REG - Chesnara PLC - Final Results
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RNS Number : 7791X Chesnara PLC 24 March 2026
24 March 2026
LEI Number: 213800VFRMBRTSZ3SJ06
Chesnara plc (CSN.L)
("Chesnara" or "the Company")
DRIVING STRATEGIC CHANGE, BUILDING FUTURE CASHFLOWS.
Chesnara reports its 2025 full year results, demonstrating a period of
transformational strategic delivery with two major acquisitions announced over
the past 12 months. Performance was underpinned by disciplined operational
delivery alongside the impact of exceptional capital markets activity
undertaken during the year, with significant year‑on‑year growth across
our key performance indicators. The Group's updated financial metrics are used
for the first time in these results, to support clearer understanding of the
Group's performance and to facilitate comparison with peers.
CASH:
o Operating Capital Generation(1) (OCG) of £94m, up 19% (FY 2024: £79m)
o Cash Remittances(2) of £58m, up 30% (FY 2024: £45m)
CAPITAL:
o Solvency Coverage Ratio of 257%, up 54 percentage points (FY 2024: 203%)
o Own Funds of £859m, up 34% (FY 2024: £643m)
VALUE:
o Adjusted Operating Profit(3) (AOP) of £56m, up 42% (FY 2024: £39m)
o Assets under Administration(4) (AUA) of £15bn, up 10% (FY 2024: £14bn)
MAJOR STRATEGIC MILESTONES ACHIEVED:
o HSBC Life (UK) acquisition completed in January 2026, with the business
rebranded as Chesnara Life, marking Chesnara's largest transaction and
substantially increasing the scale of the Group.
o Acquisition of Scottish Widows Europe SA announced in February 2026,
adding ~€1.7bn of AUA and ~46,000 policies, and creating a foothold in
Luxembourg for future European consolidation.
o UK integrations, including Chesnara Life, progressing well.
o Dutch entities successfully merged, simplifying our footprint.
o Successful £140m equity raise with strong shareholder support.
o £150m RT1 bond raise at an attractive coupon.
In line with the announcement made at the time of the HSBC Life (UK)
acquisition, the Board is recommending a 6% increase in the final dividend to
14.80p per share. Total dividend for FY 2025 of 22.50p per share.
Commenting on the results and outlook, Steve Murray, Group CEO, said:
"The Group has delivered strong financial results alongside two material
deals, the acquisition of HSBC Life (UK) Ltd which completed in January 2026
and the proposed acquisition of Scottish Widows Europe SA. These deals are
expected to significantly increase the Group's scale and longer-term Operating
Capital Generation potential. And we continue to see further opportunities
to grow, with a positive M&A pipeline and a great track record of
disciplined execution."
A full year results presentation will be held at 9:30am on 24 March 2026 -
participants can register here
(https://stream.brrmedia.co.uk/broadcast/6968a6a221449c0013b764d7) .
Further details on the financial results are as follows:
2025 FULL YEAR FINANCIAL AND STRATEGIC HIGHLIGHTS
STRONG FINANCIAL DELIVERY AND 6% INCREASE IN FINAL DIVIDEND
FY 2025 FY 2024 % increase
CASH Operating Capital Generation (OCG) £94m £79m 19%
Cash Remittances £58m £45m 30%
CAPITAL Solvency Coverage Ratio 257% 203% 54ppts
Own Funds £859m £643m 34%
VALUE Adjusted Operating Profit (AOP) £56m £39m 42%
Assets under Administration (AUA) £15bn £14bn 10%
A comprehensive reconciliation of the Group's Alternative Performance Measures
(APMs) to GAAP metrics is provided within the Additional Information section
of the 2025 Annual Report and Accounts.
· CASH: Growth in OCG driven by robust operating performance in each
of our business units and capital optimisation actions in the UK and at Group
Centre. Sustained growth in OCG across our business units has driven strong
year-on-year growth in Cash Remittances from the business units to Group
Centre.
· CAPITAL: The Solvency Coverage Ratio of 257% is significantly
higher than the upper-end of the Group's operating range. This provides
ongoing capacity to pursue inorganic investment opportunities. The increase of
54 percentage points over 2025 was driven primarily by higher Own Funds from
positive operating and economic variances and the impact of the Group's equity
and debt issuances over 2025. The Group's solvency capital requirements
benefited from the implementation of mass-lapse and foreign exchange hedging
optimisation actions in the UK and the optimisation of foreign exchange
hedging arrangements at Group Centre. On a proforma basis for the impacts of
the recently completed Chesnara Life acquisition, we expect the Solvency
Coverage Ratio to reduce to ~180%, still comfortably above our operating
range; and we expect Own Funds to increase to ~£1bn.
· VALUE: Strong operating performance in each of our business units
has contributed to a 42% increase in AOP, with the insurance result benefiting
from the merger and simplification synergies in the Netherlands. The Group's
AUA has also benefited from strong custodian inflows in Sweden and
depreciation of GBP relative to the Swedish krona and the Euro. Post the
completion of the Chesnara Life acquisition, on a proforma basis we expect the
AUA of the Group to increase to ~£20bn.
MAJOR STRATEGIC MILESTONES ACHIEVED
It has been a transformational period for the Group. We announced two major
transactions, the completion of significant migration and restructuring
activity and capital optimisation initiatives including:
· Completion of the acquisition of HSBC Life (UK), rebranded as
Chesnara Life, in January 2026: Largest acquisition in Chesnara's history,
announced in July 2025. The deal was funded through a combination of
internal resources and a fully underwritten £140m equity raise, with a total
consideration of £247m. Integration activities began in 2025, and a Part VII
transfer is expected in 2027. The deal is expected to add £5bn of AUA, and
deliver £140m of Cash Generation over the first five years, transforming our
scale in the UK.
· Announcement of the proposed €110m acquisition of Scottish
Widows Europe in February 2026: Expected to add €250m Cash Generation,
€100m of which is in the first five years at a consideration of €110m.
This deal continues our M&A momentum and marks our entry into Luxembourg,
broadening continental European consolidation opportunities from a strong
platform. Expected to complete around the end of 2026.
· Other strategic actions in the year
o Dutch merger completed, simplifying the organisation and creating
efficiencies, with integration to complete in 2026.
o Continued delivery of the UK platform transformation programme, with
further migrations to SS&C completed.
o Successful completion of Chesnara's RT1 bond debut issuance raising £150m
at an attractive coupon, providing flexible financing capacity for future
M&A.
o £140m equity raise completed to fund the HSBC Life (UK) transaction,
receiving strong shareholder support.
o Admitted to the FTSE 250 in August 2025.
o Ongoing delivery of sustainability commitments, including publication of
the Group's first Climate Transition Plan in September 2025.
o New business growth, driven by increasing demand for our UK onshore bond.
Movestic also showed strong momentum, supported by expanded partnerships and a
new distribution agreement in Norway.
o We completed a number of capital management actions over the year. Key
actions include: extension of our existing mass lapse reinsurance arrangements
in the UK; introduction of a new FX hedge in the UK business; and renewal of
the Group's FX hedge.
o Updated our Financial Framework to simplify the investor story and align
to peers.
DIVIDEND DETAILS
· The recommended final dividend of 14.80p per share represents a 6%
increase on the prior year and is expected to be paid on 20 May 2026. The
ordinary shares will be quoted ex-dividend on the London Stock Exchange as of
2 April 2026. The record date for eligibility for payment will be 7 April
2026.
ANALYST AND INVESTOR PRESENTATION
· A presentation for analysts and investors will be held at 09:30am
GMT on 24(th) March 2026 at the offices of RBC Capital Markets, 100
Bishopsgate, London, EC2N 4AA, which will be available to join online and
subsequently be posted to the corporate website at www.chesnara.co.uk
(http://www.chesnara.co.uk) . To join the webcast, please register using the
following link here
(https://stream.brrmedia.co.uk/broadcast/6968a6a221449c0013b764d7) .
· Chesnara is also pleased to confirm that their management team
will host a second live interactive presentation on the Engage Investor
platform for retail investors, on 24(th) March 2026, at 3:30pm GMT. Chesnara
welcomes all current and interested retail investors to join and encourages
investors to pre-submit questions. Investors can also submit questions at any
time during the live presentation. Investors can sign up to Engage Investor at
no cost and follow Chesnara from their personalised investor hub. Register
interest in this event here
(https://www.engageinvestor.com/event/6978ab9549250aebb0fb9272) .
Investor Enquiries
Sam Perowne
Head of Strategic Development & Investor Relations
Chesnara plc
E - sam.perowne@chesnara.co.uk
Media Enquiries
Misha Bayliss
Teneo
T - +44 20 7427 5465
E - chesnara@teneo.com
Notes to Editors
Chesnara plc (CSN.L) is a FTSE 250 European life, pensions and investment
company with specialist expertise in consolidation. We now administer c1.4m
policies across the Group's business units of Countrywide Assured and Chesnara
Life (formerly HSBC Life (UK) Ltd) in the UK, Scildon in the Netherlands and
Movestic in Sweden. Following a three-pillar strategy, Chesnara's primary
responsibility is the efficient administration of its customers' life and
savings policies, ensuring good customer outcomes and providing a secure and
compliant environment to protect policyholder interests. It also adds value by
writing focused, profitable new business in the UK, Sweden and the Netherlands
and by undertaking value-adding acquisitions of either companies or
portfolios. Consistent delivery of the Company strategy has enabled Chesnara
to increase its dividend for 21 years in succession. Further details are
available on the Company's website (www.chesnara.co.uk
(http://www.chesnara.co.uk) ).
Notes
(1)Operating Capital Generation (OCG): OCG measures the amount of Solvency II
capital the Group generates from operational activities.
(2)Cash Remittances: Cash paid by our Business Units to the Group, primarily
consisting of dividends.
(3)Adjusted Operating Profit (AOP): AOP is IFRS profit before tax adjusted for
the impacts of economic volatility, amortisation and impairments of
intangibles, finance and restructuring costs and other non-operating items
which in the Directors' view should be excluded by their nature or incidence
to enable a full understanding of financial performance.
(4)Assets Under Administration (AUA): AUA reflects the value of the financial
assets that the business administers, as reported in the IFRS Consolidated
Balance Sheet.
The Board approved this statement on 23 March 2026.
CAUTIONARY STATEMENT
This document may contain forward-looking statements with respect to certain
plans and current expectations relating to the future financial condition,
business performance and results of Chesnara plc. By their nature, all
forward-looking statements involve risk and uncertainty because they relate to
future events and circumstances that are beyond the control of Chesnara plc
including, amongst other things, UK domestic, Swedish domestic, Dutch domestic
and global economic and business conditions, market-related risks such as
fluctuations in interest rates, currency exchange rates, inflation, deflation,
the impact of competition, changes in customer preferences, delays in
implementing proposals, the timing, impact and other uncertainties of future
acquisitions or other combinations within relevant industries, the policies
and actions of regulatory authorities, the impact of tax or other legislation
and other regulations in the jurisdictions in which Chesnara plc and its
subsidiaries operate. As a result, Chesnara plc's actual future condition,
business performance and results may differ materially from the plans, goals
and expectations expressed or implied in these forward-looking statements.
2025 FINANCIAL HIGHLIGHTS
OPERATING CAPITAL GENERATION (OCG)¹
£94M
2024: £79M
CASH REMITTANCES(2)
£58M
2024: £45M
SOLVENCY COVERAGE RATIO(3)
257%
31 December 2024: 203%
OWN FUNDS(4)
£859M
31 December 2024: £643M
ADJUSTED OPERATING PROFIT (AOP)(5)
£56M
2024: £39M
ASSETS UNDER ADMINISTRATION (AuA)(6)
£15BN (Δ)
31 December 2024: £14BN∆
(Δ) Includes impact of the second Canada Life portfolio acquisition, expected
to Part VII and migrate during 2026
IFRS PROFIT BEFORE TAX
£19M
2024: £21M
IFRS CAPITAL BASE(7)
£694M
31 December 2024: £449M
NOTES
Note that these results include the impact of the Rights and RT1 issuances,
but exclude the impact of Chesnara Life which completed in January 2026 and
the recently announced Scottish Widows Europe SA acquisition.
Items 1 to 7 below are Alternative Performance Measures (APMs) used by the
Group to supplement the required statutory disclosures under IFRS and Solvency
II (SII), providing additional information to enhance the understanding of
financial performance. Further information on these APMs can be found
throughout the Financial Review and in the APM appendix.
1. Operating Capital Generation (OCG) measures the SII capital that the
Group generates from operating activities.
2. Cash Remittances represent cash paid by our business units to Group
Centre, primarily consisting of dividends
3. Solvency is a fundamental financial measure which is of paramount
importance to investors and policyholders. It represents the relationship
between the value of the business as measured on a SII basis and the capital
the business is required to hold - the SCR. Solvency can be reported as an
absolute surplus value or as a ratio.
4. Own Funds is defined as Eligible Own Funds under the SII regime.
5. Adjusted Operating Profit is IFRS profit before tax adjusted for the
impacts of economic volatility, amortisation and impairments of intangibles,
finance and restructuring costs and other non-operating items which in the
Director's view should be excluded by their nature or incidence to enable a
full understanding of financial performance
6. Assets Under Administration (AuA) represents the sum of all financial
assets on the IFRS balance sheet.
7. IFRS Capital Base is IFRS net equity plus the consolidated Contractual
Service Margin (CSM) net of reinsurance and tax.
*In the UK, the final Prudential Regulation Authority (PRA) rules for Solvency
UK became effective from 31 December 2024. The new regime has been referred to
as 'Solvency II' throughout this report, in line with the name of the
prudential regime in PRA policy material.
NOTE ON TERMINOLOGY
Following the completion of the acquisition of HSBC Life (UK) Limited in
January 2026, the business was renamed Chesnara Life (UK) Limited, and is
referred to as Chesnara Life from the Strategic Report onwards.
CHAIR'S STATEMENT
"The Group has delivered a strong set of financial results, completed a
transformational acquisition and announced a second significant acquisition.
This has supported a 6% step up in the proposed final dividend, a Total
Shareholder Return of 43% for 2025 and reinforced our belief that the Group
can deliver sustainable long-term growth."
LUKE SAVAGE, CHAIR
Increase in the final 2025 dividend by 6%
I am pleased to report that we are proposing that our shareholders will
receive a final dividend of 14.80 pence per share, with the final dividend
increasing by 6% on the prior year, supported by the acquisition of HSBC Life
(UK), renamed as Chesnara Life following deal completion in January 2026. This
increase reflects our confidence in the financial benefits of this acquisition
and continues our impressive track record of continuous year-on-year dividend
growth since listing over 20 years ago.
Financial Strength
Our proposed dividend is again underpinned by strong levels of Operating
Capital Generation and the strengthening of our balance sheet in 2025, despite
a continued backdrop of volatile geopolitical and macro-economic factors.
Each of our operating divisions contributed to the Group's Operating Capital
Generation of £94m, an increase of 19% compared to the same period in 2024
and against a total dividend cost of £52m.
Our strong Solvency II Coverage Ratio of 257% remains significantly above our
normal operating range of 140% - 160% following the successful capital raises
during the year. The Group's diversified business model and our risk-based
approach to financial management is fundamental to providing financial
security to our customers. Our strong and resilient balance sheet continues to
provide us with considerable strategic flexibility to invest in our businesses
and pursue further M&A opportunities as they arise.
Operational Execution
Across the Group, our operating divisions have performed well in support of
the Group's key strategic priorities.
We have completed a transformational acquisition in the UK, with Chesnara Life
adding £5bn of Assets under Administration and expected to generate £140m
Cash Generation over the next 5 years and £800m of lifetime Cash Generation.
