The company said it remains well capitalised with a solvency ratio, as at 20 March, of around 164%.
The corresponding value of surplus above its solvency capital requirement is estimated at around £193mln, while the estimated Chesnara parent company cash balance as at 20 March 2020 was £73.5mln.
Solvency estimates within the group’s divisions show that all remain above their local requirements and hence the company continues to expect material dividend payments to be paid to Chesnara during the second quarter of the year, further supporting the group's long-standing dividend strategy.
Chesnara has not been entirely unaffected, however, by the stock market gyrations during the coronavirus pandemic, with the company estimating its economic value has taken a hit of around £100mln from market movements.
“Economic value” is based on the Solvency II ‘own funds’ valuation with adjustments for contract boundaries, risk margin and adding back the impact of restrictions placed on the value of certain ring-fenced with-profit funds.
New business activity in Holland and Sweden during the first quarter has seen some small impact from the current coronavirus situation. 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.