dividend payments, a low gearing ratio (11%) and a keen focus on operational resilience have resulted in the business being able to cope well with the challenges of Covid-19 and provide our customers, investors and other stakeholders with a strongly capitalised business that provides stability and security in these uncertain times.
"The solvency of the group has held up well which has enabled us to continue our dividend strategy without compromising the financial stability of the business."
Shares in Chesnara were 4.9% higher in London on Wednesday morning at 319.50 pence each.
By Paul McGowan; paulmcgowan@alliancenews.com
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Chesnara (CSN)