In July 2025 alongside the announcement of the proposed acquisition of HSBC
Life (UK) acquisition, we raised £140m of equity capital through a Rights
issue well supported by existing shareholders. We also extended the Group's
Revolving Credit Facility (RCF), increasing the facility to £150m and raised
£150m from the issuance of an RT1 bond, positioning us to pursue further
M&A opportunities and strategic activity. The Group has also entered the
FTSE 250, a strategic milestone reflective of the achievements in 2025.
In February 2026, we announced the proposed acquisition of Scottish Widows
Europe SA for €110m, at an attractive multiple of 64% of Eligible Own Funds
as at 31 December 2024. The Acquisition, another significant achievement for
the Group, is expected to deliver €250m of Cash Generation over the lifetime
of the policies held in the Scottish Widows Europe SA portfolio, with €100m
of this Cash Generation occurring in the first five years.
In the UK, Countrywide Assured continued to implement its Transition and
Transformation programme (T&T), consolidating policy administration,
finance, and investment processes onto a single platform managed by SS&C,
its strategic outsource partner with four migrations now complete. Planning is
also underway for the integration of Chesnara Life, following the completion
in January 2026.
In the Netherlands, we completed the legal merger of the Scildon and Waard
businesses, with planned further integration, significantly simplifying our
operating model in the Netherlands. In addition, Scildon's pension business
was transferred to Allianz, allowing us to focus on expanding the individual
life insurance portfolio.
In Sweden, we delivered strong growth in our custodian business, supported by
the development of new partnerships and continued diversification of our
distribution model. Overall, new business sales momentum remains robust,
driven by ongoing enhancements to our product range and the continued
digitisation of our service offering.
It has been another year of significant delivery across the Group and as ever,
I want to thank colleagues for their continued efforts and dedication.
Your Board
Throughout 2025, we maintained a strong focus on ensuring that the Group
benefits from a diverse range of skills and expertise across our Boards,
supporting effective governance and strategic decision-making.
Gail Tucker became an Independent Non-Executive Director in January 2025,
chairing the Audit & Risk Committee and joining the Nomination &
Governance Committee, following the departure of Jane Dale after completing
her nine-year term. Gail brings with her decades of experience in the finance
sector, further enhancing the Board's expertise and supporting robust
financial oversight.
In May 2025, it was announced that after three successful years with Chesnara,
Karin Bergstein stepped down as an Independent Non-Executive Director, and as
a member of the Board, Nomination & Governance Committee, and Audit &
Risk Committee. I would like to express my gratitude for her valuable
contributions and support during this time and wish her every success in the
future.
We welcomed Samantha (Sam) Tymms to the Board in June 2025. Sam brings
extensive experience as a Non-Executive Director and advisor to global
financial services businesses, adding significant capability and insight to
our organisation.
In addition, Sam has substantial regulatory expertise, which will further
strengthen our governance and support the Group's ongoing commitment to
effective oversight and compliance.
Purpose
At Chesnara, we help to protect customers and their dependents by providing
life, health, and disability cover and also provide savings and pensions
solutions to meet the future financial needs of our customers. These are
very often customers that have come to us through acquisition, and we are
committed to ensuring that they remain positively supported by us.
Maintaining our strong capital position and delivering strong and sustainable
financial returns will always remain of key importance. It underpins our
desire to offer compelling returns to our shareholders, to meet our debt
investor coupon payments and importantly, to ensure our customers can be
confident in the ongoing financial strength of our business.
We have always managed our business in a responsible way and have a strong
sense of acting in a fair manner, giving full regard to the relative interests
of all stakeholders. With this in mind, sustainability is a key part of the
strategy of the Group and we continue to balance our responsibilities across
the 3Ps - Profit, People and Planet. We are taking steps to further embed
sustainability and the management of sustainability-related risks and
opportunities into decision-making across the business. A key element of our
transition to become a sustainable Chesnara are our plans to decarbonise. We
published our first Climate Transition Plan in September 2025 which outlines
the steps we are taking to become net zero by 2050. Our Annual
Sustainability Report and Climate Transition Plan (available on the Chesnara
website) provides further details of our sustainability commitments, long-term
ambitions and the activities underpinning our sustainability strategy.
Summary
Our 2025 financial results demonstrate that Chesnara's diversified business
model continues to deliver strong Operating Capital Generation, sustained
value growth, and positive returns for shareholders.
We have had a successful year for M&A, and the outlook continues to be
positive, supported by a robust capital base and a clear ambition for growth.
We are well positioned to pursue further value-accretive acquisitions.
Luke Savage,
Chair
23 March 2026
CHIEF EXECUTIVE OFFICER'S REPORT
"The Group has again delivered strong financial results alongside two material
deals. The acquisition of HSBC Life (UK) Ltd and the proposed acquisition of
Scottish Widows Europe SA are expected to materially increase the Group's
scale and longer term Operating Capital Generation potential."
STEVE MURRAY, CEO
2025 saw the Group take a number of material steps forward whilst remaining
focused on driving delivery in our three areas of strategic focus, namely:
1. ensuring good outcomes for customers and investors whilst running our
in-force books efficiently and effectively;
2. seeking out and delivering value-enhancing M&A opportunities; and
3. writing focused, profitable new business where we are satisfied an
appropriate return can be made.
We have again delivered strong full year financial results with Operating
Capital Generation of £94m, and a continued strong Solvency Coverage Ratio of
257%. The acquisition of HSBC Life (UK), renamed as Chesnara Life following
deal completion in January 2026, is the largest deal in our history and will
transform the scale of our UK business. It is expected to add total lifetime
Cash Generation of over £800m with the addition of the business meaning the
Group now looks after c1.4m policies across the UK, Netherlands and Sweden
with c£20bn of AuA. We also welcomed an additional 206 colleagues to Chesnara
in January 2026. Our confidence in the long-term value that this acquisition
will bring to the Group, alongside our strong financial results in 2025 has
led to a proposed step up in the final dividend of 6% to 14.80p (Δ) per
share.
To support the acquisition, we raised £140m (before costs) of capital through
a strongly supported rights issue, followed by Chesnara joining the FTSE 250
for the first time on 18 August 2025, marking a major step since its 2004
listing. Post the rights issue, we secured £150m in Restricted Tier 1 debt at
a pre tax coupon of 8.5%, replenishing the Group's central resources available
for strategic development including acquisitions.
In February 2026, we announced the proposed acquisition of Scottish Widows
Europe SA, a clear further demonstration of our ability to execute on our
M&A strategy. The acquisition is expected to add €1.7bn of AuA,
approximately 46,000 in-force policies and cash generation of €250m over the
lifetime of the policies held in the Scottish Widows Europe SA portfolio, with
€100m of this cash generation occurring in the first five years. It also
marks our entry into Luxembourg, providing a new platform for in-market and
wider European consolidation and expansion.
We are pleased that another major financial institution, Lloyds Banking Group,
has chosen us to look after their policyholders. We look forward to welcoming
Scottish Widows Europe SA policyholders and new colleagues to Chesnara with
the completion of the acquisition expected around the end of 2026, subject to
customary regulatory approvals.
The estimated pro-forma position of the Group post these acquisitions is over
£1bn of Own Funds, which represents a near doubling over the last 5 years,
post the payment of c£160m of dividends over the same period and includes
capital raised of £490m.
The merger of our Dutch businesses this year also creates a more sustainable
combined business, simplifying the Group's structure and providing efficiency
and capital benefits.
Finally, we introduced new Alternative Performance Measures (APMs) which we
believe should be simpler for investors to understand whilst also being more
comparable with other listed peers. These metrics reduce the short term
volatility that can arise from market movements and adopting APMs such as OCG
that are more widely used across the industry. Tom introduces these measures
in his report, including how they help stakeholders better understand the
operating value drivers of the Group.
Operational delivery continues
We have seen positive progress across all areas of the Group.
The UK has continued to deliver on its Transition and Transformation (T&T)
programme. It has so far delivered four successful migrations to our new
operating platform managed by SS&C Technologies (SS&C) and is
leveraging AI to potentially accelerate future migration timelines.
Extensive work has already been conducted on the planned migration of the
HSBC Life (UK) Ltd business, now rebranded as Chesnara Life, onto our UK
operating platform. We expect this migration to be largely completed by the
end of 2026. We have confirmed that the Chesnara Life onshore bond will
remain open for new business and we see further opportunities to expand our
distribution partnerships in this space. And on protection, we have already
communicated to the market the close of this product area to new business.
In Sweden, the team expanded its custodian distribution network, partnering
with a savings platform targeting digital-only wealth builders in early 2025.
Following this, the division also announced a new partnership with a
traditional life insurer, enhancing occupational pension offerings with life
insurance solutions. And a new partnership has also been in established in
Norway, for the distribution of life and health products in the Norwegian
market. These collaborations will help diversify the Company's distribution
channels.
As mentioned above, in the Netherlands, the team completed the legal merger of
Scildon and Waard in July 2025 as part of plans to integrate our Dutch
businesses. 2026 will see us progress with the next phase of work aligning IT
systems, harmonising product portfolios, and streamlining organisation design
and wider governance where appropriate to improve scale and efficiency and
deliver synergies. Additionally, the disposal of Scildon's Defined
Contribution pension portfolio led to its migration to Allianz Benelux,
removing a product line that we felt was unlikely to generate an acceptable
longer term return.
Each of our businesses continues to serve our customers well. In Sweden,
enhancements to products and services have addressed the demand for tailored
solutions, including the introduction of the 'Pension Lab', which empowers
users to manage their pensions effectively. Scildon has continued to advance
its digital capabilities with notable improvements to both customer and
advisor portals. In the UK, further progress has been made on fair value
commitments, and customer terms have been improved through initiatives such as
the removal of exit charges.
Becoming a sustainable Chesnara
We continue to believe that becoming a more sustainable business and net zero
group remains in the best longer-term interests of all of our stakeholders,
including customers, staff, regulators, investors and the planet. Becoming
sustainable is dependent on a number of external factors. However, the
structures and processes we have put in place to embed sustainability into
decision-making gives us the foundation to successfully manage the risks and
opportunities that are presented by a changing world.
The Group's first Climate Transition plan was published in September 2025,
detailing the steps we will take to continue our journey to become a net zero
group by 2050. Alongside this, we will continue to take steps to embed
sustainability into decision-making across our business, guided by our
principles:
Do no harm. Do good. Act now for later.
We have also published our Annual Sustainability Report and this is available,
together with the Climate Transition Plan, on our website. Our Annual
Sustainability Report details our sustainability commitments, long-term
ambitions and the activities underpinning our sustainability strategy.
We delivered on M&A and further management actions
Over the past twelve months, we have announced two significant acquisitions:
Scottish Widows Europe SA announced in February 2026; and HSBC Life (UK) Ltd,
now rebranded as Chesnara Life, announced in July 2025 and completed in
January 2026. In February 2026, Chesnara was recognised by the PLC Awards,
receiving the coveted 'Transaction of the Year' award for the HSBC Life (UK)
Ltd acquisition.
The proposed acquisition of Scottish Widows Europe SA marks another
significant strategic milestone for Chesnara. As well as adding material
future cash generation potential, this transaction expands our presence in
Europe, broadening the opportunity set for future cross-border consolidation.
This supports the Group's strategy of being a leading European life and
pensions and investment company with specialist expertise in consolidation.
The acquisition is testament to our disciplined approach to M&A, as we
continue to identify opportunities that add genuine value for our customers
and stakeholders.
Alongside our M&A achievements, we have continued to implement management
actions to strengthen the Group's financial position, including mass-lapse
reinsurance and foreign exchange hedging arrangements. These actions
collectively enhance solvency resilience, reduce earnings volatility, and
support long-term stability.
Growth in new business
Scildon's new Mortgage Lifestyle proposition has driven growth in New Business
Contribution (NBC) throughout the year. Movestic delivered strong custodian
inflows through its expanded distribution network. In the UK, continued sales
of onshore bonds have maintained momentum, contributing to a Group New
Business Contribution (NBC) for the year of £12m. The addition of the
Chesnara Life onshore bond capability should provide us with opportunities to
increase the NBC going forward whilst ensuring the business we write continues
to make an appropriate return.
People changes
Luke has highlighted some of the Chesnara Board level changes we have made
this year. Alongside these Board developments, Al Lonie took up the role of
Group Company Secretary at the start of 2025 having served as my Chief of
Staff the previous year. His previous Company Secretarial experience
combined with his wider market experience will help ensure our plc governance
remains strong and fit for purpose as we look to further scale the business.
Emma Dawe joined Chesnara in April 2025 as Group General Counsel reporting
to me. Her arrival brings considerable legal and commercial expertise,
especially on M&A, and further strengthens the Group's Senior Leadership
Team and our wider internal M&A capabilities.
Gavin Hughes moved into the role of Group Chief Actuary at the end of 2025,
reporting to Tom Howard, having previously been in the role of Group Chief
Risk Officer. Following Gavin's move, we were pleased to welcome Niamh Carr
from WTW as Interim Group Chief Risk Officer, ensuring strong continuity of
risk leadership and further enhancing the Group's capability in managing risk
across all business areas. An open market search is well progressed for a
permanent Group Chief Risk Officer.
As part of the merger of our Dutch business, we also confirmed that Pauline
Derkman and Edwin Bekkering would continue as CEO and CFRO respectively for
the enlarged business. Both have already done an impressive job delivering the
first phase of the planned merger.
Also worthy of highlighting was Chesnara's position in the 2025 FTSE Women in
Leadership review published in February 2026. Gathering data from FTSE 350
organisations and eligible private companies, this review aims to improve the
representation of women on Boards and in senior leadership across the UK. In
its fifth year of being published, it is the first year Chesnara has been
included since entering the FTSE 250. The report ranks Chesnara first in
insurance, second overall in the FTSE 250 for women in leadership, and second
across the FTSE as a whole, with 56.7 percent representation across our
Executive Committee and their direct reports. This places us well ahead of the
Review's voluntary target of 40 percent representation by the end of 2025.
Outlook
2025 has marked another year of unprecedented events and wider market
volatility with shifting global trade dynamics and geopolitical developments.
Currency movements, particularly the weakness of the US dollar against most
European currencies, have also been a notable feature.
Against these conditions, Chesnara's business model continues to demonstrate
its resilience and ability to generate cash across a wide range of market
environments. We expect the addition of Chesnara Life and Scottish Widows
Europe SA to further support this resilience and materially enhance the size
of the Group and our longer term Operating Capital Generation potential. This
underpins our confidence in the Group's financial strength and ability to
deliver sustainable value for investors.
Looking into 2026 and beyond, we continue to see a very healthy pipeline of
acquisition opportunities and remain positive about the outlook for further
M&A. Our disciplined approach and strong capital position mean we are well
placed to execute value-accretive transactions. 2025 was a transformative one
for the Group and a year where our people have done a terrific job delivering
across our key strategic initiatives. Going forward, we have increased
confidence we can materially grow the group and deliver further value for our
investors.
Steve Murray,
Chief Executive Officer
23 March 2026
(Δ) Dividend per share has been rebased to reflect the Rights Issue bonus
factor of 1.15x applied to historical dividend per share metrics.
CHIEF FINANCIAL OFFICER'S REPORT
"2025 was a year of strong financial performance, delivered alongside
significant strategic and operational milestones for the Group. Our continued
momentum has driven growth in each of the metrics that underpin our updated
financial framework, and we are confident in the Group's longer-term
performance outlook"
TOM HOWARD, CFO
Overview
In 2025, the Group performed strongly across all of its financial framework
performance metrics. The Group reported growth of 19% in Operating Capital
Generation (OCG) and 42% in Adjusted Operating Profit (AOP).
The Solvency Coverage Ratio of 257% remains significantly above our operating
range of 140% to 160% and we expect the balance sheet to remain strong and
resilient following the completion of the Chesnara Life acquisition.
