Close

Our Strategic Objectives

MAXIMISE VALUE FROM EXISTING BUSINESS

WHY THIS MATTERS

The existing in-force books are the core source of cash and are at the heart of our investment case.

HOW WE DELIVER

In the UK, Chesnara adopts an outsourced business model. Governance oversight and strategic direction is provided by a highly experienced centralised governance team. The same team also ensures robust and consistent governance practice across the Group, although operational autonomy is devolved to Sweden and the Netherlands to ensure benefit from their skilled and experienced management teams. Core operations are not outsourced in Sweden or the Netherlands because it would not suit the open business model or inherited model in those territories respectively.

TRACK RECORD

Over recent years gross cash generated from the existing portfolios has more than funded the Chesnara dividend strategy. The UK book has and remains the primary source of cash although during 2015 Movestic, our Swedish operation, reached sufficient scale that it began to contribute positively to this core objective.

Our recently acquired Waard Group is expected to make modest positive contribution in the future.

ACQUIRE LIFE & PENSIONS BUSINESSES

WHY THIS MATTERS

Acquisitions maintain the scale and effectiveness of the operating model. In addition, they create a source of value enhancement and sustain the cash generation potential of the Group.

HOW WE DELIVER

Identify potential deals through an effective network of advisers and industry associates.

We work co-operatively with regulators and assess deals by applying well established criteria which consider the impact on cash generation and embedded value under best estimate and stressed scenarios.

The financial benefits are viewed in the context of the impact the deal will have on the enlarged Group’s risk profile.

Transaction risk is minimised through stringent risk-based due diligence procedures and the senior management team’s acquisition experience and track record.

We fund deals with debt, equity or cash depending on the size and cash flows of each deal.

TRACK RECORD

Chesnara has made five acquisitions since the company was established in 2004; three in the UK, one in Sweden and the most recent in the Netherlands in 2015. The subsequent embedded value growth has been the primary driver of the Group’s total economic value increase from £126m in 2004 to £602.6m at the end of 2016. The acquisitions have also made a significant contribution to the Group’s cash generation thereby funding our dividend strategy. Importantly, no deals have resulted in any form of detrimental customer outcomes and customers benefit from the financial stability the Chesnara Group offers.

ENHANCE VALUE THROUGH PROFITABLE NEW BUSINESS

WHY THIS MATTERS

Whilst new business profits are a relatively modest component of the Chesnara financial model, they are an important, welcome and regular source of value growth which supplements growth delivered by acquisitions.

HOW WE DELIVER

New business activity is only carried out in Sweden, where we primarily focus on unit-linked pensions and savings. We distribute through IFAs and target a realistic share (10-15%) of our target market. To achieve higher volumes would require a pricing strategy that may compromise the profitability of the new business.

TRACK RECORD

Movestic is one of the most selected providers of advised occupational pension plans within the fund insurance segment in Sweden.

This is achieved with a pricing discipline that has generated total cumulative new business profits of over £35m since 2012 representing circa 6% of the Group’s total value.

Sign up for updates