Fidelity Life has reported $22.5 million in underlying profit for the 2021 financial year, an increase from $20.3 million in 2020.
The locally owned life insurer highlighted strong levels of new business as a key driver of profit growth, with new policies resulting in a $6.1 million uplift in net premium. It also noted “fewer than expected policy lapses,” with more customers choosing to retain their cover year on year.
Fidelity Life paid out $130.8 million in claims compared to $139.7 million in 2020. It also highlighted its $400 million deal to purchase Westpac Life, a transaction that chair Brian Blake said was “one of the most significant in the company’s history.”
“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.
“Simply put, this is a game changer for Fidelity Life. It means we’ll be able to leverage the investments we’re already making in our customer experience, data and technology, as well as our uniquely New Zealand brand, to help deliver growth and achieve our transformation goals.”
Fidelity Life also went through a year of significant change in terms of its leadership team, having welcomed CEO Melissa Cantell in January 2021, and announced further changes to its executive team in April.
Cantell said that her key priorities throughout the year have been to drive Fidelity Life’s technological transformation, to progress the acquisition of Westpac Life, and to ensure that Fidelity’s future is fully customer-oriented.
“Looking back on my first six months as CEO, I’m delighted with what we’ve achieved,” Cantell said.
“More importantly however, we’ve put some important foundations in place that set us up for a successful future focused firmly on our customers. With the progress we’ve made this year in areas such as technology, planning our office move, and most significantly, the acquisition of Westpac Life, it’s safe to say that this goal has been well and truly achieved.”
“Successfully achieving our transformation will also depend on having the right leaders in the right roles,” Cantell added.
“In April we announced some changes to our executive team structure, which are all about enabling us to transform more quickly and sustainably, and to reflect our aspiration to be truly customer led.”
Looking ahead to the next year, Cantell said she plans on continuing Fidelity Life’s transformation journey, and the insurer will also be preparing for the vast regulatory changes that will be coming into force over the next several years.
She said ongoing adaptation to COVID-19 would also be a priority, with customer support and support for staff working from home being the key focus areas.
“On top of delivering key transformation projects, we’re also planning for two significant regulatory changes due to take effect from 2023 - the new IFRS 17 accounting standard, and mandatory climate change reporting,” Cantell said.
“On the latter, an early piece of work currently underway is an assessment of our carbon footprint, and we are committing to a programme to reduce it over time.”
“Since the emergence of COVID-19 in early 2020, we’ve provided financial hardship support to more than 860 customers, with 80% of these policies remaining in force as of 30 June 2021,” she said.
“The ongoing 2021 lockdown is a timely reminder that the virus remains a very real risk. However, the work we’ve done to ensure our people can work effectively from home, providing continuity for our customers and our partners - and the nature of our reinsurance cover - means we’re well placed to withstand future disruptions.”
“Despite everything we’ve achieved so far, we remain bold and ambitious,” Cantell concluded.
“Our future success will be determined by a relentless focus on our existing and new customers. Taking our lead from what our customers, consumers, partners and people expect of us, we’ll be exploring ways to be more community and environment aware, and to ensure that we contribute to a sustainable future for all New Zealanders.”