Following the announcement of the Scottish Widows Europe SA acquisition in
February, we expect the pro forma Solvency Coverage Ratio to remain above the
Group's operating range of 140%-160%. The Group's Leverage Ratio is also
expected to remain below our longer-term ambition of 30% or less.
This combination of balance sheet strength and operating performance leaves
the Group well positioned to invest in the business, pursue further accretive
M&A opportunities and continue to provide an attractive regular dividend
to our shareholders.
We have announced a 6% increase in the final dividend per share to 14.80p, the
21(st) consecutive year that the Group has increased returns to shareholders.
Δ Dividend per share has been rebased to reflect the Rights Issue bonus
factor of 1.15x applied to historical dividend per share metrics
Our Financial Framework
Our Financial Framework is designed to deliver long-term, sustainable growth
in cash, capital and value. In reporting the performance of the Group against
this framework, we use measures calculated in accordance with Generally
Accepted Accounting Principles ('GAAP') alongside Alternative Performance
Measures ('APMs') calculated on a non-GAAP basis.
CASH CAPITAL VALUE
Operating Capital Generation Solvency Coverage Ratio AuA
£94m 257% £15bn
FY24: £79m FY24: 203% FY24: £14bn
Cash Remittances Own Funds Adjusted Operating Profit
£58m £859m £56m
FY24: £45m FY24: £643m FY24: £39m
Final dividend
14.80p per share, up 6% year on year
To support the evolution of our financial framework, we have introduced the
following APMs
Operating Capital Generation (OCG)
OCG is the Solvency II surplus generated from underlying operating performance
across the Group. It provides a transparent measure of the Group's sustainable
Solvency II Surplus Generation by looking through fluctuations from short-term
market impacts and non-recurring costs associated with the Group's M&A
strategy and long-term investments into the business units. OCG has replaced
Cash Generation as the Group's primary measure of long-term Solvency II
surplus generation.
Cash Remittances
Cash Remittances are the cash paid by the business units to Group Centre for
the relevant reporting year. Over the long term, sustainable and increasing
OCG will increase the solvency surplus within the Group's business units,
supporting stronger levels of Cash Remittances to Group Centre. This will
support the Group's working capital requirements, investment and M&A
opportunities and capital returns to shareholders.
Adjusted Operating Profit (AOP)
AOP is a measure of the Group's IFRS performance using long term assumptions
for the Group's investment and insurance portfolios. It is less exposed to
short-term market volatility and so provides a more sustainable view of the
Group's ongoing earnings profile. It also provides an underlying view of the
Group's earning progression by omitting non-recurring items such as one-off
costs associated with the Group's M&A strategy.
These APMs enhance our financial framework by:
· providing enhanced disclosure of the Group's operational
performance;
· removing volatility from short-term market movements and
exceptional items to show the underlying; sustainable performance of the
Group; and
· aligning more closely with the APMs used by our peer group.
Operating Results
OCG increased by 19% to £94m (FY24: £79m) driven by robust operating
performance in each of our business units, and the impact of capital
optimisation actions in the UK business and at Group Centre.
Cash Remittances from the Group's business units increased by 30% to £58m
supported by the ongoing growth in OCG across the Group.
The Group remains strongly capitalised with a Solvency Coverage Ratio of 257%,
an increase of 54 ppts (FY24: 203%). This increase was driven primarily by
higher Own Funds from positive operating and economic variances and the impact
of the Group's equity and debt issuances over 2025. The Group's solvency
capital requirements were positively impacted by the implementation of
mass-lapse and foreign exchange hedging optimisation actions in the UK and
foreign exchange hedging arrangements at Group Centre.
Adjusted Operating Profit (AOP) increased by 42% to £56m (FY24: £39m)
primarily from robust operating experience within the Group's
insurance-classified portfolios. When including non-operating items, such as
investment variances and financing and restructuring costs, the Group's profit
before tax moved from £21m to £19m remaining broadly consistent year on
year.
Business Performance
UNITED KINGDOM
Own Funds increased by £10m (FY24: £29m) whilst the Solvency Capital
Requirement (SCR) reduced by £6m (FY24: decrease of £5m), resulting in a
Solvency Coverage Ratio of 155% (FY24: 182%). The growth in Own Funds arose
from both positive economic and operating results on the in-force book,
supported by the writing of profitable new business over the period. The
extension of mass-lapse reinsurance arrangements to include the Canada Life
portfolio (acquired in 2024) and the wider UK portfolio, along with the
implementation of a foreign currency hedge supported the reduction in SCR.
These actions contributed to an increased OCG result of £41m (FY24: £32m).
The AOP of £19m was 55% higher than the prior-year (FY24: £11m) with robust
operating performance partially offset by a lower insurance result from loss
components within the IFRS17 result and an IFRS Profit Before tax result of
£33m (FY24: £28m).The Solvency II surplus of £31m (FY24: £60m) remained
comfortably above the UK's Board risk appetite level and Cash Remittances of
£45m were 32% higher than the prior-year (FY24: £35m).
SWEDEN
Own Funds increased by £24m (FY24: increase of £15m) whilst SCR increased by
£20m (FY24: increase of £5m), resulting in a Solvency Coverage Ratio of 146%
(2024: 153%). Own Funds increased from positive equity market movements,
dampened by the negative impact of the depreciation of the US dollar relative
to the Swedish krona, particularly in the first half of the year. SCR also
increased due to higher market risk requirements. The Swedish business unit
held a Solvency II surplus of £37m (FY24: £40m) which is above its Board's
risk appetite level with Cash Remittances of £6m to Group Centre (FY24: £4m)
and OCG of £14m (FY24: £10m). AOP of £11m (FY24: £13m) arose primarily
from the investment result contribution and an IFRS Profit Before Tax result
of £5m (FY24: £10m) due to the actual investment return impact.
NETHERLANDS
Own Funds increased by £41m (FY24: £4m decrease) whilst SCR increased by
£6m (FY24: £7m decrease), with a closing Solvency Coverage Ratio of 265%
(2024: 237%). Own Funds and OCG of £36m (FY24: £30m) benefitted from the
cost synergies arising from the merger of the two Dutch entities. The
Netherlands business unit's Solvency II surplus of £89m (FY24: £75m) above
its Board's risk appetite levels with Cash Remittances to Group Centre of £7m
(FY24: £7m). Increased AOP of £23m, (FY24: £17m) benefited from lower loss
component experience relative to FY24 following the sale of Scildon's group
pension business, effective from September 2025, with an IFRS Profit Before
Tax result of £33m (FY24: £5m) positively impacted by economic returns.
Note all Own Funds and SII Surplus numbers above are quoted pre-foreseeable
Cash Remittances and the FY24 comparators for the Netherlands are the
aggregated amounts of the reported results of Scildon and Waard on a
pre-merger basis.
Cash & Capital
OPERATING CAPITAL GENERATION
£m FY25 FY24
UK 41 32
Sweden 14 10
Netherlands 36 30
Group Centre 3 7
Total 94 79
OCG of £94m provides 1.8x coverage of the Group's dividend cost, reflecting
the Group's ability to comfortably generate sufficient operational capital to
meet ongoing dividend costs with strong contributions from each business unit.
Management actions are an important component of our strategy to maximise
value from existing business and are included within the OCG measure. In 2025,
the UK business unit implemented a currency hedge, to enhance capital
efficiency relating to foreign exchange risk. The UK also extended existing
mass-lapse reinsurance arrangements to include the most recent Canada Life
portfolio acquisition and most recently the wider UK book. This will provide
the Group with further capital relief against the risk of extreme lapse
events. The Group has also renewed and rebalanced the Group's foreign exchange
hedge, releasing capital and generating OCG of £9m.
CASH REMITTANCES
FY25 FY24
Cash Remittances (£m) 58 45
Cash Remittances represent the cash paid from the Group's business units to
Chesnara Group Centre, with 2025 Cash Remittances of £58m (FY24: £45m). The
increase is driven by a strong Cash Remittance from the UK following the
execution of management actions.
SOLVENCY COVERAGE RATIO
Solvency Coverage Ratio FY 2024 203%
Operating Capital Generation 47%
Investment Variances (including FX) (25%)
Capital Raises (net of integration & restructuring) 54%
Tiering Restrictions (6%)
Dividends (16%)
Solvency Coverage Ratio FY 2025 257%
The Group's Solvency Coverage ratio has increased following the debt and
equity raises completed earlier in the year. The increase is also reflective
of OCG of £94m (FY24: £79m), driven by a combination of several factors.
These include: positive operational growth; cost savings efficiencies from the
merger of the Group's operating entities in the Netherlands; and the execution
of capital management actions within the UK business unit and at Group Centre.
OWN FUNDS
Own Funds at FY 2024 643
Operating Own Funds Generation 58
Non-operating Own Funds Generation 22
Capital Raises (net integration & restructuring) 208
Tiering Restrictions (19)
Dividends (52)
Own Funds at FY 2025 859
The Group's Own Funds have increased by £216m over the year largely due to
the capital raises in the year as well as robust operating performance, offset
with strategic expenditure, an increase in restrictions and shareholder
dividends.
Value
ADJUSTED OPERATING PROFIT
£m FY25 FY24
UK 19 11
Sweden 11 13
Netherlands 23 17
Group Centre 3 (2)
Adjusted Operating Profit 56 39
Non-Operating Adjustments (37) (18)
IFRS Profit Before Tax 19 21
Adjusted Operating Profit (AOP) of £56m (FY24: £39m) has been driven
primarily by the expected investment return on shareholder assets. It was also
impacted by the reversal of Scildon's Group pension loss component following
the completion of its sale to Allianz during the year, effective from 30
September 2025. AOP removes the impact of investment variances and one-off
project expenditure, such as M&A costs, to show a truer reflection of the
Group's operating performance.
IFRS CAPITAL BASE
£m
Capital Base FY24 449
Capital Raises (net of costs) 280
Adjusted Operating Profit 56
Non-operating adjustments (37)
CSM movement (4)
Tax (29)
Other comprehensive income 23
Shareholder Dividends (42)
Other (2)
Capital Base FY25 694
IFRS Capital Base increased by £245m over 2025 driven by the capital
issuances completed in July 2025. This was supported by business performance
with positive contributions from profitable new business activity and
portfolio growth following the Part VII of the Canada Life protection
portfolio.
LEVERAGE
FY25 FY24
Leverage % 22% 31%
Leverage* has reduced to 22% (FY24: 31%) following the Rights and RT1
issuances and positive business performance supporting the IFRS Capital Base.
This remains well below the Group's long-term ambition of 30% or less.
AUA
FY25 FY24
AuA (£bn) 15 14
The Group's AuA is now £15bn, which reflects strong custodian inflows in
Sweden and depreciation of GBP relative to the Swedish krona and the Euro. On
a pro-forma basis, AuA exceeds £20bn after allowing for the impact of the
Chesnara Life acquisition as at 31 December 2025.
Shareholder Dividends
The Group's continued strong financial delivery alongside the completion of
the Chesnara Life acquisition in January 2026 has supported the directors'
decision to recommend a 6% increase in the final dividend to 14.80p (Δ) per
share (2024 final rebased: 13.96p (Δ) per share). This will be the 21(st)
consecutive year that the Group has increased returns to shareholders.
Summary
The Group's continued focus on delivering its operational and strategic
priorities has driven strong financial outcomes across all key metrics during
the year.
The acquisition of Chesnara Life and Scottish Widows Europe SA are significant
strategic milestones for Chesnara, significantly enhancing the long-term
financial profile of the Group. In addition, the successful equity and debt
issuances have strengthened the Group's balance sheet providing additional
financial flexibility against the backdrop of an active and attractive market
for further M&A opportunities.
On a pro-forma basis, we anticipate the acquisitions will satisfy the
requirements of our capital allocation framework, with a pro-forma leverage
ratio of c20% and a Solvency Coverage Ratio of c180% post Chesnara Life, as at
31 December 2025. The two recent transactions have added more than £1bn of
future lifetime Cash Generation, and we are looking forward to integrating the
businesses and delivering increased value for our investors.
Tom Howard,
Chief Financial Officer
24 March 2026
(*) Leverage is presented in line with the Fitch basis of calculation. For
further information, please see Alternative Performance Measures in the
Additional Information section.
(Δ) Dividend per share has been rebased to reflect the Rights Issue bonus
factor of 1.15x app
STRATEGIC REPORT
BUSINESS REVIEW | UK
Countrywide Assured (CA) provides financial protection, ranging from pensions
and savings to life cover and critical illness benefit. CA writes new business
via its onshore bond proposition via third party platform links. and this
market position is expected to be further strengthened through the acquisition
of Chesnara Life in 2026.
- Operating Capital Generation £41m (FY24: £32m)
- Cash Remittances £45m (FY24: £35m)
- Solvency Coverage Ratio (pre foreseeable Cash Remittance) 156%
(FY24: 182%)
- Solvency Coverage Ratio (post foreseeable Cash Remittance) 130%
(FY24: 135%)
- Own Funds £118m (FY24: £130m)
- AuA £6bn (FY24: £6bn)
- Adjusted Operating Profit £19m (FY24: £11m)
MAXIMISE VALUE FROM EXISTING BUSINESS
CAPITAL AND VALUE MANAGEMENT
In line with its long-term strategy, CA continues to implement its
Transformation programme to consolidate policy administration, finance, and
investment processes onto a single platform managed by SS&C, its strategic
outsource partner. The programme is progressing positively with four books
migrated successfully over 2025. The second acquired book of onshore bond
business from Canada Life is scheduled to migrate and Part VII mid-2026.
CA executed several capital management initiatives during the year including
the extension of pre-existing mass-lapse reinsurance coverage on the in-force
portfolio, the application of new mass-lapse treaties to the onshore bond and
pension business acquired from Canada Life, and a foreign exchange currency
hedge to reduce exposure to US Dollar and Euro volatility.
CUSTOMER OUTCOMES
Delivery of good customer outcomes continues to be a core priority with a
focus on maintaining good service, delivering competitive fund performance and
ensuring fair value with clear communications and proactive support for more
vulnerable customers. In the last year, we have taken our fair value
commitments further and enhanced customer terms with a range of initiatives
including removing exit charges, capping charges on low value policies,
reducing risk charges and refreshing communications.
The focus remains on ensuring operational and financial resilience across all
core services and CA successfully met the March 2025 regulatory deadline to
confirm compliance with the new Operational Resilience requirements.
GOVERNANCE
Strong governance and constructive regulatory relationships remain fundamental
to achieving our strategic goals, with management maintaining a clear focus on
evolving and maintaining robust governance frameworks.
The business has also continued to drive forward its Sustainability Plan
delivering initiatives across social, operational, financial, governance and
reporting workstreams. A key area of focus has been supporting the publication
of the Group's first Climate Transition Plan which was issued in September
2025.
FUTURE PRIORITIES
- Ongoing delivery of the Transformation agenda. Continued
identification and implementation of capital management initiatives to
optimise Operating Capital Generation.
- Continued focus on strong customer service and delivering good
customer outcomes.
- Maintaining positive and constructive relationships with regulators
and continued compliance with relevant regulations.
- Continued support and implementation of the Group's Climate
Transition Plan and UK-based sustainability initiatives.
ACQUIRE LIFE AND PENSIONS BUSINESSES
The Group's acquisition of Chesnara Life (formerly HSBC Life (UK)) marks a
transformational milestone for the UK business, delivering significant scale
and efficiency benefits. The transaction will more than double the UK policy
count, and add £5bn of assets under administration, extending our presence in
the onshore bond market and with closed products that complement the UK's
existing portfolio.
Following the legal transfer of control in January 2026, the policy
administration, finance and investment processes of Chesnara Life will be
migrated to S&C Technologies with remaining functions integrated into the
UK business. It is anticipated a Part VII transfer will be completed by the
end of 2027.
