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Sovereign Lifts Financial Performance By 21%

Strong new business growth lifted financial services company, Sovereign Limited, to a record, after tax audited profit of $20.1 million, up 21%, for the six months ending 31 December, 2000.

It is Sovereign’s final result prior to combining its business with that of Colonial Limited, and was before any provisioning for restructuring.

Chairman, Mr Ralph Norris said that in its core business of protection and investment linked life assurance, Sovereign increased its new business by 45% with new annualised premiums rising to $24.5 million.

“It was an excellent result given the competitive nature of the market and the uncertainty in business and consumer confidence levels during the period,” said Mr Norris.

“The network of independent advisers continued to have confidence in our product range, and our business from this source increased by 40%. These advisers have become an increasingly important element in the financial services industry.

“Relevant products, flexibility to meet the specific needs of individuals, and advanced information technology are important requirements these advisers seek from a modern financial services company.”

Other business sectors in which Sovereign made excellent progress were home mortgage lending and administering investments for financial advisers through its Aegis wrap account.

Sovereign is the country’s number one non bank, home mortgage lender and its mortgage book now exceeds $1.5 billion, up 13% in the period. Mr Norris said that during a difficult period for real estate sales, it was an encouraging performance.

Funds under the Aegis management service grew 54% in the six months, and after being operational less than three years funds now exceed $1 billion. This innovative service gives independent advisers an efficient and cost effective means of managing the investment portfolios of individual clients.

Managing Director, Mr Ian Hendry, said that while the six months result did not include any contribution from Colonial, during the period the two organisations worked closely to bring them together operationally.

“We are currently introducing a totally new, combined product range to advisers which has seen us take the best from each of the individual companies,” said Mr Hendry.

“Combined, we are now New Zealand’s largest life insurance provider.

“We have more than $3 billion in funds under management, service some 600,000 customers and employ some 900 people based in Wellington and Auckland.

“In the space of 12 years Sovereign has grown from a start up insurance company to be the country’s market leader. It has been achieved through innovation and challenging the ordinary.

“It is an approach which will become more relevant as the financial services industry responds to the requirements of a rapidly changing, internationally focused world. To continue to succeed we have to be able to offer independent advisers products and services as competitive as any in the world, not just the best in New Zealand.”

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