Snapping up an apparent bargain, UK insurer Chesnara has
acquired Swedish life insurer Moderna Life for SEK250 million
($29.5 million).
The cash consideration represents a 63 percent discount to
Moderna Life’s embedded value of SEK670 million at the end of 2008,
Chesnara estimates.
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Chesnara CEO Graham Kettleborough said: “In my opinion, this is a
high-quality business which is well positioned in the market, which
we have bought at an attractive price.”
Moderna Life is being bought from Moderna Finance a unit of
Iceland’s third-largest bank, Glitnir Bank, in which the Icelandic
government bought a 75 percent stake in a rescue move in September
2008. Moderna Finance recently sold its general insurance unit to
TrygVesta, Denmark’s largest general insurer.
Established in 2002, Moderna Life is a unit-linked life insurer
specialising in group and personal pension arrangements and life
assurance policies. Primarily it aggregates client funds into a
range of investment providers and provides policy wrappers.
Selling via the independent financial adviser channel, Moderna Life
has about a 9 percent share of Sweden’s unit-linked pension market.
The insurer also operates in Norway.
In 2008, Moderna Life reported an operating income of SEK152.1
million and a pre-tax loss of SEK31.1 million. Gross assets were
SEK7.84 billion including SEK6.64 billion to cover its 74,000
in-force unit linked policies.
Chesnara is the holding company of Countrywide Assured, a life
insurer spun-off from UK property company Countrywide in 2004 and
substantially closed to new business. In 2008, Chesnara reported a
pre-tax profit of £22.7 million ($33 million), down from £27.7
million in 2007, and total assets of £1.68 billion.
Chesnara continues to seek acquisitions, particularly in the UK
closed life book market where it targets deals value at between £50
million and £200 million.
