ReAssure Group PLC ReAssure delivers strong 2019 performance (6956G)

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RNS Number : 6956G

ReAssure Group PLC

19 March 2020

19 March 2020

ReAssure Group plc

ReAssure delivers strong 2019 performance

ReAssure Group plc ("ReAssure"), a leading UK closed book life insurance consolidator, today provides a trading and performance update for the year ended 31 December 2019.

Financial highlights

2019 outperformed adjusted guidance(1)

   --    Solvency II surplus generation up GBP476m to GBP290m; 2018: GBP(186)m 
   --    Solvency II ratio2 up 10ppt to 155%; 2018: 145% 
   --    Solvency II headroom(2) up GBP0.4bn to GBP1.6bn; 2018: GBP1.2bn 
   --    Proforma Assets under administration3 up GBP12bn to GBP81bn; 2018: GBP69bn 
   --    Fitch Rating A+ with stable outlook(4) 
   --    Operating profit up 57% to GBP406m; 2018: GBP258m 

Strategic and operational highlights

Customer focus unwavering against a backdrop of significant change and strategic growth

   --    Customer satisfaction increased 5ppt to 91%; 2018: 86% 

-- Completed acquisition of Quilter plc's UK Heritage life and pensions business for GBP425m total cash consideration; expected to achieve c.GBP200m synergies largely cost efficiencies and capital benefits, an IRR of >11% with a payback period of 4 years

-- Legal & General Mature Savings book is currently expected to transfer to ReAssure in H1 2020 to facilitate a smooth transition and as a result of a cautious approach to the approval process; expected to have c.+8ppt impact on Solvency II ratio

Management actions

Clear progress on de-risking the balance sheet and enhancing value

   --    BBB exposure reduced 6ppt to 26%; 2018: 32% 
   --    Private debt assets now 9% of asset portfolio; 2019: GBP1.6bn; 2018: 7%, GBP1.2bn 
   --    Expanded into non-GBP assets, now 4% of asset portfolio; 2018: <1% 

-- Balance sheet actions to reduce volatility include expansion of equity and interest rate hedging programme which means that recent market dislocation has had minimal impact on capital position(5)

Mark Hodges, Chief Executive Officer of ReAssure, commented:

'I am delighted to announce strong full year results for ReAssure today. Our year end capital position has grown as expected despite the turbulent market conditions and our in-force book has delivered resilient, predictable surplus generation.

We made great progress in delivering our strategy and management actions and I am pleased we continued to improve our sector-leading customer satisfaction metrics throughout the year. I'd like to thank all my colleagues for their continued energy and hard work.

In 2020, we are focusing on continuing to deliver a strong performance. This will best position a combined ReAssure and Phoenix business to add value to shareholders and customers alike.'

Footnotes:

(1) Listing Particulars Guidance for the year GBP450-550m included anticipated benefit of the Legal & General Group plc's ("L&G") Mature Savings book Part VII delayed to H1 2020 and did not include the impact of the self-funded Quilter plc's UK Heritage life and pension acquisition

(2) On a shareholder basis proforma for reorganisation and before the L&G's Mature Savings acquisition

   (3)   Proforma to include GBP29bn L&G's Mature Savings assets (2018: GBP28bn of assets) 
   (4)   Fitch Rating for ReAssure Limited.  ReAssure Group plc rated A by Fitch. 
   (5)   Solvency II sensitivities before management actions set out in Listing Particulars 

[ends]

Notes to editors:

1) ReAssure Group plc: ReAssure is a leading UK closed book life insurance consolidator. The group focuses exclusively on the acquisition and management of closed book life insurance policies, with a mission to secure and improve customer outcomes for its policyholders.

2) Swiss Re agreement to sell ReAssure Group plc: On 6 December 2019, Swiss Re announced an agreement to sell its subsidiary ReAssure Group plc to Phoenix Group Holdings plc. The transaction is expected to close in mid-2020, subject to receipt of regulatory and anti-trust approval. For more information, please visit www.reassuregroupplc.co.uk .

Forward looking statements

This announcement may contain certain forward-looking statements, including as to plans, goals, trends and expectations relating to future financial condition, performance and results, which describe ReAssure's current expectations of future events based on certain assumptions, and include any statement that does not directly relate to a historical fact or current fact. By their nature, forward-looking statements involve uncertainty and unknown risks because they relate to future events and circumstances which are beyond ReAssure's control, including, among others, UK domestic and global economic and business conditions, market-related risks such as fluctuations in interest rates and exchange rates, the policies and actions of regulatory and governmental authorities, the impact of competition, the timing impact of these events and other uncertainties of future acquisitions or combinations within relevant industries. As a result, the group's actual future condition, performance and results may differ materially from the plans, goals and expectations set out in these forward-looking statements and persons reading this announcement should not place undue reliance on forward-looking statements. These forward-looking statements are made only as at the date on which such statements are made and ReAssure does not undertake to update or revise forward-looking statements contained in this announcement or any other forward-looking statement it may make.

Further information

ReAssure Group plc

   Laura Doyle, Head of Investor Relations                                       [phone] 

[e-mail]

Brunswick Group

Eilís Murphy [phone] [e-mail]

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March 19, 2020 03:00 ET (07:00 GMT)