tmmonline.nz  |   landlords.co.nz        About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds

NZ's Financial Adviser News Centre

GR Logo
Last Article Uploaded: Friday, July 10th, 9:53AM

Insurance

rss
Latest Headlines

Partners Life profit flat on back of continued growth

Partners Life has reported a flat profit for the year to March 31, even though premium revenue has continued to grow.

Tuesday, August 1st 2017, 2:19PM

The company has reported underlying insurance profit of $12.46 million, slightly down on last year’s record $12.57m.

Chief financial officer Sean Kam described the previous year’s profit as “exceptional” and said this year’s, although flat, was still “good”.

Kam says the key difference in the results is due to changes in economic assumptions, based on rising interest rates.

He says last year’s record result was buoyed by significant positive claims experience relative to expectations. Claims experience in the current year was also positive, but not to the same extent.

He said because Partners was a young company with a relatively small book of business there would be volatility in its claims experience.

As the company matures the claims experience will be less volatile, he says.

“Overall the company was performing well with good growth rates, good claims experiences and lapses running at lower levels than average industry rates,” he says.

Premium revenue was up 23.68% to $171.5m; $41m of this was API from new business.

On the commission front Partners Life paid out $58.1m in upfront commissions compared to $57m in the previous year.

Kam says that doesn’t mean the company is paying lower commission to advisers.

Its “maintenance costs” which include trail commissions increased by $4.08m, which is a 30.36% increase to $17.28m.

Kam also said the company was efficient compared to its older competitors.

“We are 35% more efficient than the average in the market,” he says.

Partners also performed well in terms of lapses. Based on Financial Service Council figures Partners was running at around 10.8% compared to an industry average of 11.9%.

He says the peak lapse rate period was when policies had been on the book for three to four years. This is “when we are most exposed to replacement".

Partners didn’t issue any Shadow Shares in the most recent financial year, but it has restarted the scheme recently.

Shadow Shares are deferred cash commissions which are linked to the increase in the value of Partners Group Holdings share price, rather than actual shares in the company.

The size of the deferred commission pay-out is linked to the quality of each qualifying tranche of business, with significant pay-out enhancements for higher persistency outcomes.

At March 31, 2016 shadow shares were valued at $4 each and 12 months later the value was assessed at $4.25.

Partners Life managing director Naomi Ballantyne said there were a number of key milestones reached during the year.

"We achieved three significant $200m milestones; $207m of in-force premiums, $200m of claims paid since our inception in 2011, and a $200m capital commitment from the Blackstone Tactical Opportunities Fund.”

As in previous years, Partners Life measures its accounting performance based on its underlying insurance profit rather than comprehensive income, which is influenced by fluctuations in economic assumptions (e.g. market interest rate or inflation movements) which are beyond the company’s control.

Partners Life’s core underlying insurance profit was $12.5m, in line with last year’s record result which was buoyed by significant positive claims experience relative to expectations. Claims experience in the current year was also positive, but not to the same extent.

The first tranche of Blackstone’s capital was received in September 2016, and has strengthened Partners Life’s financial position, with total assets up 24% to $546m, and in a solvency margin of $73.5m, 150% of the minimum required by regulator the Reserve Bank.

 

Tags: financial advisers FSC interest rates Naomi Ballantyne Partners Life Reserve Bank

« EDRs: Here's how to protect yourself from churn claimsInsurers worry about change: Report »

Special Offers

Comments from our readers

No comments yet

Sign In to add your comment

 

print

Printable version  

print

Email to a friend
Insurance Briefs

Less stressed during lockdown
New Zealander’s health and wellbeing had surprising benefits from the Covid-19 lockdown.

Southern Cross supports new safe haven for at-risk pets
Southern Cross Pet Insurance has teamed up with Pet Refuge to provide temporary shelter for animals affected by family violence.

nib Foundation supports Lifeline to the tune of $150,000
To support the growing mental health needs of Kiwis emerging from the Covid-19 pandemic, Lifeline Aotearoa has increased its service capacity thanks to a $150,000 grant from nib foundation, the charitable arm of nib New Zealand (nib).

Southern Cross halves staff numbers
Southern Cross Travel Insurance is slashing its staff numbers from 90 to 45 people.

News Bites
Latest Comments
Subscribe Now

Cover Notes - Specific news aimed at risk advisers

Previous News

MORE NEWS»

Most Commented On
About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox
 
Site by Web Developer and eyelovedesign.com