Fidelity Life has posted its results for the year ended June 30, with an uptick in underlying profit to $22.5 million from $20.3 million in the previous year.
According to the New Zealand-owned insurer, the key drivers of the growth were a $6.1 million increase in net premium revenue due to strong new business, fewer than expected policy lapses and robust expense management.
The company paid out $130.8 million in claims, a slight decrease from $139.7 million the previous year.
Total comprehensive income fell to $4.3 million from $17.9 million. This reflected $9.3 million worth of investments various transformation projects (net of tax), such as the firm’s new technology platform and the proposed acquisition of Westpac Life. In addition, a sharp rise in government bond rates had a $7.3 million impact (net of tax).
Fidelity Life chair Brian Blake said the $400 million Westpac Life deal was one of the most significant events in the company’s history. Once the transaction is completed, Ngāi Tahu Capital will become a major shareholder of Fidelity Life, alongside the NZ Super Fund.
“As well as strengthening our New Zealand-owned credentials and providing greater access to capital, having two iconic New Zealand investors on our share register sends a strong signal to the market about the quality and potential of Fidelity Life,” Blake said.
Melissa Cantell, who became the insurer’s CEO in January, said she was pleased with the firm’s achievements and was looking to the future with confidence.
“We’ve worked hard this year and put strong foundations in place,” Cantell said. “We continued to invest in our transformation, while at the same time delivering an underlying result which shows our core business of providing life insurance to New Zealanders is performing well. Looking to the future, there’s a lot to be excited about as we work towards our aspiration to reimagine life insurance. Completing our technology build and the game-changing acquisition of Westpac Life will be key, as will ensuring we maintain our relentless focus on our customers.”