Insurer Chesnara plans 'mini Resolution' consolidation drive

Chesnara is planning a ‘mini Resolution’-style industry consolidation drive after reporting a 54% increase in pre-tax profits.

The small-scale listed life insurer, which until recently specialised in combining closed books of business, said it plans to target both open and closed books of business in the UK.

In July it bought an open life company in Sweden called Monderna.

Chief executive Graham Kettleborough shrugged off comparisons with Pearl, preferring to see his company as a ‘mini Resolution’.

Kettleborough said that Chesnara plans to target life companies worth up to £200 million in embedded value. He highlighted the recent acquisition of Lincoln National by SunLife of Canada as the sort of transaction it was considering.

‘We’re looking further down the value chain and we can see further opportunities in the UK in closed or partially open books,’ he said.

Kettleborough said that increased media speculation around Cowdery’s firm and the expected impact of Solvency II regulations had increased the number of acquisition opportunities in the marketplace.

‘We don’t consider ourselves totally closed,’ he said. ‘We aren’t averse to open books.’

In the six months to 30 June 2009, the company reported profits on a European Embedded Value basis of £10.2 million against a loss of £4.7 million in the previous year.

Kettleborough said that the company had cash of £15 million for acquisitions, with the rest of the investments coming from debt and private equity.

Shares in the company were up 6p (3.68%) to 169p at 14.53.