The final stage of the Sanlam Life and Pensions (subsequently renamed to
CASLP) acquisition was delivered during the first half of the year, with CASLP
Ltd having been dissolved in January 2025.
FUTURE PRIORITIES
- Integration of the Chesnara Life business within the UK target
operating model.
- Continued development of a market leading approach to accelerated
migrations leveraging AI technology and increased automation.
- Continue to support the Group in the identification, assessment and
delivery of UK acquisitions.
- Continue to deliver strong financial outcomes from previously
completed acquisitions.
-
ENHANCE VALUE THROUGH PROFITABLE NEW BUSINESS
CA has continued to generate positive new business profits through increased
volumes of the on-platform onshore bond with New Business Contribution of £3m
(FY24: £2m) and APE of £16m (FY24: £13m). This continued growth reflects
our attractive proposition for customers coupled with increased market demand
for the product. The increased market demand is driven by reductions in
personal tax allowances over the last few years and inheritance tax on
pensions from 2027.
We are committed to supporting the adviser community and have enhanced the CA
website with a dedicated 'Adviser Hub' for the onshore bond that provides
detailed technical information, tax calculators and other helpful tools and
information.
There is continued interest from new platforms seeking to host the CA onshore
bond including the recently announced partnership with AJ Bell to distribute
its onshore investment bond via the AJ Bell Investcentre platform, broadening
adviser access to the Group's UK onshore bond proposition. We anticipate
further platform launches and strategic partners in 2026, supporting continued
growth in new business volumes.
FUTURE PRIORITIES
- Integration of Chesnara Life onshore bond into CA.
- Leveraging distribution synergies and strategic opportunities
between the Chesnara Life and CA onshore bond.
- Improved digital integration with platforms for customers and
advisers.
- Continued work to strengthen the advisor and customer proposition.
- Embedding new platform relationships and supporting all platforms
to increase flows into the product.
CHESNARA CULTURE AND VALUE PRINCIPLES
Responsible risk-based management for the benefit of all our stakeholders - Implementation and maintenance of robust risk management frameworks
and performance of stress and scenario testing to ensure resilience under
adverse conditions.
- Delivery of capital management actions including implementation of
a mass lapse reinsurance arrangement and a foreign exchange hedge designed to
mitigate the business's exposure to fluctuations in foreign currencies within
the unit-linked business.
Fair treatment of customers - Embedded FCA Consumer Duty requirements, ensuring clear, concise
communications and fair value assessments.
- Enhanced website accessibility tools and additional flexibility and
support for vulnerable customers.
Maintain adequate financial resources - Delivery of strong Operating Capital Generation to support of
Group's progressive dividend policy.
- Maintenance of strong capital solvency well above regulatory
minimums.
Provide a competitive return to - Continued support of Group's consistent dividend flow through
efficient management of closed books and cost control.
Investors
- Contribution to strategic acquisitions, enhancing long-term value.
Robust regulatory compliance - Successfully met the 31 March 2025 FCA deadline for Operational
Resilience compliance.
- Clear engagement with regulators during Part VII transfers and
acquisitions, maintaining constructive regulatory relationships.
A just transition to a sustainable group - Support of Group's first Climate Transition Plan, published
September 2025.
- Embedded sustainability principles "Do no harm, Do good, Act now
for later" into decision making, including our decisions in relation to our
offices and increasing operational footprint.
- Promoted community impact initiative including staff volunteering
charitable giving and involvement in internship schemes.
Responsible risk-based management for the benefit of all our stakeholders - Implementation and maintenance of robust risk management frameworks
and performance of stress and scenario testing to ensure resilience under
adverse conditions.
- Delivery of capital management actions including implementation of
a mass lapse reinsurance arrangement and a foreign exchange hedge designed to
mitigate the business's exposure to fluctuations in foreign currencies within
the unit-linked business.
BUSINESS REVIEW | SWEDEN
Movestic is a life and pensions business which is open to new business. It
offers personalised unit-linked pension and savings solutions, as well as life
and health products, directly through brokers and it's direct channel. It also
provides a custodian product via several private banks and is well regarded
across all client segments.
- Operating Capital Generation £14m (FY24: £10m)
- Cash Remittances £6m (FY24: £4m)
- Solvency Coverage Ratio (pre foreseeable Cash Remittance) 146%
(FY24: 153%)
- Solvency Coverage Ratio (post foreseeable Cash Remittance) 142%
(FY24: 151%)
- Own Funds £201m (FY24: £184m)
- AuA £7bn (FY24: £5bn)
- Adjusted Operating Profit £11m (FY24: £13m)
MAXIMISE VALUE FROM EXISTING BUSINESS
CAPITAL AND VALUE MANAGEMENT
Whilst policyholder investment performance benefited from strong global equity
market returns over 2025, this was offset by a significant weakening of the US
dollar relative to the Swedish krona. AUA growth was supported by strong net
client cashflow, mainly driven by robust inflows into the custodian product,
resulting in an increase of 16% during 2025.
Continued strong activity in the market, supported by several new and enhanced
offerings across all distribution channels, along with a focus on expanding
our partner ecosystem, drove higher sales compared to the prior year. This
growth reflects the benefits of greater diversification across both business
areas and channels.
Whilst the transfer market for brokered occupational pension products
continues to remain active within the Swedish market, the volume of business
transferred from Movestic reduced relative to 2024, improving year-on-year
persistency experience. On a total level, the net client cash flow within the
pension and savings area amounted to a positive £807m, which is an increase
of 62% compared to prior year.
CUSTOMER OUTCOMES
During 2025, Movestic continued to enhance its products and services to meet
the increasing demand for individually-adapted solutions. From 1 January 2025,
Movestic offered customers the possibility to pause withdrawal of occupational
pension within the first five years. The "Movestic Freedom" concept, which
assists customers in planning their retirement, gained significant momentum
with strong adoption in 2025 and is expected to maintain high uptake rates
going forward.
In Q4 2025, the 'Pension Lab' was launched - a new online tool that helps
users take control of their pension. It offers easy-to-use visualisations of
how different choices can impact future retirement income and is available to
everyone on the Movestic website. The company also offers a digital service
that allows customers to easily manage their pension payments. The service is
highly valued by both customers and brokers, and its functionality was further
enhanced during the year.
A brand survey shows increased awareness of the Movestic brand, especially
within the core customer segment. The yearly customer and broker satisfaction
surveys delivered strong results, exceeding target levels.
GOVERNANCE
Movestic's sustainability programme supports the Group's strategy and
commitments, guiding its sustainability efforts and targets.
Movestic is outside of the scope of Corporate Sustainability Reporting (CSRD),
and the Company follows the development of EU's Omnibus proposal and its
impact on other regulations.
The Digital Operational Resilience Act (DORA) came into force in 2025, with
Movestic compliant to the requirement and work undertaken to embed the
regulation as part of ongoing operations
Updated Solvency II regulations are to be implemented in Swedish law by 30
January 2027 and will entail new requirements on capital and governance.
New EU‑harmonised Anti‑Money Laundering (AML) regulations are also to be
implemented into Swedish law by 10 July 2027. AI Act will apply in full from 2
August 2026, imposing requirements on AI systems with a focus on consumer
protection, ethics and transparency. For insurance companies, the AI Act will
introduce requirements for the use of AI tools within customer interactions,
underwriting, pricing and claims handling. The requirements have been
incorporated into Movestic's internal governance document which is revised
annually in line with the schedule of the AI Act.
FUTURE PRIORITIES
- Continue building long-term sustainable value for customers and
stakeholders through a diversified business model and an expanding ecosystem
of partners.
- Offer modern and individually adapted high-quality solutions within
pension, savings and health insurance, and expand the area of customer focused
digital services.
- Maintain a continued focus on an efficient platform and operational
processes, leveraging AI solutions to increase automation, streamline
workflows, and improve administrative efficiency.
- Support the Group's Climate Transition Plan commitments by
embedding the work into everyday operations.
- Continue to drive automation and process improvements to increase
scale and reduce cost per policy, including expanding the use of AI.
- Monitor developments in the regulatory landscape.
ACQUIRE LIFE AND PENSIONS BUSINESSES
Movestic together with the Group team are continuously engaging with other
market participants and investment bank advisors in order to understand and
assess potential opportunities for inorganic growth in the market.
FUTURE PRIORITIES
- Seek out opportunities to bring in additional scale through
non-organic growth.
ENHANCE VALUE THROUGH PROFITABLE NEW BUSINESS
Movestic continued to expand and further develop its custodian distribution
network with a Custodian product new sales market share of 16% on a rolling 12
month basis (2024: 12%) helping to deliver New Business Contribution of £3m
(FY24: £5m) and APE of £136m (FY24: £100m). During Q1 2025, a collaboration
with a new type of partner was established, launching a savings platform
aiming for customers within the segment of digital only wealth builders. This
provides further diversification in distribution for the company. During Q2
2025, a new custodian occupational pension product was also launched. The
pipeline for new potential partnerships continues to be strong.
Furthermore, Movestic has continued to develop its wider ecosystem of
partners. Relationships with existing partners have deepened, enabling
increased cross-selling between savings and health insurance. In Q4 2025, a
new partnership was announced with a traditional life insurance company. This
collaboration expands the occupational pension offering by introducing
traditional life insurance solutions, providing customers with greater
flexibility and choice.
During the year, Movestic continued to strengthen its focus on growing the
life and health business by introducing new product offerings and implementing
further technical integrations within the broker channel. At the end of the
year, a further new partnership was announced, for the distribution of life
and health insurance in the Norwegian market. This collaboration further
reinforces the division's strategic focus on life and health insurance and
establishes a presence in the Norwegian market.
FUTURE PRIORITIES
- Continue building customer value and loyalty through further
enhancement of the product offering, consisting of individually adapted
pension and savings and life and health products, and associated digital
services. Focus on both growing new business and retention activities.
- Continue expanding the partner ecosystem by onboarding new partners
and strengthening relationships with existing ones to deliver a comprehensive
wealth and health insurance solution while driving business growth.
- Continue developing the life and health insurance business to
broaden business model diversification and offer customers a comprehensive
range of products and services.
CHESNARA CULTURE AND VALUE PRINCIPLES
Responsible risk-based management for the benefit of all our stakeholders - Implementation and maintenance of robust risk management frameworks
and
performance of stress and scenario testing to ensure resilience under adverse
conditions.
Fair treatment of customers - Fair treatment of customers by providing personalised and flexible
solutions for financial security.
Maintain adequate financial resources - Ensured effective administrative processes and operational cost
control.
- Maintenance of strong capital solvency well above regulatory
minimums.
Provide a competitive return to - Continued diversification of business areas and distribution
channels, together with competitive products and services to ensure strong and
Investors sustainable growth and returns.
Robust regulatory compliance - DORA- Digital Operational Resilience Act came into force in 2025,
with continued focus during the year to implement as part of BAU.
A just transition to a sustainable group - Embedded ESG considerations in BAU, including the Group's net-zero
ambitions into investment processes and overall operations.
Responsible risk-based management for the benefit of all our stakeholders - Implementation and maintenance of robust risk management frameworks
and performance of stress and scenario testing to ensure resilience under
adverse conditions.
BUSINESS REVIEW | NETHERLANDS
Scildon is a Netherlands-based life insurance provider specialising in
individual life and investment-linked products, focused on delivering
long-term financial security to customers.
- Operating Capital Generation £36m (FY24: £30m)
- Cash Remittances £7m (FY24: £7m)
- Solvency Coverage Ratio (Pre foreseeable Cash Remittance) 265%
(FY24: Waard 350%, Scildon 205%)
- Solvency Coverage Ratio (Post foreseeable Cash Remittance) 234%
(FY24: Waard 324%, Scildon 205%)
- Own Funds £232m (FY24: £222m)
- AuA £3bn (FY24: £3bn)
- Adjusted Operating Profit £23m (FY24: £17m)
MAXIMISE VALUE FROM EXISTING BUSINESS
CAPITAL AND VALUE MANAGEMENT
In 2025, Scildon completed its merger with the Waard Group, creating a more
scalable and sustainable business model. Scildon has focused on streamlining
operations, aligning governance structure and assessing the financial impact
of the merger. The integration was executed successfully, and the organisation
has emerged stronger, better able to respond to market changes, and equipped
with improved capabilities to deliver value to stakeholders.
In addition, as part of a broader strategic shift aimed at focusing on
individual life solutions within the Dutch market, Scildon made the decision
to discontinue its collective pension offering. The portfolio was sold to
Allianz with an effective date of 30 September 2025. Throughout the fourth
quarter, all existing policies under the collective pension scheme were
successfully migrated to Allianz, ensuring a smooth transition for
policyholders and maintaining a high standard of customer service. This move
enables Scildon to concentrate its resources and expertise on developing and
enhancing products tailored to individual clients, further strengthening its
competitive position in the Dutch insurance sector.
CUSTOMER OUTCOMES
Scildon has continued to enhance its digital capabilities, with further
improvements to its customer and advisor portals. These upgrades aim to
simplify user experience and improve service delivery and are reflected in a
positive eNPS score.
GOVERNANCE
The business remains materially compliant with the EU Digital Operational
Resilience Act (DORA) and continues to embed resilience practices into daily
operations. Although Scildon falls outside the scope of mandatory Corporate
Sustainability Reporting Directive (CSRD) reporting following the EU Omnibus
proposals, we continue to monitor developments and adopt best practices where
relevant.
A Climate Transition Plan has also been finalised, marking a significant
step forward in Scildon's commitment to sustainability and responsible
business practices.
FUTURE PRIORITIES
- In 2026, the focus will be on realising synergies resulting from
the merger, further embedding a unified culture and streamlining and
simplifying the organisational structure. Key integration milestones include
alignment of IT and financial systems.
- Complete an ALM study to optimise investment returns while aligning
with the competitiveness of our pricing strategies.
- Ensure customers continue to receive high quality service.
- Continued support and implementation of the Climate Transition
Plan.
ACQUIRE LIFE AND PENSIONS BUSINESSES
Scildon has continued to support the Group's acquisition strategy by assessing
M&A opportunities and processes, including due diligence activity, as
appropriate.
FUTURE PRIORITIES
- Deploy targeted M&A opportunities in the Dutch market in close
collaboration with Chesnara, aligned with Group strategy and capital
discipline.
- Focus on acquisitions that enhance Scildon's scale, strengthen the
product mix and create long-term value.
- Leverage Chesnara's expertise and financial capacity to pursue
selective consolidation opportunities in the life insurance sector.
ENHANCE VALUE THROUGH PROFITABLE NEW BUSINESS
Scildon has seen continued competitive pressure in the Dutch market, with new
business maintained at a steady level of APE production throughout the year
whilst improving the new business margin. This stability was driven by a
strategic focus on simplifying the product offering, optimising the overall
user experience, and delivering personal customer service. These efforts
strengthened customer engagement and supported consistent sales performance,
even in a challenging environment.
Scildon introduced a new Mortgage Term Lifestyle proposition in March. This
new proposition supported a steady improvement in Scildon's new business
throughout the year, providing a promising outlook for 2026 Scildon's products
have earned recognition and prestigious awards in various areas;
- In 2025, Scildon's Lifestyle Overlijdensrisicoverzekering (Term Life
Insurance) received a 5-star rating from MoneyView in the Product Terms
category. This marked the third consecutive year that Scildon earned this top
rating for the product.
- Winner of the Adfiz Award category "Customer Interest" for the
Lifestyle Quit Smoking Term.
- 3rd place in the IG&H Performance Monitor category "Individual
Life". Financial advisors rated Scildon with an average score of 8.0, just 0.1
points behind the joint winners, TAF and Nationale-Nederlanden (NN)
The division delivered New Business Contribution of £6m (FY24: £2m) and has
a term assurance market share of 12.5% (FY24: 10.6%).
