Chesnara Regulatory News (CSN)

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 £20.8m (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 £193m (Note 2) (31 December 2019: £210.8m) and the estimated Chesnara parent company cash balance as at 20 March 2020 is £73.5m. 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 £100m from the 31 December 2019 position of £670m (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).