TIDM37PB
RNS Number : 0487B
Pension Insurance Corporation PLC
27 January 2020
PENSION INSURANCE CORPORATION GROUP
2019 TRADING UPDATE AND PROPOSED
GBP750 MILLION EQUITY RAISE
London, 27 January 2020 - Pension Insurance Corporation Group
Limited(2) ("PICG" or the "Company"), ultimate parent company of
Pension Insurance Corporation plc ("PIC"), the specialist insurer
of defined benefit pension schemes, today provides a preliminary
update on the Group's financial performance for 2019. PICG also
announces that it is planning to issue up to GBP750 million of new
equity to support the continued growth of PIC in the pension risk
transfer market (the "Capital Raise").
PIC had an outstanding year in 2019, exceeding its previous new
business record with GBP7.2 billion of new business concluded
(2018: GBP7.1 billion), for clients including British American
Tobacco, Marks & Spencer and Somerfield. The pension risk
transfer market was, and remains, exceptionally buoyant, with total
liabilities insured also reaching a new high in 2019. Strict
underwriting discipline has ensured a very good set of financial
results and the Group is well positioned to deliver for all our
stakeholders.
PICG 2019 preliminary unaudited trading highlights:
- 15 new business transactions with total premiums of GBP7.2
billion (2018: GBP7.1 billion), a record for the period. PIC is in
exclusivity on nearly GBP3 billion of pension de-risking
transactions and there is a market-wide pipeline of new business
amounting to more than GBP40 billion of pension scheme
liabilities
- GBP40.9 billion in financial investments (FY2018: GBP31.4 billion)
- Market Consistent Embedded Value (MCEV) of GBP3,874 million (FY2018: GBP3,638 million)
- Adjusted Equity Own Funds(3) of GBP4,504 million (FY2018: GBP4,174 million)
- IFRS Net Asset Value of GBP3,215 million (FY2018: GBP2,457 million)
- Solvency Capital Ratio of 164% (FY2018: 167%)
- 81% of longevity exposure reinsured
- 225,000 pension fund members insured in total (2018: 192,100)
- In February 2019, PIC was affirmed an Insurer Financial Strength credit rating of A+ by Fitch
Business highlights:
- GBP1.9 billion invested in areas such as social housing,
renewable energy and the UK's universities (2018: GBP2.5
billion)
- 99.5% of policyholders surveyed have indicated that they are
satisfied or better with our customer service; 83.9% gave us
maximum score
- PIC attained "Investor in People" status; won the "UK Customer
Commitment" award from the Institute of Customer Service; was named
"Insurer of the Year" at the Risk Awards; and won the "Risk
Management Firm of the Year" award at the European Pensions
Awards
Tracy Blackwell, Chief Executive Officer of PIC, said: "2019 was
a year of rapid, profitable growth for PIC, building on an
excellent 2018. Over the past two years our financial investments
have grown by 60%, policyholder numbers by 35%, employee numbers by
50% and we have invested more than GBP4 billion in areas such as
social housing, renewable energy and university education, whilst
maintaining underwriting discipline and a robust balance sheet.
There remains a significant opportunity in the UK's pension risk
transfer market and this Capital Raise will position PIC well to
help trustees de-risk their pension liabilities."
- ends -
Notes to Editors:
1) The 2019 numbers presented are preliminary and have not been
audited. As such, there remains a risk that the final audited
numbers are different, and potentially materially so. The Group
expects to provide audited FY 2019 results in early March 2020
2) The Pension Insurance Corporation Group (the "Group")
includes PICG, the group holding company; PIC, the group regulated
insurer; and Pension Services Corporation Ltd, the group service
company.
3) Adjusted Equity Own Funds is calculated as Solvency II own
funds deducting hybrid debt (including Restricted Tier 1 debt) and
removing the impact of the Risk Margin and the Transitional
Measures on Technical Provisions (TMTP's)
4) These preliminary financials are presented excluding the benefit of the proposed capital raise
5) Part of the funds are expected to be made available on issue
of the shares which shall be partly paid up at the time of issue.
PICG will be able to call for the unpaid amount as needed to meet
market demand for pension risk transfer
6) The group issued GBP450m of Restricted Tier 1 debt in 2019
which is accounted for under IFRS as equity and therefore increases
IFRS net assets by a similar amount.
7) Summary of preliminary, unaudited Key Financial Metrics for 2019 (GBP million where relevant):
PICG (unless indicated otherwise): FY2019 FY2018
Embedded value (MCEV) 3,874 3,638
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Own funds* 4,844 3,917
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Adjusted Equity Own Funds* 4,504 4,174
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Solvency capital requirement* 2,954 2,343
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Solvency ratio* 164% 167%
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New business premium 7,186 7,150
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Financial investments 40,886 31,371
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IFRS net asset value 3,215 2,457
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*Refers to PIC plc
For further information please contact:
PIC Jeremy Apfel +44 (0)20 7105 2140
apfel@pensioncorporation.com
Teneo Douglas Campbell +44 (0)20 3757 9247
douglas.campbell@teneo.com
About PIC
The purpose of PIC is to pay the pensions of its current and
future policyholders. PIC provides secure and stable retirement
incomes through leading customer service, comprehensive risk
management and excellence in asset and liability management. At 31
December 2019, PIC had insured 225,000 pension scheme members and
had GBP40.9 billion in financial investments, accumulated through
the provision of tailored pension insurance buyouts and buy-ins to
the trustees and sponsors of U.K. defined benefit pension schemes.
Clients include FTSE 100 companies, multinationals and the public
sector. PIC is authorised by the Prudential Regulation Authority
and regulated by the Financial Conduct Authority and Prudential
Regulation Authority (FRN 454345). For further information please
visit www.pensioncorporation.com
No Offer or Invitation and Selling Restrictions
This announcement does not constitute or form part of, and
should not be construed as, an offer or invitation to sell any
securities, or the solicitation of an offer to subscribe for or
purchase any securities, and nothing contained herein shall form
the basis of or be relied on in connection with any contract,
investment or commitment whatsoever.
This announcement is not intended for release, publication or
distribution to a person located or resident in any jurisdiction
where it is unlawful to release, distribute or publish this
document. The securities referred to herein have not been and will
not be registered under the U.S. Securities Act of 1933, as
amended, and may not be offered or sold in the United States,
except pursuant to an available exemption from registration.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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