Last checked at 26 Jan 2017 07:00
26 January 2017
Hansard Global plc
New business results for the six months ended 31 December 2016
Hansard Global plc ("Hansard" or "the Group"), the specialist long-term savings provider, issues its new business results for the six months ended 31 December 2016. All figures refer to the six months ended 31 December 2016 ("H1 2017"), except where indicated.
Summary
· | We have maintained our trend of increasing levels of new business particularly in the Middle East & Africa and Latin America regions; |
· | New business for Hansard International Limited ("Hansard International") for Q2 2017 was £41.0m in PVNBP ("Present Value of New Business Premiums") terms, approximately 11% higher than Q2 2016 and 21% higher than Q1 2017; |
· | Assets under administration have increased since the last quarter by £19m or 2% to £1 billion; |
· | In line with our strategic objective to attain additional licensed access to key target markets, we have signed a strategic alliance with Union Insurance Company PSC ("Union Insurance") to enable growth in the United Arab Emirates ("UAE"). |
Gordon Marr, Group Chief Executive Officer, commented:
"We are pleased to have maintained our continuing upward trend of well-diversified new business growth. We have stated previously that it is our intention to seek out additional licences in attractive markets and we are delighted to have recently announced a partnership with Union Insurance in the UAE which we expect to launch in February 2017."
For further information:
Hansard Global plc +44 (0) 16 2468 8000
Gordon Marr, Group Chief Executive Officer
Tim Davies, Chief Financial Officer
Bell Pottinger +44 (0) 20 3772 2500
Daniel de Belder
Duncan Mayall
Hansard Global plc
New business results for the six months ended 31 December 2016
OVERVIEW
The Group continues to focus on the distribution of regular and single premium products in a range of jurisdictions around the world, achieving well diversified new business growth. Our main sources of new business continue to be in the Middle East & Africa and Rest of World regions. As indicated in our Q1 2017 New Business Results, we have continued to develop new Latin American relationships and we have seen strong new business growth from that region come through in Q2 2017.
In Present Value of New Business Premiums ("PVNBP") terms, levels of new business in Q2 2017 were 11.4% ahead of the equivalent prior year quarter (Q2 2016) and 20.9% ahead of Q1 2017.
The Group has traded profitably during the period and remains strongly capitalised.
NEW STRATEGIC ALLIANCE
Hansard International Limited ("Hansard International"), has entered into a strategic alliance with Union Insurance Company PSC ("Union Insurance"), a major local insurer in the United Arab Emirates ("UAE").
Union Insurance has appointed Hansard International as reinsurer and administrator of its new savings and investment proposition, 'Infinity', which will be launched in February 2017. The appointment is an endorsement of Hansard's top class IT platform and customer service proposition.
This alliance forms part of Hansard's strategic objective to attain additional licensed access to key target markets. We do not expect this relationship to deliver material levels of business in the 2017 financial year, but believe it has significant potential for new business in subsequent years. As with our existing business, profits will emerge over the lifetime of the underlying insurance policies and therefore will take a number of years to generate significant incremental profits.
New Business Flows
New business flows for Hansard International for the quarter and the half year are summarised as follows:
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| 2016 | 2015 | % |
| 2016 | 2015 | % | |
Basis | £m | £m | change |
| £m | £m | change | |
Present Value of New Business Premiums | 41.0 | 36.8 | 11.4 % |
| 74.9 | 56.4 | 32.8 % | |
Annualised Premium Equivalent | 6.4 | 5.2 | 23.1 % |
| 11.7 | 8.4 | 39.3 % | |
· Present Value of New Business Premiums ("PVNBP")
New business flows for Hansard International on the basis of PVNBP are broken down as follows:
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| 2016 | 2015 | % |
| 2016 | 2015 | % |
PVNBP by product type | £m | £m | change |
| £m | £m | change |
Regular premium | 22.1 | 17.1 | 29.2 % |
| 42.6 | 29.9 | 42.5 % |
Single premium | 18.9 | 19.7 | (4.1)% |
| 32.3 | 26.5 | 21.9 % |
Total | 41.0 | 36.8 | 11.4 % |
| 74.9 | 56.4 | 32.8 % |
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| 2016 | 2015 | % |
| 2016 | 2015 | % |
PVNBP by geographical area | £m | £m | change |
| £m | £m | change |
Rest of World | 14.2 | 16.6 | (14.5)% |
| 26.2 | 22.1 | 18.6 % |
Middle East and Africa | 13.3 | 10.2 | 30.4 % |
| 24.0 | 15.0 | 60.0 % |
Far East | 8.4 | 7.0 | 20.0 % |
| 15.8 | 12.8 | 23.4 % |
Latin America | 5.1 | 3.0 | 70.0 % |
| 8.9 | 6.5 | 36.9 % |
Total | 41.0 | 36.8 | 11.4 % |
| 74.9 | 56.4 | 32.8 % |
Assets under Administration ("AUA")
The composition and value of AuA is based upon the assets selected by or on behalf of contract holders to meet their savings and investment needs. Reflecting the wide geographical spread of the Group's customer base, the majority of premium contributions and of AuA are designated in currencies other than sterling.
The total of such assets is affected by the level of new premium contributions received from new and existing policy contracts, the amount of assets withdrawn by contract holders (including those withdrawn from Hansard Europe Limited ("Hansard Europe"), which closed to new business in 2013), charges and the effect of investment market and currency movements. These factors ultimately affect the level of fund-based income earned by the Group.
During H1 2017, AuA grew to over £1 billion, primarily driven by stock market gains and continued weakness in sterling compared to the US dollar.
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| 2016 | 2015 |
| 2016 | 2015 |
| £m | £m |
| £m | £m |
Deposits to investment contracts | 39.8 | 37.0 |
| 73.1 | 60.9 |
Withdrawals from contracts and charges | (43.2) | (38.8) |
| (83.0) | (96.2) |
Effect of market and currency movements | 22.6 | 34.9 |
| 87.4 | (15.6) |
| 19.2 | 33.1 |
| 77.5 | (50.9) |
Opening balance | 981.8 | 823.1 |
| 923.5 | 907.1 |
Assets under Administration at 31 December | 1,001.0 | 856.2 |
| 1,001.0 | 856.2 |
The movement in AuA is split as follows between Hansard International and Hansard Europe:
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| 2016 | 2015 |
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| £m | £m |
Hansard International |
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| 78.3 | (17.8) |
Hansard Europe |
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| (0.8) | (33.1) |
Increase / (decrease) in period |
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| 77.5 | (50.9) |
Litigation and policyholder complaints
The Group continues to carefully manage its litigation relating to the legacy operations of Hansard Europe. Hansard Europe received two new writs in Germany in Q2 2017 with a total amount claimed of c.£0.2m. A further writ was also received in Italy in Q2 2017 with an amount claimed of c.£0.02m. In January 2017, a further nine writs were added by the same counsel in Italy with a total amount claimed of c.£0.2m.
Results for the half-year ENDED 31 December 2016
Trading results for the half-year are expected to be announced on 23 February 2017.
Outlook
We remain optimistic that we can continue to grow business levels through the on-going delivery of our strategy across the regions in which we operate. We view the new relationship with Union Insurance as an important step towards achieving greater levels of new business in key target markets.
Notes to editors:
· | Hansard Global plc is the holding company of the Hansard Group of companies. The Company was listed on the London Stock Exchange in December 2006. The Group is a specialist long-term savings provider, based in the Isle of Man. |
· | The Group offers a range of flexible and tax-efficient investment products within a life assurance policy wrapper, designed to appeal to affluent, international investors. |
· | The Group utilises a controlled cost distribution model by selling policies exclusively through a network of independent financial advisors, and the retail operations of certain financial institutions who provide access to their clients in more than 170 countries. The Group's distribution model is supported by Hansard OnLine, a multi-language internet platform, and is scaleable. |
· | The principal geographic markets in which the Group currently services contract holders and financial advisors are the Middle East, the Far East and Latin America, in the case of Hansard International Limited, and Western Europe in the case of Hansard Europe Designated Activity Company, the Group's two life assurance companies. Hansard Europe Designated Activity Company closed to new business with effect from 30 June 2013. |
· | The Group's objective is to grow by attracting new business and positioning itself to adapt rapidly to market trends and conditions. The scaleability and flexibility of the Group's operations allow it to enter or develop new geographic markets and exploit growth opportunities within existing markets without the need for significant further investment. |
· | Following the closure of Hansard Europe Designated Activity Company to new business with effect from 30 June 2013, the Group continues to report new business performance of Hansard International Limited alone within this document. Reporting of Assets under Administration incorporates cash flows relating to insurance policies issued by both Hansard International Limited and Hansard Europe Designated Activity Company. |
Forward-looking statements:
This announcement may contain certain forward-looking statements with respect to certain of Hansard Global plc's plans and its current goals and expectations relating to future financial condition, performance and results. By their nature forward-looking statements involve risk and uncertainties because they relate to future events and circumstances which are beyond Hansard Global plc's control. As a result, Hansard Global plc's actual future condition, performance and results may differ materially from the plans, goals and expectations set out in Hansard Global plc's forward-looking statements. Hansard Global plc does not undertake to update forward-looking statements contained in this announcement or any other forward-looking statement it may make. No statement in this announcement is intended to be a profit forecast or be relied upon as a guide for future performance.
This announcement contains inside information which is disclosed in accordance with the Market Abuse Regime.