Fidelity Life marks 50th year with improved results | Insurance Business New Zealand
Life & Health
Fidelity Life marks 50th year with improved results
Company is also focused on finalising the simplification of its business, chair says
Life & Health
Kiwi insurer Fidelity Life marked a pivotal return to profitability and dividend payouts, largely propelled by the substantial contribution from its Fidelity Insurance subsidiary which it acquired from Westpac Group in 2022.
Presenting its annual results for the year concluded on June 30 to shareholders, Fidelity Life disclosed a transformation in total comprehensive income on a statutory basis. The previous fiscal year reported a loss of $24.0 million in FY22, which transitioned into a profit of $3.2 million in FY23 (net of tax).
Factoring in the government bond rate fluctuations, which had an impact of $15.8 million (net of tax and hedging), the core life insurance business of Fidelity Life displayed significant improvement. Underlying profit surged from $4.6 million in the preceding year to $19.0 million in FY23 (net of tax).
The company said that this improved performance following the acquisition was expected, attributing it to extensive business growth and a robust capital position. Notably, insurance premium revenue witnessed a notable upsurge, escalating by 33% from $338.4 million in FY22 to $450.3 million in FY23. Simultaneously, claims expenses also grew by 27%, rising from $164.6 million in FY22 to $209.7 million in FY23 (net of tax).
Meanwhile, transformation expenses totalled $37.4 million in FY23, an increase from $20.1 million in FY22. Specifically, $16.2 million of the FY23 transformation expenses pertained to the ongoing integration of Fidelity Insurance (net of tax).
Shareholders of Fidelity Life, including the NZ Super Fund, Ngāi Tahu Holdings, and the Fidelity Family Trust, reaped the benefits with a full-year dividend of $8.013 per share. Notably, the dividend remains unimputed, reflecting the group’s strategic use of brought forward tax losses.
“2023 is a special year for Fidelity Life as we look back on our achievements since Gordon and Shirley Watson realised their vision to establish a New Zealand life insurance company in 1973. We expected the benefits of our Westpac Life acquisition to start materialising in FY23, and that’s proven to be the case. Our performance shows the business is in good shape and proving resilient against a weak economy and the high cost-of-living,” Fidelity Life chair Brian Blake (pictured above) said.
“The power of financial advice and insurance protection, combined with our community and environment efforts, mean we can continue making a real and lasting difference to New Zealand and New Zealanders,” Blake said.
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