Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Sovereign Achieves Growthin Difficult Market

MEDIA RELEASE
20 August 2003
Financial result


Sovereign Achieves Growthin Difficult Market

Statement made by Simon Swanson, Managing Director, Sovereign


The retention of existing life and disability insurance business, supported by strong mortgage lending growth and the first signs of revival of the managed funds market, assisted financial services group Sovereign to increase audited after tax appraisal value profit by 12% to $73 million for the 12 months ending 30 June 2003. Sovereign’s margin on services profit1 increased by 24.4% to $54 million.

The result reflects the broad base of Sovereign’s services, and the financial strength and flexibility this gives the Group during periods when world instability distracts investors.

These results reflect a creditable performance for Sovereign during a period of high market uncertainty. Sovereign also retained its AM Best claims paying rating of A (Excellent) 2 during the period, reflecting the Group’s focus on service excellence.

Along with the rest of the world, the insurance market in New Zealand experienced difficult times as the industry faced challenges resulting from terrorist activities and major new liabilities such as those arising from asbestos claims in the United States. Premiums increased, and this saw the overall market decline in size.

Within this environment Sovereign fared better than most, increasing its overall life and disability market share to 28%, and retaining its position as the country’s largest life insurance company.

Of particular note was Sovereign’s success in increasing inforce premium income by 4% to $520 million.

The area most affected by premium increases was new business, with single premium income from new life and disability insurance sales declining by 33% to $120 million, and new regular premium income declining by 14% to $74 million.
At year-end the insurance company’s shareholders’ funds stood at $397 million.

Home mortgage lending for the 12 months at $1.2 billion was up 55% on last year and total home mortgage lending at period end was $2.6 billion, up 30%.

The provision of home mortgage lending is materially assisting Sovereign’s relationship with the country’s independent mortgage brokers and financial advisers, and their relationship with their clients.

Investment funds under management and administration stayed constant at $5.3 billion, which given the difficult environment for managed funds in general is a very positive result.

Investment markets showed an encouraging if modest recovery in the last quarter of the period, and wealth management contributed some $10 million to the overall profit for the year.

With $3.3 billion in Sovereign managed funds and an 8% market share, the company remains the country’s fifth largest funds manager.


Released on behalf of Sovereign by Network PR (Dennis Lynch)

Notes:

1 - Due to the nature of the life insurance business two profit measures have evolved. Appraisal value profit represents the rise in the market value of the company. It capitalises the value of future profits. Margin on services profit is a measure of profits received from policies as they are earned.

2 - Sovereign Assurance Company Limited has achieved an A (Excellent) rating assigned by AM Best Company, Inc of New Jersey, United States of America (AM Best). This rating was last confirmed by AM Best as at 24 October 2002. AM Best is an approved ratings agency in terms of the Insurance Companies (Ratings and Inspections) Act 1994. A copy of the schedule of ratings is available from Sovereign, 33-45 Hurstmere Road, Takapuna, North Shore.

SOVMR51

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Mycoplasma Bovis: More Properties Positive

One of the latest infected properties is in the Hastings district, the other three are within a farming enterprise in Winton. The suspect property is near Ashburton. More>>

ALSO:

Manawatū Gorge Alternative: More Work Needed To Choose Route

“We are currently working closely and in partnership with local councils and other stakeholders to make the right long-term decision. It’s vital we have strong support on the new route as it will represent a very significant long-term investment and it will need to serve the region and the country for decades to come.” More>>

ALSO:

RBNZ: Super Fund Chief To Be New Reserve Bank Governor

Adrian Orr has been appointed as Reserve Bank Governor effective from 27 March 2018, Finance Minister Grant Robertson says. More>>

ALSO:

ScoopPro: Helping PR Professionals Get More Out Of Scoop

Scoop.co.nz has been a fixture of New Zealand’s news and Public Relations infrastructure for over 18 years. However, without the financial assistance of those using Scoop in a professional context in key sectors such as Public Relations and media, Scoop will not be able to continue this service... More>>

Insurance: 2017 Worst Year On Record For Weather-Related Losses

The Insurance Council of New Zealand (ICNZ) announced today that 2017 has been the most expensive year on record for weather-related losses, with a total insured-losses value of more than $242 million. More>>

ALSO: