Chesnara PLC (LON:CSN) increased its annual dividend by 3% again as the life insurer said it had produced a solid performance in 2020 in the face of Coronavirus (COVID-19) disruption.
Total funds under management closed higher at the end of December 2020 than the opening position, the pan-European group said.
Policy persistency in its closed operations was better than expected and despite the challenges of COVID-19, Scildon, previously known as Legal & General Nederland, goes into 2021 with over 7% more policies in-force than was the case pre-COVID-19, the company said in a statement.
Against a backdrop of priorities created by COVID-19, adverse operating conditions and continued downward pressure on yields, Chesnara reported a stable pre-dividend economic value and cash generation levels, said John Deane, chief executive.
New business market shares held up relatively well in Sweden and there were notable market share gains in the Netherlands, it said.
“In summary, the business in terms of funds, policy counts and new business market shares remains strong and offers a solid foundation for profit growth post-COVID-19. In short, to date, we have weathered the pandemic storm well and emerge in good shape.”
Chesnara said that the short-term, adverse conditions caused by COVID-19 had meant a detrimental impact on 2020's results.
At Netherlands-based Scildon, cash generation was impacted by continued downward pressure on yields, which contributed to an overall cash loss of £22.3m (2019: gain £22.6m).
Pre-tax profits overall fell to £24.6mln in 2020 compared with the 2019 result of £96.1m and all divisional results were generally lower than last year, Chesnara said, with Scildon seeing the largest reduction.
In addition, the group results include the impact of a £27.6m impairment to the AVIF (Acquired Value in Force) intangible assets, largely relating to Scildon.
Chesnara added that the increase in dividend would also not affect the financial stability of the group.
The post dividend group solvency ratio has risen slightly to 156% (31 December 2019: 155%) with a closing cash balance of £59.9m (31 December 2019: £75.5m) having repaid debt of £15.4m in the year.
Economic value, which includes potential value of future policies, eased slightly to £636.8mln (£670mln) including distributions of £32.3m but were broadly unchanged pre-dividend said Chesnara.
Profits for the year before one-offs fell to £51.8mln (£95.34mln).
Total dividends for the year increased by 3% to 21.94p per share.