FUTURE PRIORITIES
- Streamline and simplify the product portfolio and focus on
profitable growth.
- Ongoing competitor assessment to ensure pricing and distribution
remain competitive.
- Complete ALM study to optimise investment returns while aligning
with the competitiveness of our pricing strategies.
CHESNARA CULTURE AND VALUE PRINCIPLES
Responsible risk-based management for the benefit of all our stakeholders - Implementation and maintenance of robust risk management frameworks
and performance of stress and scenario testing to ensure resilience under
adverse conditions.
Fair treatment of customers - Scildon has continued to enhance its digital capabilities, with
further improvements to its customer and advisor portals.
Maintain adequate financial resources - Scildon maintained a solid capital position, steady value
generation, and disciplined cost management all contributing to a resilient
financial baseline.
Provide a competitive return to - Completed the merger with Waard, generating cost synergies and
diversification benefits.
Investors
Robust regulatory compliance - The business remains compliant with the EU Digital Operational
Resilience Act (DORA) and continues to embed resilience practices into daily
operations.
A just transition to a sustainable group - The transition plan towards net zero in the investment portfolio
was finalised.
Responsible risk-based management for the benefit of all our stakeholders - Implementation and maintenance of robust risk management frameworks
and performance of stress and scenario testing to ensure resilience under
adverse conditions.
FINANCIAL REVIEW | SOLVENCY II
The Group's Solvency Coverage Ratio of 257% is significantly above our
operating range of 140% to 160%.
SOLVENCY COVERAGE RATIO
£m FY25 FY24
Own Funds 859 643
SCR 334 316
Surplus 525 327
Solvency Coverage Ratio % 257% 203%
Group Solvency II surplus is £525m (2024: £327m) with a Solvency Coverage
Ratio of 257% (2024: 203%) which includes the impact of the proposed final
2025 dividend of £34m and payment of the interim 2025 dividend of £18m.
The surplus increased by £198m, mainly driven by the growth in Own Funds,
reflecting favourable economic conditions and positive operational performance
variances, the dividend impacts noted above and funds raised as part of
M&A activity (including the RT1 Bond and the rights issue). The SCR
increased in 2025, mainly owing to an increase in market risk resulting from a
year‑to‑date rise in equity markets, partly offset by capital management
actions implemented in the UK.
OWN FUNDS
£m
FY24 Own Funds 643
Operating Own Funds generation 58
Non-operating Own Funds generation 22
Capital Raises (net of integrations & restructuring) 208
Tiering Restrictions (18)
Dividends (52)
FY25 Own Funds 859
The numbers that follow present the divisional view of the solvency position
which may differ to the position of the individual insurance company(ies)
within the consolidated numbers.
UK
£m FY25 FY24
Own Funds 118 130
SCR 91 96
Buffer 18 19
Surplus 9 15
Solvency Coverage Ratio % 130% 135%
The decrease in surplus to £9m (FY24: £15m) reflects lower Own Funds and the
impact of Cash Remittances to Group. Own funds, pre-Cash Remittance,
increased (£9m), supported by new business and positive economic returns. The
SCR reduced by £5m, including the impact of capital management initiatives
such as mass lapse reinsurance and the implementation of a new foreign
exchange hedge.
SWEDEN
£m FY25 FY24
Own Funds 201 184
SCR 142 122
Buffer 28 24
Surplus 31 37
Solvency Coverage Ratio % 142% 151%
Movestic reported a surplus of £31m (FY24: £37m) which relates to a rise in
Own Funds from positive equity markets, partly offset by the US dollar
depreciation against the Swedish Krona, and increased SCR as a result of
higher market risk requirements. The impact of exchange rate movements also
resulted in an increase in both Own Funds and SCR on translation.
NETHERLANDS
£m FY25 FY24*
Own Funds 232 222
SCR 99 93
Buffer 74 60
Surplus 59 69
Solvency Coverage Ratio % 234% 239%
*The FY24 comparator reflects the combination of the reported results of Waard
and Scildon on a pre-merger basis and individual buffers (Waard 35% and
Scildon 75%).
Scildon reported surplus of £59m, reflecting growth in Own Funds as well as
an increase in SCR. The rise in Own Funds includes the positive impacts of
synergies resulting from the merger of the Dutch business units and economic
returns, offsetting adverse mortality experience. The rise in SCR includes the
impact of market conditions as well as some one-off restructuring activities.
FINANCIAL REVIEW | SOLVENCY II SENSITIVITIES
The table that follows provides some insight into the immediate impact of
certain sensitivities on the Group's Solvency Coverage Ratio and Solvency
Surplus on a pre-Chesnara Life basis.
Solvency Coverage Ratio Solvency Surplus
% £m
FY25 257 525
20% sterling appreciation 276 504
20% sterling depreciation 233 550
25% equity fall 283 475
25% equity rise 249 580
10% equity fall 266 505
10% equity rise 255 550
1% interest rate rise 261 533
1% interest rate fall 252 518
50bps credit spread rise 253 510
25bps swap rate fall 251 512
10% mass lapse 265 513
10% expense rise 244 490
1% inflation 249 500
5% mortality increase 253 516
Foreign exchange:
Appreciation of sterling relative to our overseas currencies reduces the value
of overseas surplus with partial mitigation from the Group currency hedge.
Equity stresses:
Lower equity valuations reduce the Group's AuA. In turn, this decreases the
value of Own Funds and the associated SCR as the value of the funds exposed to
market risk reduce. The SCR reduction includes the impact of the Solvency II
Symmetric Adjustment, and results in an increase in the Solvency Coverage
Ratio.
Interest rates:
An interest rate rise reduces both the assets and liabilities, with the
liabilities reducing more than the assets as the assets have a shorter
duration than the liabilities. Conversely, an interest rate fall increases
both the assets and liabilities, with the liabilities increasing more than the
assets.
Credit spreads:
Higher spreads reduce surplus as the rise in spreads decreases the value of
Own Funds.
Swap rates:
A reduction in the swap discount rate profile reduces the Group's surplus by
increasing the time-value of the projected future liabilities associated with
the in-force book.
Mass lapse:
A 10% mass-lapse event drives an immediate reduction in the Group's projection
of future surpluses, largely offset by the reduction in the associated SCR.
Inflation:
A permanent increase in inflation for all future years increases the Group's
future expense profile, reducing Own Funds and surplus.
Mortality rates:
A 5% increase in mortality rates across the Group will reduce the future
surplus projections from the in-force book, leading to lower Own Funds and a
reduction in Group's surplus.
FINANCIAL REVIEW | OCG
FY25: £94M
FY24: £79M
(i) Operating Capital Generation by Business Unit
Business Segment - £m FY25 FY24
UK 41 32
Sweden 14 10
Netherlands 36 30
Group Centre 3 7
Operating Capital Generation 94 79
Operating Capital Generation for the year of £94m was driven by expected
investment returns of £50m (from non‑linked and shareholder assets),
positive operating variances and management actions of £51m, operating
assumption changes of £(14)m, and £5m relating to smaller contributions from
other operating components. Non-operating capital generation included the RT1
and rights issue.
(ii) Solvency II surplus movement for the year ended 31 December 2025
£m 31 December 2024 Operating Capital Generation Non-Operating Capital Generation Dividends T2/T3 restrictions Acquisitions 31 December 2025
58 229
Own Funds 643 (52) (19) - 859
SCR 36 (54) - - - (334)
(316)
Surplus 327 94 175 (52) (19) - 525
(iii) Solvency II surplus movement for the year ended 31 December 2024
£m 31 December 2023 Operating Capital Generation Non-Operating Capital Generation Dividends T2/T3 restrictions Acquisitions 31 December 2024
Own Funds 684 57 (38) (37) (33) 10 643
SCR 22 8 - - (13) (316)
(333)
Surplus 351 79 (30) (37) (33) (3) 327
FINANCIAL REVIEW | IFRS INCOME STATEMENT
ADJUSTED OPERATING PROFIT £56M
FY24: £39M
(iv) Reconciliation of IFRS Profit before tax to Adjusted Operating Profit
for the year ended 31 December 2025
£m Other Group activities
UK Sweden Netherlands Total
Profit/(loss) before tax and consolidation adjustments 33 5 33 (52) 19
Tax attributable to policyholders' returns (26) - - - (26)
Profit before tax attributable to 7 5 33 (52) (7)
shareholders' profits
Investment variances and economic assumption changes 4 1 (17) 18 6
Impairment, amortisation and profit or loss on disposal 4 2 - - 6
Integration and restructuring costs 4 3 7 26 40
Financing costs - - - 11 11
Adjusted operating profit before tax 19 11 23 3 56
attributable to shareholders' profits
Adjusted Operating Profit was £56m (2024: £39m), driven primarily by robust
operating performance in the UK and Netherlands. The Netherlands benefited
from merger synergies and the sale of the collective pension book to Allianz,
positively impacting the annual CSM release whilst the UK experienced positive
economics reflecting greater returns as a result of lower yields in comparison
to the prior year.
The Profit Before Tax (PBT) of £19m was adjusted to reflect the following
items: £40m for integration and restructuring costs, including those
associated with the Chesnara Life acquisition and M&A activities; £(26)m
attributable to policyholder tax; £11m in central finance costs; £6m from
short-term volatility; and £6m related to impairment, amortisation, and
disposals of acquired value of in-force business (AVIF). The application of
these adjustments resulted in an Adjust Operating Profit of £56m.
(v) Reconciliation of IFRS Profit before tax to Adjusted Operating Profit
for the year ended 31 December 2024
Sweden Other Group activities
Netherlands
UK Total
Profit/(loss) before tax and consolidation adjustments 28 10 5 (22) 21
Tax attributable to policyholders' returns (18) - - - (18)
Profit before tax attributable to 10 10 5 (22) 3
shareholders' profits
Investment variances and economic assumption changes (2) (3) 5 (4) (4)
Impairment, amortisation and profit or loss on disposal 3 2 - - 5
Integration and restructuring costs - 4 7 13 24
Financing costs - - - 11 11
Adjusted operating profit before tax 11 13 17 (2) 39
attributable to shareholders' profits
FINANCIAL REVIEW | IFRS INCOME STATEMENT
IFRS PRE-TAX PROFIT £19M
FY24: £21M
TOTAL COMPREHENSIVE INCOME £12M
FY24: £(11)M
Analysis of IFRS result
FY25 FY24
£m £m
Net insurance service result 22 9
Net investment result 50 53
Fee, commission and other operating income 114 104
Other operating expenses (156) (134)
Financing costs (11) (11)
Profit before income taxes 19 21
Income tax (charge)/credit (29) (17)
(Loss)/Profit for the period after tax (10) 4
Foreign exchange (loss)/gain 20 (15)
Other comprehensive income 2 -
Total comprehensive income 12 (11)
Movement in IFRS Capital Base
Opening IFRS Capital Base 449 479
Movement in CSM (net of reinsurance and tax) (4) 15
Total comprehensive income 12 (11)
Other adjustments associated with shareholders' equity 279 2
Dividend (42) (36)
Closing IFRS Capital Base 694 449
Net insurance service result
The net insurance service result comprises the revenue and expenses from
providing insurance services to policyholders and ceding insurance business to
reinsurers and is in respect of current and past service only.
Assumption changes, relating to future service, are excluded from the
insurance result (as they adjust the CSM), unless the CSM for a given
portfolio of contracts falls below zero; thereby in a 'loss component'
position. Economic impacts are also excluded from the insurance service
result.
The net insurance service result of £22m is broken down into the following
elements:
- gains from the release of risk adjustment and CSM of £23m
(2024: £22m). These gains represent a consistent source of future profits for
the Group.
- losses of £1m (2024: £14m loss) caused by experience impacts
and loss component effects where portfolios of contracts suffered adverse
impacts that would otherwise be offset in the balance sheet if the CSM for
those portfolios were positive.
Other adjustments associated with shareholders' equity at FY25 mainly relate
to funds raised for M&A activity.
Net investment result
The net investment result contains the investment return earned on all assets,
together with the financial impacts of movements in insurance and investment
contract liabilities. The investment result also includes losses made on the
Group's currency hedging arrangement of £17m (in 2024: gain of £4m).
Fee, commission and other operating income
The most significant item in this line is the fee income that is charged to
policyholders in respect of the asset management services provided for
investment contracts. There is no income in respect of insurance contracts in
this line, as this is all now reported in the insurance result.
Total fee, commission and operating income in the year was £114m (2024:
£104m) and was £76m net of Swedish policyholder yield tax (2024: £73m).
Other operating expenses
Other operating expenses consist of costs relating to the management of the
Group's investment contracts, non-attributable costs relating to the Group's
insurance contracts and other certain one-off costs such as project costs and
expenses relating to M&A activity.
Other items of note are the amortisation of intangible assets in respect of
investment business and the payment of yield tax relating to policyholder
investment funds in Movestic, for which there is a corresponding offset within
the fee income line.
After removing the impacts of policyholder yield tax the other operating
expenses in the year are £118m (2024: £103m).
Financing costs
This predominantly relates to the cost of servicing our Tier 2 corporate debt
notes which were issued in early 2022.
Foreign exchange
The Group's IFRS consolidated results show a foreign exchange gain of £20
million for the period, owing to sterling depreciation versus Swedish krona
and the euro, offsetting the loss on foreign exchange rates hedges included
within the net investment result.
Other comprehensive income
This represents the revaluation of pension obligations for our Dutch division.
Income tax
Income tax consists of both current and deferred taxes.
The total IFRS tax charge of £29m mainly represents UK policyholder tax that
is reflective of positive investment growth in the period. The charge is
offset by equal and opposite policyholder fund rebates primarily within the
investment result.
FINANCIAL REVIEW | IFRS BALANCE SHEET
£m £m
FY24 CSM (gross of tax) 176 FY23 CSM (gross of tax) 157
Interest accreted 4 4
New business 8 7
Acquisition impacts 7 1
Experience & assumption changes (13) 33
CSM release (20) (19)
Foreign exchange impact 8 (7)
FY25 CSM (gross of tax) 170 FY24 CSM (gross of tax) 176
The CSM represents future profits that are expected to be released to the
income statement over the lifetime of the portfolio. The CSM (net of
reinsurance and gross of tax) has decreased by £6m from £176m to £170m
during 2025. Adverse experience and assumption changes across the Group
reduced the CSM by £13m, which was mainly the result of mortality experience
and cost assumption strengthening in Scildon. New business movement, along
with the acquisition impact which resulted in additional CSM from the Canada
Life portfolio transferred under Part VII, created a net £15m CSM (after
reinsurance). CSM release in FY25 included one‑off items, primarily
associated with Scildon following the sale of the pension book to Allianz,
while underlying movements were broadly consistent with prior year.
Leverage
The IFRS leverage of 22.4% ratio reduced by 8.5 ppts, (FY24: 30.9%) driven
primarily by the Group's capital issuances in 2025.
Assets under Administration (AuA)
£bn FY25 FY24
UK(1) 6 6
Sweden 7 5
Netherlands 3 3
Total 15 14
Please note that the values above have been rounded to the nearest whole
number.
The Group's AuA as at FY25 was £15bn following strong custodian inflows in
Sweden and depreciation of Sterling relative to the Swedish krona and the
Euro.
(1) includes the impact of the Canada Life portfolio acquired, expected to
Part VII in 2026
( )
( )
RISK MANAGEMENT
Against a backdrop of growing volatility, a resilient and forward‑looking
approach to risk management is fundamental to protecting our stakeholders and
delivering sustainable growth. By sustaining a clear focus on the effective
integration of acquired businesses and outsourcing partnerships, we continue
to embed a consistent risk framework across our developing Group. We maintain
a strong solvency position, and our financial sensitivities continue to align
comfortably with the Board's risk appetite.
