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

 

Sovereign Lifts Market Share And Profit

MEDIA RELEASE
18 August 2005

Sovereign Lifts Market Share And Profit

Statement made by Barbara Chapman, Managing Director, Sovereign


Industry leadership, diversity of activity and increased operational efficiency lifted Sovereign’s after tax operating profit by 18% to $80.9 million for the financial year ended June 30 2005. This is a pleasing result in an environment where investment markets have improved relative to last year, and the housing sector has remained buoyant.

In its core business of life risk insurance, Sovereign increased its annual net in-force premium income by 11% to $279 million. In the process, it lifted its share of regular premium new business to 31.8%, an increase in market share of over 3%, consolidating its leadership in this market. Sovereign’s new business market share is now bigger than the combined market share of its next three biggest rivals.

Despite these results, Sovereign is concerned that New Zealanders rate of life insurance uptake[1] presents an increasing risk, as it is not keeping pace with the growth in the levels of home mortgage lending[2]. This could have a flow on effect on families in the event of death, illness or a downturn in employment.

A noticeable feature of Sovereign’s risk management products is the combination of their contemporary nature, their focus on flexibility to meet customers changing circumstances, and the changes taking place within society itself.

An example of this is the revamp Sovereign undertook of its health insurance range during the year. A low cost product was introduced that meets modern health care needs based around an aging population and advances in health science.

In health insurance, Sovereign increased its annual net in-force premium income by 18% to $44 million.

The most buoyant business sector for us was home mortgage lending, with advances during the year topping $1.96 billion, bringing home mortgage advances in force to more than $4.5 billion, up 30%. This makes Sovereign Home Loans by far the largest non-bank in the home mortgage market.

During the year Sovereign Home Loans launched Go Low-Doc, a non-conforming home loan product, and now leads the market in this segment.

Funds under management at year-end were stable at $3.3 billion. The performance of Sovereign’s funds was recognised by being finalists in five of the eight Morningstar Fund Manager of the Year Award categories.

[1] For y/e 31 December 2004 term annual premium income up 9%, replacement income annual premium income up 3% - Source: ISI

[2] For y/e 31 December 2004 total housing loans up 16% - Source: RBNZ

ENDS

Sovereign is New Zealand's largest life insurance company, its largest home-loan provider outside the four major trading bank groups, and fifth largest investment company. We meet the financial service needs of over half a million customers. More information on Sovereign can be found at www.sovereign.co.nz

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Dry: Beef + Lamb Launches Drought Resources

The resources include a fact sheet outlining strategies to manage and mitigate the effects of drought, coping with stress on the farm and advice on feed requirements and animal welfare during the dry period. More>>

ALSO:

InternetNZ: Net Neutrality Failure In US "Will Hurt All Users"

InternetNZ Chief Executive Jordan Carter has condemned the decision by the United States communications regulator to undo 2015 open Internet rules, warning that all Internet users will end up worse off as a result. More>>

ALSO:

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:

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>>