Fidelity is aiming for second place

Fidelity Life aims to become the second largest life insurance company in the country, but according to its annual report, it has no plans to pay dividends this year.

Tuesday, October 12, 2021 2:19 pm

Matthew Martin

Fidelity Life continues to be Kiwi’s largest life insurance company. Record underlying profits The $ 22.5 million year ended June 30 was up from $ 20.3 million in 2020.

Comprehensive income decreased from $ 17.9 million in 2020 to $ 4.3 million. This reflects a total of $ 9.3 million in major transformation projects, including the company’s new technology platform and Westpac Life’s takeover offer.

Brian Brake, Chairman of the Board, $ 400 Million Westpac Life Contract Is one of the most important events in the company’s history, and when completed, Fidelity Life will welcome Nightaf Capital as a major shareholder alongside the New Zealand Super Fund.

“Our market share is expected to grow from the current 11.6% to about 17%, making Fidelity Life the second largest life insurance company in the country,” says Blake.

“We expect to close the transaction by the end of 2021, awaiting regulatory and shareholder approval.”

The takeover offer for Project Watson (Fidelity’s Technology Upgrade Program) and Westpack Life puts a lot of pressure on capital and requires a cautious approach, he says.

“As a result, the board has decided not to declare dividends this year. We thank our shareholders for their continued patience.”

The main drivers of Fidelity’s profits were a $ 6.1 million increase in net premium income thanks to strong new businesses, less than expected policy lapses, and strong expense management.

The company charged its customers $ 130.8 million, compared to $ 139.7 million in 2020, and the sharp rise in government bond rates had a $ 7.3 million impact (after tax).

A further contributor was the one-time $ 1.8 million profit from the sale of the Carlton Gore Rd building.

The company also covers a total of $ 3.4 million to cover the historic tax treatment of reinsurance contracts with the Internal Revenue Service and the discontinuation of tax loss recognition of its subsidiary Fidelity Capital Guaranteed Bond Limited. I paid for the temporary tax adjustment. Help fund the Westpac Life acquisition offer.

“By strengthening New Zealand ownership and expanding access to capital, as well as registering two iconic New Zealand investors in the stock register, the market for the quality and potential of Fidelity Life. Sends a strong signal to New Zealand, “says Blake.

After the retirement of Simon Motherway and Hamish Rumbold, Fidelity’s board of directors remains vacant with two directors.

The replacement will be done by Ngāi Tahu Capital and the NZ Super Fund, which expects the board to return fully with eight directors by the end of this year.

Melissa Cantel, CEO, who joined Fidelity Life in January 2021, said she was happy with the company’s performance and described her annual report as “stable financial performance.”

“We worked hard this year and laid a strong foundation,” she says.

“We continued to invest in transformation, but at the same time, we had the fundamental result of a strong performance in our core business of providing life insurance to New Zealanders.”

tag: Annual report Fidelity Life Melissa Cantel

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Fidelity is aiming for second place

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