NIAMH CARR
INTERIM CHIEF RISK OFFICER
Managing risk is a key part of our business model. We achieve this by
understanding the current and emerging risks to the business, mitigating them
where appropriate and ensuring they are appropriately monitored and managed.
HOW WE MANAGE RISK
RISK MANAGEMENT SYSTEM
Risk management system review and development
Clear accountabilities and responsibilities
Strategy: The risk management strategy contains the objectives and principles
of risk management, the risk appetite, risk preferences and risk tolerance
limits.
Policies: The risk management policies implement the risk management strategy
and provide a set of principles (and mandated activities) for control
mechanisms that take into account the materiality of risks.
Processes: The risk management processes ensure that risks are identified,
measured/ assessed, monitored and reported to support decision making.
Reporting: The risk management reports deliver information on the material
risks faced by the business and evidence that principal risks are actively
monitored and analysed and managed against risk appetite.
The Group adopts the "three lines of defence" model with a single set of risk
and governance principles applied consistently across the business.
In all business units we maintain processes for identifying, evaluating and
managing all material risks faced by the Group, which are regularly reviewed
by the Senior Leadership teams and Audit & Risk Committees. Our risk
assessment processes have regard to the significance of risks, the likelihood
of their occurrence and take account of the controls in place to manage
them. The processes are designed to manage the risk profile within the
Board's approved risk appetite.
Group and business unit risk management processes are enhanced by stress and
scenario testing, which evaluates the impact of certain adverse events
occurring separately or in combination. The results, conclusions and any
recommended actions are included within business unit and Group ORSA Reports
to the relevant Boards. There is a strong correlation between these adverse
events and the risks identified in 'Principal risks and uncertainties'. The
outcome of this testing provides context against which the Group and business
units can assess whether any changes to risk appetite or to management
processes are required.
RISK MANAGEMENT | ROLE OF THE BOARD
The Group Board is responsible for monitoring the Group Risk Management System
and carrying out a review of its effectiveness on an annual basis.
Risk Strategy and Risk Appetite
The Group and its business units have a defined risk strategy and supporting
Risk Appetite Framework to embed an effective Risk Management Framework, with
culture and processes at its heart, and to create a holistic, transparent and
focused approach to risk identification, assessment, management, monitoring
and reporting.
On the recommendation of the Chesnara Audit & Risk Committee the Chesnara
Board approves a set of risk preferences which articulate, in simple terms,
the desire to increase, maintain, or reduce the level of risk taking for each
main category of risk. The risk position of the business is monitored
against these preferences using risk tolerance limits, where appropriate, and
they are taken into account by the management teams across the Group when
taking strategic or operational decisions.
Risk and Control Policies
The Group has a set of risk and control policies that set out the key
policies, processes and controls to be applied. Senior management is
responsible for the day-to-day implementation of the risk and control
policies. Subject to the materiality of changes, the Chesnara Board approves
the review, updates to and attestation of these policies at least annually.
Risk Identification
The Group maintains a Risk Register of risks which are specific to its
activity and reports these, along with the principal risks of each business
unit, to the Chesnara Audit & Risk Committee on at least a quarterly
basis.
On an annual basis the Board approves, on the recommendation of the Chesnara
Audit & Risk Committee, the materiality criteria to be applied in the risk
scoring and in the determination of what is considered to be a principal risk.
At least quarterly the principal and emerging risks are reported to the
relevant Boards, assessing their proximity, probability and potential impact.
Own Risk and Solvency Assessment (ORSA)
On an annual basis, or more frequently if required, the Group produces a Group
ORSA Report which aggregates the business unit ORSA findings and supplements
these with an assessment specific to Group activities. The Group and business
unit ORSA policies outline the key processes and contents of these reports.
The Chesnara Board is responsible for approving the ORSA, including steering
in advance how the assessment is performed and challenging the results.
The primary objective of the ORSA is to support the Company's strategic
decision-making, by providing insights into the Company's risk profile over
the business planning horizon. Effective ORSA reporting supports the Board, in
its role of protecting the viability and reputation of the Company, reviewing
and challenging management's strategic decisions and recommendations.
Risk Management System Effectiveness
The Group and its business units undertake a formal annual review of and
attestation to the effectiveness of the risk management system. The assessment
considers the extent to which the risk management system is embedded.
The Chesnara Board is responsible for monitoring the Risk Management System
and its effectiveness across the Group. The outcome of the annual review is
reported to the Chesnara Board which make decisions regarding its further
development.
RISK MANAGEMENT | EMERGING RISKS
On a regular basis the Senior Management team scans the horizon to identify
potential risk events (e.g. political; economic; technological; environmental,
legislative & social), assessing potential outcomes in terms of threats
and opportunities. This section provides details on some of the emerging risks
that have been kept under close watch during 2025.
GEOPOLITICAL RISK
Geopolitical risk has continued to be a source of uncertainty contributing to
market volatility and impacting investment performance. Key geopolitical
tensions remain unresolved, including the conflict between Ukraine and Russia,
the Middle East and continued tensions between China and Taiwan. These remain
an emerging risk for the Group, in the sense these are evolving situations
which have potential implications for the Group's principal risks.
The political landscape in 2025 was shaped by the implementation of policy
agendas following the extensive global elections held in 2024. In the UK, the
Labour Government's first full year in office saw pressures associated with
welfare reform and a desire to strengthen foreign relations, in particular
with the United States. In the Netherlands the collapse of the Schoof
coalition government led to a snap general election in October, with no one
party achieving clear dominance. In the United States, the new administration
began implementing trade and economic policies that contributed to heightened
market volatility and uncertainty around global trade and inflation.
MACROECONOMIC VOLATILITY
Global economic growth remained uneven during 2025, reflecting the continued
impact of geopolitical tensions, evolving supply chain dynamics and changes in
consumer behaviour. Market indices reached a historically high level, with
concerns regarding the risk of a sharp market correction due to potential
over-valuation of AI related stocks. Expectations at the start of the year
that central banks would begin easing monetary policy proved only partially
realised. While inflation moderated in several major economies, it remained
more persistent in certain sectors and regions, leading central banks to adopt
a cautious and gradual approach to interest rate cuts. In addition, credit
spreads remain near historically tight levels, raising the likelihood of
spreads widening in the event of increased market uncertainty. In currency
markets, the US dollar depreciated over 2025 driven by tariff and political
uncertainty and inflationary pressures.
ARTIFICIAL INTELIGENCE (AI)
Developments in the field of AI mean companies are looking towards both
self-developed and externally acquired AI applications, often with the aim to
automate or optimise existing processes and sub-processes. As a result,
financial services organisations are entering the AI space with many looking
at incorporating it into their long-term strategies.
Regulatory developments during 2025 have further shaped the AI landscape. The
EU Artificial Intelligence Act, which came into force in August 2024, has
begun to influence how AI systems are deployed within the EU, emphasising
safety, transparency, fundamental rights, and responsible innovation. In the
UK, AI regulation has continued to evolve, guided by a principles based, cross
sector framework. Regulators, including the FCA and the Information
Commissioner's Office, have continued updating their strategic approaches to
AI oversight, focusing on balancing innovation with accountability, security,
and ethical considerations.
Overall, AI remains a rapidly evolving area of strategic and regulatory focus,
and the Group continues to monitor developments closely whilst exploring the
use of AI to ensure that opportunities are realised responsibly while emerging
risks are managed effectively.
SUSTAINABILITY
Sustainability and the response to the challenges and opportunities presented
continues to be a key focus in the UK and Europe and is an evolving area of
potential risk for the business. While the 2030 Agenda for Sustainable
Development, adopted by all United Nations Member States in 2015, provides a
global framework for addressing urgent challenges such as poverty, inequality,
climate change, environmental degradation, peace, and justice, the United
States formally withdrew from the UN Sustainable Development Goals in early
2025, highlighting ongoing geopolitical differences in approaches to
sustainability.
A prominent area of focus for regulators and businesses in the UK and EU
continues to be the financial risks associated with climate change. Following
2024, which was the hottest year on record and the first calendar year to
exceed the 1.5°C threshold of the Paris Agreement, the global average
temperature in 2025 remained elevated, and understanding of the impacts on
business operations, markets, and long-term resilience continues to develop.
The Group has continued to implement its sustainability strategy, which
remains an integral part of the Group's overall strategy, supporting action on
current and emerging sustainability-related risks and reinforcing the Group's
commitment to responsible business practices as part of its long-term
resilience planning.
The risk information that follows includes specific commentary, where
appropriate, on the impact of emerging events on our Principal Risks.
RISK MANAGEMENT | PRINCIPAL RISKS AND UNCERTAINTIES
The following tables outline the Principal Risks and uncertainties of the
Group and the mitigants in place to lessen or manage their impact. It has
been drawn together following regular assessment, performed by the Chesnara
Audit & Risk Committee, of the Principal Risks facing the Group, including
those that would threaten its business model, future performance, solvency or
liquidity. The impacts are not quantified in the tables. However, by virtue of
the risks being defined as principal, the impacts are potentially
significant.
In preparation for the new Corporate Governance Code requirements under
Provision 29 we have refreshed our Principal Risks, documented our Material
Controls and established an assurance approach to support the controls
effectiveness declaration which will be required for year-end 2026.
We have reassessed our Principal Risks to ensure they remain relevant and
comprehensive. This review reflects the evolving business landscape and
emerging risk considerations. The updated Principal Risks, reviewed and
approved by the Board, are closely aligned with our Risk Universe and cover
the key strategic, operational, financial, and regulatory risk areas.
Our Material Controls are defined as controls which are aimed at keeping the
Principal Risks and uncertainties of the business within the risk appetite
agreed by the Board. We have considered Material Controls in terms of the key
control themes and mechanisms that provide the Board with relevant assurance
over the management of Principal Risks, with a focus on governance, oversight,
monitoring and preparedness.
PR1 Market & Liquidity Risk
PR1.1
Exposure to financial losses or value reduction arising from adverse movements
in currency, investment markets, counterparty defaults, or through inadequate
asset liability matching.
PR1.2
Adverse market and liquidity impacts arising from physical risks (e.g. extreme
weather events) or transition risks (e.g. regulatory changes, shifts in
investor sentiment, or carbon pricing) related to climate change
PR2 Insurance Risk
PR2.1
Risk of adverse demographic experience compared with assumptions (such as
rates of mortality, morbidity, persistency etc.)
PR2.2
Risk that expenses may exceed planned budgets and unit costs may grow at
unsustainable levels.
PR3 Strategic Risk
PR3.1
Risk that transformational projects may fail to deliver the expected
strategic, operational, or financial benefits.
PR3.2
The risk of failure to source acquisitions that meet Chesnara's criteria or
the execution of acquisitions with subsequent unexpected financial losses or
value reduction.
PR3.3
Risk that failure to effectively integrate sustainability principles and
environmental, social, and governance (ESG) considerations into the Group's
long-term strategy could result in loss of competitive advantage, diminished
stakeholder trust, regulatory penalties, and reduced access to capital.
PR4 Operational Risk
PR4.1
Severe disruptions or failures in critical business services could
significantly impact operations and delivering positive outcomes for
customers.
PR4.2
The risk that statutory reporting (financial and regulatory reports) includes
material misstatements or non-compliance issues
PR4.3
Risk that intentional acts of fraud whether internal (by employees or
management) or external (by customers, vendors, or third parties) could lead
to financial loss, regulatory sanctions, reputational damage, and erosion of
client trust.
PR4.4
Risk that counterparties, outsourced service providers (OSPs), or third
parties may default on contractual obligations or fail to deliver critical
business services as agreed.
PR5 IT / Data Security Risk
PR5.1
Risk that cyber-attacks or failures in IT data security controls could
compromise the confidentiality, integrity, or availability of information
systems and data.
PR6 Regulatory Risk
PR6.1
The risk of regulatory failure, including failure to comply with regulations
or meet regulatory expectations, as well as adverse changes in regulator or
industry practices or the inconsistent interpretation and application across
jurisdictions.
PR1: MARKET & LIQUIDITY RISK
The Group is exposed to market and liquidity risk as a natural consequence of
the business we operate - we invest to back long-term liabilities (for
protection products) and on behalf of our policyholders (for savings
products). Where managed effectively, exposure to these risks is fundamental
to how life insurers create value for policyholders and shareholders. Market
and liquidity risk could have a material adverse impact on the Group's
financial performance, capital position and ability to meet its obligations in
the event that they are not effectively controlled.
Market risk arises from movements in asset values, foreign exchange rates and
interest rates, which may impact investment returns, funding capacity and the
Group's ability to meet commitments to policyholders, creditors and
shareholders.
Liquidity risk arises from the uncertainty surrounding the timing and amount
of future cash outflows, including policyholder claims, reinsurance premiums,
debt servicing and dividend payments. A mismatch between available liquid
resources and required payments could impair the Group's ability to meet its
obligations as they fall due. Liquidity pressures could be exacerbated by
counterparty failures or credit defaults, a significant increase in claims
experience, or other large and unexpected expenditure.
Market and liquidity risk may also be influenced by wider environmental,
social and governance (ESG) developments. Physical climate risks, including
extreme weather events such as floods, hurricanes and wildfires, may result in
direct losses, business interruption and supply chain disruption, as well as
indirect impacts on counterparties and critical infrastructure, including
third-party service providers and data centres. Longer-term changes in climate
patterns may further disrupt operations and financial markets.
Transition risks associated with the move towards a lower-carbon economy may
affect the valuation and performance of certain investments, particularly in
carbon-intensive sectors, as a result of regulatory change, evolving consumer
behaviour and shifts in market demand. Additional impacts may arise from
inflationary pressures linked to global climate policy outcomes, including
energy price volatility.
PR1.1
Exposure to financial losses or value reduction arising from adverse movements
in currency, investment markets, counterparty defaults, or through inadequate
SUB RISK asset liability matching.
RISK APPETITE
The Group accepts this risk and manages it through controls to prevent any
increase or decrease in the risk exposure beyond set levels. These controls
will result in early
intervention if the amount of risk approaches those limits.
MITIGATION
Financial risks are managed through regular monitoring of exposures,
asset-liability matching, and maintaining a well diversified portfolio
supported by surplus Tier 1 liquid assets such as cash and gilts, with regular
liquidity forecasting to manage liquidity risk.
Concentration risk is mitigated by using a range of funds and managers within
a strong governance framework that oversees external mandates.
The risk-return balance of fixed interest assets is actively optimised in
light of balance sheet volatility and credit risks.
Currency risk is managed through consideration of hedging, where
cost-effective.
RECENT CHANGE / OUTLOOK
There continues to be a high level of uncertainty in the external operating
environment with a varied outlook globally.
Geopolitical tensions, ongoing global conflicts and an evolving monetary
policy landscape remain key sources of risk, contributing to market volatility
and the potential for sudden shocks.
Persistent geopolitical instability and conflict bring additional economic
uncertainty and financial market volatility. This creates additional risk of
poor mid-term performance on shareholder and policyholder assets.
PR1.2
SUB RISK
Exposure to adverse market and liquidity impacts arising from physical risks
(e.g. extreme weather events) or transition risks (e.g. regulatory changes,
shifts in investor sentiment, or carbon pricing) related to climate change.
RISK APPETITE
The Group aims to restrict its exposure to climate change risk, such that it
can continue to operate within the existing risk tolerance limits for the
associated risks and potential impacts. The risk impacts can have a direct
impact on the operations of the Group and, more significantly, to the
businesses within the Group's investment universe.
MITIGATION
Climate related risks are managed through an approach that integrates scenario
analysis, continuous monitoring, and proactive assessment of both physical and
transitional exposures.
Focusing on positive investment solutions by engaging asset managers and
investee companies to support decarbonisation and credible transition
planning, while increasing exposure to green bonds, net-zero aligned funds,
and nature-based partnerships as a mitigating action to support emissions
reduction and long-term portfolio resilience.
RECENT CHANGE / OUTLOOK
To manage the risks associated with climate change, financial institutions are
increasingly adopting advanced data and modelling techniques. Additionally,
regulatory bodies require financial institutions to perform climate scenario
analyses to test their resilience to emerging climate-related financial risks.
Work continues to embed sustainability considerations into the Group's broader
strategy and investment framework.
The Group has aligned its targets with the Paris Climate Agreement and aims to
be net zero for all emissions by 2050. In September 2025 we published our
Climate Transition Plan which has been developed using the IIGCC's Net Zero
Investment Framework 2.0.
PR2: INSURANCE RISK
Insurance risk arises within the Group as a consequence of operating as a
Group focused on life insurance businesses. We seek out exposure to insurance
risks in line with well-defined risk appetite limits and given appropriate
actuarial expertise to determine demographic assumptions to be used in product
pricing and reserving.
The Group is exposed to the risk that actual demographic experience, including
mortality, morbidity and persistency, differs from the assumptions used in
product pricing and reserving. In the event of significant adverse demographic
experience this would typically result in less profit accruing to the Group. A
significant deterioration in persistency in the case of a one-off event
resulting in multiple withdrawals over a short period of time (a "mass-lapse"
event) could have a more severe adverse effect on financial performance.
The Group is also exposed to the risk that expenses are higher than expected
either due to one-off increases in the cost of delivering key activities or
sustained inflation in variable costs. A key underlying source of potential
increases in regular expense is the additional regulatory expectations on the
sector. For the closed funds, the Group is exposed to the impact on
profitability of fixed and semi-fixed expenses, in conjunction with a
diminishing policy base. For the companies open to new businesses, the Group
is exposed to the impact of expense levels varying adversely from those
assumed in product pricing. Similarly, for acquisitions, there is a risk
that the assumed costs of running the acquired business allowed for in pricing
are not achieved in practice, or any assumed cost synergies with existing
businesses are not achieved.
PR2.1
SUB RISK
Risk of adverse demographic experience compared with assumptions (such as
rates of mortality, morbidity, persistency etc.)
RISK APPETITE
The Group accepts this risk and restricts its exposure, to the extent
preferred, through the use of reinsurance and other controls. Early warning
trigger monitoring is in place to track any increase or decrease in the risk
exposure beyond a set level, with action taken to address any impact as
necessary.
MITIGATION
Adverse demographic experience is managed through effective underwriting
techniques, ongoing monitoring, regular analysis, and assessment of key
assumptions.
Chesnara performs close monitoring of persistency levels across all groups of
business to support best estimate assumptions and identify trends.
Reinsurance is used where it is assessed to be cost-effective and providing an
effective transfer of risk, for example "mass-lapse" reinsurance.
Maintenance of good relationships with brokers, and diversification of the
broker base to support persistency.
RECENT CHANGE / OUTLOOK
Continued cost of living pressures could give rise to higher surrenders and
lapses should customers face personal finance pressures and not be able to
afford premiums or need to access savings. The Group continues to monitor
closely and respond appropriately.
Since 2020, we have seen mortality experience in the Netherlands in excess of
expectations due to a combination of variance in line with the general
population following the COVID19 pandemic and some portfolio specific factors.
This is reflected in the shorter-term assumptions but anticipated to fade away
in the longer-term assumptions, in line with industry practice / standard
tables.
Any prolonged stagnation of the property market could reduce protection
business sales compared to plan, particularly in the Netherlands.
Following the introduction of new legislation in 2022 making it easier for
customers to transfer insurance policies in Sweden, the transfer market
remains very active. This risk continues to be actively monitored.
PR2.2
SUB RISK
Risk that expenses may exceed planned budgets and unit costs may grow at
unsustainable levels.
RISK APPETITE
The Group aims to minimise its exposure to this risk, to the extent possible,
but acknowledges that it may need to accept some risk as a result of carrying
out business.
MITIGATION
Expense overruns and unsustainable unit cost growth are managed through
disciplined budgeting, ongoing monitoring, and proactive cost analysis.
Strategic oversight, scenario planning, and robust frameworks ensure potential
future pressures are identified and controlled, supporting operational
efficiency and the preservation of long-term value.
We regularly review our exposures and will consider more direct inflation
hedging options should circumstances determine that to be appropriate.
RECENT CHANGE / OUTLOOK
The Group has an ongoing expense management programme and various strategic
projects aimed at controlling expenses and seeking opportunities to exploit
efficiencies/ synergies, whilst ensuring we have the capabilities and capacity
to support our growth ambitions.
Acquisitions also present opportunities for unit cost reduction and the UK
business announced a long-term strategic partnership with FinTech market
leader SS&C Technologies ("SS&C") in May 2023, to provide policy
administration services to the Group's UK division.
Both the merger of Waard and Scildon in the Netherlands and the acquisition of
Chesnara Life support Chesnara's ongoing cost efficiency initiatives.
PR3: STRATEGIC RISK
Strategic risk could have a material impact on the Group's long-term
performance, financial position and ability to achieve its strategic
objectives. The Group's growth strategy is partly dependent on the successful
identification and execution of acquisitions. A reduction in the availability
of suitable acquisition opportunities within the Group's target markets,
arising from increased competition, market consolidation dynamics or
regulatory change affecting life Company restructuring, could constrain growth
and limit the Group's ability to deploy capital in line with its strategy.
The Group is also exposed to the risk that acquisitions fail to deliver the
anticipated strategic, operational or financial benefits. This may arise from
the crystallisation of risks inherent within acquired businesses or funds that
were not adequately identified, priced or mitigated at the point of
transaction, leading to erosion of value, financial losses or increased
management and capital demands.
In addition, the Group undertakes transformational and change programmes to
support its strategic objectives. There is a risk that such initiatives do not
deliver their intended outcomes, whether due to execution challenges, cost
overruns, delays or changes in the external environment. Failure to realise
the expected benefits of these projects could result in inefficiencies,
increased costs or reduced strategic flexibility.
Strategic risk may also arise from the failure to effectively integrate
sustainability principles and environmental, social and governance (ESG)
considerations into the Group's long term strategy. Inadequate alignment with
evolving stakeholder expectations, regulatory requirements or market practices
could lead to reputational damage, regulatory intervention, reduced
competitiveness and constraints on commercial opportunities. The Group could
also face reputational or litigation risk if it is perceived to have
inadequately managed climate-related risks or failed to meet disclosure
expectations, including the risk of allegations of insufficient or misleading
ESG reporting.
PR3.1
SUB RISK
Risk that transformational projects may fail to deliver the expected
strategic, operational, or financial benefits.
RISK APPETITE
The Group recognises that a degree of delivery risk is inherent in achieving
strategic transformation. However, it has a low tolerance for failures
resulting from inadequate planning, ineffective governance, insufficient
resourcing, or weak benefits realisation.
MITIGATION
We ensure that transformational initiatives deliver their intended strategic,
operational, and financial benefits through appropriate governance and
proactive oversight of progress.
Pro-active project management together with robust governance frameworks help
identify and address potential issues early, supporting successful outcomes.
RECENT CHANGE / OUTLOOK
In 2023 Chesnara appointed SS&C as strategic partner for administration
outsourcing in its UK business unit. CA is in the process of migrating most of
its policy administration to SS&C which is a large and complex multi-year
Transition & Transformation Programme. This carries with it significant
short term operational risks associated with programme delivery and migration
of existing outsourcing arrangements. The programme has already successfully
migrated two books of business over to the SS&C platform.
In July 2025 Chesnara successfully merged the Netherlands entities of Waard
Leven and Scildon. The merger provides operating efficiencies and supports
stronger financial outcomes.
PR3.2
SUB RISK
The risk of failure to source acquisitions that meet Chesnara's criteria or
the execution of acquisitions with subsequent unexpected financial losses or
value reduction.
RISK APPETITE
The Group generally expects acquisitions to enhance Own Funds and expected
Operating Capital Generation in the medium term (net of external financing),
though each opportunity will be assessed on its own merits.
MITIGATION
Operating in three territories increases our options thereby reducing the risk
that no further value adding deals are done. A broader target market also
increases the potential for deals that meet our strategic objectives.
Acquisition activity is guided by clear strategic criteria and governed
through a structured, Board-approved, risk-based Acquisition Policy.
Chesnara applies disciplined evaluation, pricing and due diligence processes,
with active CRO involvement throughout due diligence and deal refinement.
Robust governance, careful planning, and strong post-acquisition integration
oversight support effective execution.
These controls are further reinforced by a management team with significant
and proven mergers and acquisitions experience, operating within an
appropriate risk appetite and pricing framework.
RECENT CHANGE / OUTLOOK
During 2025 the Group announced the acquisition of Chesnara Life, the largest
transaction to date, with approximately £4bn of Assets under Administration
(AUA) and approximately 454,000 policies being acquired.
The associated successful equity rights issue and the Restricted Tier 1 debt
raise in 2025, in addition to diversifying the Group's capital structure, have
provided additional flexibility in terms of funding the Group's future growth
strategy.
In early 2026 the Group announced the proposed acquisition of Scottish Widows
Europe SA, a Luxembourg based closed life insurance business, adding
approximately 46,000 in force policies and €1.7bn of AuA.
There remains a positive pipeline of activity in relation to acquisitions,
with the Group considering possibilities across all territories.
PR3.3
SUB RISK
Risk that failure to effectively integrate sustainability principles and ESG
considerations into the Group's long-term strategy could result in loss of
competitive advantage, diminished stakeholder trust, regulatory penalties, and
reduced access to capital.
RISK APPETITE
The Group's approach is to minimise and actively manage risks arising from
inadequate integration of sustainability and ESG considerations into strategic
decision-making.
MITIGATION
Sustainability and ESG considerations are managed through clear frameworks,
ongoing transition plans and stakeholder engagement.
There is a strong focus on continuous monitoring and embedding sustainability
into day-to-day operations.
The Group Sustainability Committee oversees progress of sustainability work
across the Group, including reviewing strategic priorities and operational
objectives, reviewing sustainability-related risks and opportunities, and
allocating resource and budget.
RECENT CHANGE / OUTLOOK
COP30 was the 30th annual United Nations (UN) climate meeting. For financial
services firms, COP30 signals sustained regulatory and market pressure to
integrate climate-related risks into governance, scenario analysis, and
investment decision making, particularly in relation to transition and
physical climate risks and evolving disclosure expectations across
jurisdictions.
The UK has been consulting on UK Sustainability Reporting Standards (SRS)
aligned with the IFRS/ISSB global baseline, with consultation activity during
2025 and expected further steps toward mandatory adoption including FCA
consultation on how to introduce them for listed firms. This marks a move
toward enhanced climate and wider sustainability disclosures for financial
firms.
In late 2025 the European Commission proposed amendments to the Sustainable
Finance Disclosure Regulation, seeking simpler, more usable sustainability
disclosures for financial products, revised categories
(sustainable/transition/ESG basics) and clearer criteria to reduce
greenwashing and compliance burdens. The Commission also advanced measures to
delay or narrow the scope of the Corporate Sustainability Reporting Directive
(CSRD).
PR4: OPERATIONAL RISK
The Group and its subsidiaries are exposed to operational risks which arise
through daily activities and running of the business. Operational risks may,
for example, arise due to technical or human errors, failed internal
processes, insufficient personnel resources or fraud caused by internal or
external persons. As a result, the Group may suffer financial losses, poor
customer outcomes, reputational damage, regulatory intervention or business
plan failure. Errors, omissions, or non-compliance in financial or regulatory
reporting can undermine stakeholder confidence and lead to regulatory
enforcement.
Severe disruptions or failures in critical business services whether due to
technology failure, process breakdown, or other event may materially impact
our ability to serve customers and meet our business objectives. Part of the
Group's operating model is to outsource support activities to specialist
service providers. Consequently, a significant element of the operational risk
arises within its outsourced providers.
PR4.1
SUB RISK
Severe disruptions or failures in critical business services could
significantly impact operations and delivering positive outcomes for
customers.
RISK APPETITE
The Group aims to minimise its exposure to this risk, to the extent possible,
but acknowledges that it may need to accept some risk as a result of carrying
out business.
MITIGATION
Critical business service continuity is supported through comprehensive
resilience and continuity planning, scenario analysis, and structured incident
response. By anticipating and identifying disruptions early, we can maintain
operational stability and timely recovery.
RECENT CHANGE / OUTLOOK
The risk of disruption to critical business services is impacted by increased
cyber threat activity, increased reliance on complex and interconnected third
party service providers, and ongoing technology change across the financial
services sector.
There is continued regulatory focus as the UK Operational Resilience and EU
DORA regimes mature, with increased expectations for demonstrable resilience
of critical business services and effective oversight of critical third
parties.
Each business unit continues to carry out assurance activities through local
resilience and business continuity programmes to ensure robust plans are in
place to limit business disruption in a range of severe but plausible events.
PR4.2
SUB RISK
The risk that statutory reporting (financial and regulatory reports) includes
material misstatements or non-compliance issues.
RISK APPETITE The Group's approach is to minimise and actively manage the risk of material
misstatement or non-compliance in statutory financial and regulatory
reporting. The Group maintains robust controls and oversight to ensure the
accuracy, completeness, and compliance of its disclosures.
MITIGATION
Rigorous reporting and controls processes, robust frameworks and proactive
oversight ensure adherence to regulatory requirements and timely reporting.
Monitoring and validation help ensure the accuracy and reliability of
financial and regulatory reports.
RECENT CHANGE / OUTLOOK
Developments such as evolving accounting standards, regulatory reporting
reforms, and enhanced expectations for data quality, governance, and controls
continue to place a strong emphasis on the integrity of statutory and
regulatory reporting.
Regulatory expectations around climate-related and sustainability disclosures
continue to increase in scope, consistency, and assurance across the UK and
EU.
The Financial Reporting Council (FRC) published the updated UK Corporate
Governance Code in January 2024. Most of the changes in the 2024 Code took
effect for financial years beginning on or after 1 January 2025 with a
stronger emphasis on board accountability, internal controls, and reporting
transparency. A key new requirement Provision 29, which asks boards to make a
formal annual declaration on the effectiveness of their material risk
management and internal control frameworks will apply to financial years
beginning on or after 1 January 2026.
PR4.3
SUB RISK
Risk that intentional acts of fraud whether internal (by employees or
management) or external (by customers, vendors, or third parties) could lead
to financial loss, regulatory sanctions, reputational damage, and erosion of
client trust.
RISK APPETITE
The Group aims to minimise any exposure to this risk, to the extent possible,
but acknowledges that it may need to accept some risk as a result of carrying
out business. Any suspected or confirmed incidents are escalated and managed
promptly.
MITIGATION
Fraud risk is managed through strong governance, clear accountability and
continuous monitoring.
Frameworks, oversight and reporting mechanisms support the detection and
investigation of potential fraud.
RECENT CHANGE / OUTLOOK
In September 2025, a new UK law came into effect under the Economic Crime and
Corporate Transparency Act 2023. It introduces a corporate offence of failing
to prevent fraud, aimed at strengthening how organisations tackle economic
crime. Organisations may be held criminally liable if an associated person
such as an employee, agent, subsidiary, or someone acting for the organisation
commits a fraud offence intended to benefit the organisation (or its clients),
unless the organisation can demonstrate it had 'reasonable fraud prevention
procedures' in place. If found liable, the organisation may face unlimited
fines, regardless of whether senior management was aware of the fraud.
Chesnara has taken steps to ensure our responsibilities under the new law are
met by putting in place measures based on the government's six key principles
for fraud prevention.
PR4.4
SUB RISK
Risk that counterparties, outsourced service providers (OSPs), or third
parties may default on contractual obligations or fail to deliver critical
business services as agreed.
RISK APPETITE The Group aims to minimise risks arising from counterparty or third-party
failure through due diligence and active oversight.
MITIGATION
Risks from counterparties, OSPs and third-party providers are managed through
careful selection and onboarding processes.
Ongoing oversight and monitoring of key performance indicators is carried out
through comprehensive management information flows.
RECENT CHANGE / OUTLOOK
Ongoing economic uncertainty, higher interest rates, market volatility
increases pressure on the financial resilience of a wide range of
counterparties including suppliers, intermediaries, and service providers.
UK and EU regulators are increasing scrutiny of firms' management of
counterparty and third-party risk, including oversight of critical suppliers,
credit exposures, and downstream impacts on customers and market integrity. We
maintain oversight of our third party contractual relationships and have
identified our material third-party relationships in line with the relevant
requirements.
Regulators have continued to emphasise the importance of robust counterparty
risk management, including financial assessment, concentration risk,
contractual protections, and contingency planning. We monitor our counterparty
and concentration risk exposures against our defined risk appetite tolerances
on a quarterly basis.
PR5: IT/ DATA SECURITY RISK
IT and data security risk could have a material impact on the Group's
operational resilience, financial performance and reputation. As a custodian
of sensitive customer and business data, the Group is exposed to information
security risks arising from failures in internal systems, processes or
controls, as well as from increasingly sophisticated malicious cyber activity,
including targeted attacks, malware, phishing and ransomware. The Group's
exposure is further influenced by its reliance on third-party service
providers, which may introduce additional vulnerabilities.
A significant cyber or data security incident could result in financial
losses, regulatory sanctions, or remediation and recovery costs, as well as
the inability to perform critical business functions or deliver services to
policyholders. The loss, corruption or unauthorised disclosure of sensitive
data could lead to reputational damage, reduced stakeholder confidence and
adverse regulatory outcomes.
PR5.1
SUB RISK
Risk that cyber-attacks or failures in IT data security controls could
compromise the confidentiality, integrity, or availability of information
systems and data.
RISK APPETITE
The Group aims to minimise its exposure to this risk, to the extent possible,
but acknowledges that it may need to accept some risk as a result of carrying
out business.
MITIGATION
Robust IT frameworks, continuous monitoring and proactive vulnerability
testing are in place to support the protection of data confidentiality,
integrity and availability.
Technical controls are supported by routine penetration and vulnerability
testing across internal systems and key third-party service providers.
A comprehensive security awareness programme is in place, including regular
staff training and periodic employee phishing simulations.
Implementation of disaster recovery and business continuity plans, which are
regularly reviewed, tested, and monitored to ensure operational resilience and
timely recovery in the event of a security incident or system disruption.
Chesnara has cyber insurance in place which covers all of the UK operations
including Head Office. Elsewhere in the Group, where cyber insurance is not in
place, we are able to access support and resources (e.g. forensic analysis)
through existing contracts with third parties.
RECENT CHANGE / OUTLOOK
The Group continues to invest in the incremental strengthening of its cyber
risk resilience and response options.
Cyber risk remains elevated and persistent, driven by evolving threat actors,
geopolitical tensions, and increased system interconnectivity across the
financial sector.
The growing use of AI and automation introduces additional risks related to
model security, data integrity, and control transparency.
Regulators continue to treat cyber security and IT resilience as core
supervisory priorities for financial services firms. In the UK, the FCA, PRA
and Bank of England have reinforced expectations under the operational
resilience framework and introduced the Critical Third Parties (CTP) regime,
extending regulatory oversight to key technology and service providers whose
disruption could threaten financial stability. In the EU, DORA introduces
harmonised and more prescriptive requirements for ICT risk management, cyber
incident reporting, resilience testing, and oversight of critical ICT
third-party providers.
PR6: REGULATORY RISK
Chesnara currently operates in three main regulatory domains and is therefore
exposed to potential for inconsistent application of regulatory standards
across divisions, such as the imposition of higher capital buffers over and
above regulatory minimum requirements. Potential consequences of this risk for
Chesnara are the constraining of efficient and fluid use of capital within the
Group or creating a non-level playing field with respect to future new
business/acquisitions.
Regulatory developments continue to drive a high level of change activity
across the Group, with items such as operational resilience, climate related
regulation, consumer protection and ESG related reporting being particularly
high profile. Such regulatory initiatives carry the risk of expense overruns
should it not be possible to adhere to them in a manner that is proportionate
to the nature and scale of Chesnara's businesses. The Group is therefore
exposed to the risk of:
- incurring one-off costs of addressing regulatory change as well
as any permanent increases in the cost base in order to meet enhanced ongoing
standards;
- erosion in value arising from regulatory intervention which
impacts the economics of our business, e.g. enforcing a reduction in future
policy charges;
- erosion in value arising from pressure or enforcement to
financially compensate for past practice or failure; and
- regulatory fines or censure in the event that it fails to
deliver changes to the required regulatory standards on a timely basis.
The Group is also exposed to the risk of non-compliance with existing or
evolving regulatory requirements, across a range of areas (e.g. tax, law,
employment practices) and territories, resulting in a high level of complexity
Compliance failures could result in supervisory intervention, enforcement
action or restrictions on business activities.
PR6.1
SUB RISK The risk of regulatory failure, including failure to comply with regulations
or meet regulatory expectations, as well as adverse changes in regulator or
industry practices or the inconsistent interpretation and application across
jurisdictions.
RISK APPETITE
The Group aims to minimise any exposure to this risk, to the extent possible,
but acknowledges that it may need to accept some risk as a result of carrying
out business.
MITIGATION Regulatory obligations are managed through strong open relationships with all
regulators and continuous monitoring of regulatory developments and industry
practices.
Processes and frameworks are designed to prevent breaches and ensure
operations remain aligned with regulatory expectations across jurisdictions.
This is supported by performing regular internal reviews of compliance with
regulations.
Scenario tests are performed to understand the potential impacts of adverse
political, regulatory or legal changes, along with consideration of actions
that may be taken to minimise the impact, should they arise.
RECENT CHANGE / OUTLOOK
There continues to be active regulatory agendas across the territories in
which we operate, with the potential for divergence of regulatory approaches
amongst European regulators with possible implications for the Group's
capital, regulatory supervision and structure. The announcement of the
proposed acquisition of Scottish Widows Europe SA in Luxembourg means we will
be operating in a new territory and with a new European regulator.
The European Parliament approved the final text of the Solvency II review in
2024 with the Solvency II Directive amended on 5 November 2024. Following this
a consultation on the next level of regulation - the Level 2 Delegated
Regulation - was launched in July 2025, and at the end of October 2025 the
final version of the Solvency II Delegated Regulation was adopted. The next
steps are for this to be subject to scrutiny by the EU Parliament and Council.
The final version is expected to enter into force from 30 January 2027.
The Group is subject to evolving regimes governing the recovery, resolution or
restructuring of insurance companies. As part of the global regulatory
response to the risk of failure of systemically important financial
institutions, banks and insurance companies have been the focus of new
recovery and resolution planning requirements developed by regulators and
policy makers. In the UK the PRA and FCA guidance encourages firms to embed
exit strategies into risk management frameworks and stress test scenarios to
ensure that even in adverse conditions, obligations can be met without
requiring an insolvency process. The PRA's solvent exit planning rules and
expectations are due to come into force on 30 June 2026.
There continues to be a strong focus on consumer protection. Following the
implementation of Consumer Duty the FCA outlined priority focus areas through
2025/26, including fair value, vulnerable customers, monitoring outcomes and
how the Duty applies across distribution chains. It is expected there will be
further consultations in 2026. In addition, the FCA has confirmed that it
will, together with the Information Commissioners Office (ICO), provide
further clarity on the interaction between expectations on balancing
vulnerability, data sharing and data protection. Guidance is expected to be
published in Q1 of 2026.
DIRECTORS' REsponsibilities STATEMENT
With regards to this preliminary announcement, the Directors confirm to the
best of their knowledge that:
The financial statements have been prepared in accordance with United Kingdom
adopted international accounting standards and give a true and fair view of
the assets, liabilities, financial position and profit for the Company and the
undertakings included in the consolidation as a whole;
Pursuant to Disclosure and Transparency Rules Chapter 4, the Chairman's
Statement and Management Report include a fair review of the development and
performance of the business and the position of the Company and the
undertakings included in the consolidation taken as a whole, together with a
description of the principal risks and uncertainties faced by the business.
On behalf of the Board
Luke Savage Steve Murray
Chairman Chief
Executive Officer
INDEPENDENT AUDITOR'S REPORT TO THE SHAREHOLDERS OF CHESNARA PLC ON THE
PRELIMINARY ANNOUNCEMENT OF CHESNARA PLC
As the independent auditor of Chesnara plc we are required by UK Listing Rule
LR 9.7A.1(2)R to agree to the publication of Chesnara plc's preliminary
announcement statement of annual results for the period ended 31 December
2025.
The preliminary statement of annual results for the period ended 31 December
2025 includes disclosures required by the Listing Rules and additional content
such as 2025 Financial Highlights, the Chair's Statement, Chief Executive
Officer's Report and Chief Financial Officer's Report, Report, Business
Review, Financial Review, Consolidated Statement of Comprehensive Income,
Consolidated Balance Sheet, Consolidated Statement of Cash flows, Consolidated
Statement of Changes in Equity and certain notes to the consolidated financial
statements. We are not required to agree to the publication of presentations
to analysts.
The directors of Chesnara plc are responsible for the preparation,
presentation and publication of the preliminary statement of annual results in
accordance with the UK Listing Rules.
We are responsible for agreeing to the publication of the preliminary
statement of annual results, having regard to the Financial Reporting
Council's Bulletin "The Auditor's Association with Preliminary Announcements
made in accordance with UK Listing Rules".
Status of our audit of the financial statements
Our audit of the annual financial statements of Chesnara plc is complete and
we signed our auditor's report on 23 March 2026. Our auditor's report is not
modified and contains no emphasis of matter paragraph.
Our audit report on the full financial statements sets out the following key
audit matters which had the greatest effect on our overall audit strategy; the
allocation of resources in our audit; and directing the efforts of the
engagement team, together with how our audit responded to those key audit
matters and the key observations arising from our work:
Expense assumptions used in the valuation of insurance contract liabilities
Key audit matter description
The group's insurance contract liabilities are one of the largest balances on
the balance sheet, held at £3.9bn (2024: £4.1bn) at 31 December 2025. The
valuation of insurance contract liabilities is determined using actuarial
assumptions that require complex judgments and forward-looking estimates made
by management. A number of the assumptions, such as mortality and morbidity,
economic assumptions and lapse rates, are made with reference to industry
tables and actual experience, thereby reducing the susceptibility of these
assumptions to manipulation and bias.
The expense assumptions require management to make significant judgments and
estimates relating to the future expenses attributable to insurance contracts.
The risk associated with the expense assumptions is higher than other
actuarial assumptions as a result of:
· planned changes to the policy administration outsourcing
arrangements of CA plc, including the anticipated costs and timing of
migration and termination;
· the judgment involved in assessing the impacts that the merger of
the former-Scildon and former-Waard divisions will have on the future
cost-base of the Netherlands division;
· the impact of inflation on future expenses in the short- and
long-term, particularly given recent changes in the group's macroeconomic
environments; and
· uncertainties in the costs of maintaining insurance portfolios in
run-off, particularly where variable cost assumptions are used.
Given the significance of the insurance contract liabilities held within CA
plc (£1.3bn) and the Netherlands (£2.4bn), as well as the division-specific
matters outlined above, our key audit matter was pinpointed to the expense
assumptions within these divisions. As the expense assumptions are susceptible
to manipulation by management, impacting its reported profit before taxation
and net assets, we determined that there was a risk of material misstatement
due to fraud and therefore identified this area as a key audit matter.
How the scope of our audit responded to the key audit matter
In respect of the expense assumptions used in the valuation of insurance
contract liabilities, we performed the following procedures:
· obtained an understanding of relevant controls in place around
management's assumption setting processes at the group and divisional-level;
· with the involvement of actuarial specialists, evaluated the
appropriateness of expense assumptions and methodology. Our assessment
considered the reasonableness of forecasts for future periods with reference
to the group's internal and external business environments, the impacts of any
planned management actions, and whether the assumptions have been subject to
management bias;
· tested actual expenses in the year-ended 31 December 2025 and
compared these to management's previous forecasts to understand the predictive
accuracy of management's process;
· assessed the mechanical accuracy of management's underlying
expense calculations, verifying that management's selected methodology had
been applied correctly; and
· assessed the appropriateness of the disclosures within the
financial statements in relation to expense assumptions used in the valuation
of the underlying insurance contract liabilities.
Key observations
Based on the procedures performed, we consider the expense assumptions used in
the valuation of insurance contract liabilities and related disclosures to be
appropriate.
Valuation of Chesnara plc's investment in Countrywide Assured plc ('CA plc')
Key audit matter description
Chesnara plc holds investments in subsidiaries totalling £361.7m (2024:
£389.9m) on its parent company balance sheet, measured at cost less
cumulative impairment losses.
In line with IAS 36 'Impairment of Assets', management are required to carry
out an impairment assessment if there is an indication of impairment loss at
the balance sheet date. Through its assessment, management evaluated whether
the investment in CA plc was carried at less than its recoverable amount,
which is the higher of fair value less costs of disposal and value in use, and
therefore whether an impairment is required.
In recent years, management have recognised impairment losses in respect of
the CA plc business as dividends paid to the parent company have exceeded its
annual earnings. The impairment assessment performed at the balance sheet
highlighted £28.2m (2024: £4.0m) of impairment over the carrying value of
the investment, with the recoverable amount determined using the 'value in
use' method permitted by IAS 36. Management's value in use calculations
involved forward-looking dividend forecasts based on the emergence of
surpluses for CA plc's in-force business on a Solvency II basis, as well as
assumptions regarding the pattern and period over which its business will
run-off in the long-term.
Due to the potential for management to introduce inappropriate bias to
estimates made in the impairment assessment when determining the value in use,
with impairment losses impacting the parent company income statement and
balance sheet, we determined that there was a risk of material misstatement
due to fraud and therefore identified this area as a key audit matter.
How the scope of our audit responded to the key audit matter
In respect of the valuation of Chesnara plc's investment in CA plc, we
performed the following procedures:
· obtained an understanding of relevant controls in place over
management's impairment assessment and value in use calculation processes;
· evaluated management's methodology for determining the
recoverable amount of CA plc in accordance with IAS 36;
· challenged the reasonableness of management's dividend forecasts
and long-term assumptions regarding the run-off of CA plc's in-force business,
with reference to our knowledge of CA plc's internal and external business
environments and recently observed performance;
· with the involvement of valuation specialists, challenged the
reasonableness of discount rate assumptions used; and
· evaluated the appropriateness of disclosures included in Note A5
of the financial statements within the Annual Report and Accounts.
Key observations
Based on the procedures performed, we consider the carrying value of Chesnara
plc's investment in CA plc to be appropriate.
These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we did not
provide a separate opinion on these matters.
Procedures performed to agree to the preliminary announcement of annual
results
In order to agree to the publication of the preliminary announcement of annual
results of Chesnara plc we carried out the following procedures:
(a) checked that the figures in the preliminary announcement covering the
full year have been accurately extracted from the audited or draft financial
statements and reflect the presentation to be adopted in the audited financial
statements;
(b) considered whether the information (including the management commentary)
is consistent with other expected contents of the annual report;
(c) considered whether the financial information in the preliminary
announcement is misstated;
(d) considered whether the preliminary announcement includes a statement by
directors as required by section 435 of CA 2006 and whether the preliminary
announcement includes the minimum information required by UKLA Listing Rule
9.7A.1;
(e) where the preliminary announcement includes alternative performance
measures ("APMs"), considered whether appropriate prominence is given to
statutory financial information and whether:
· the use, relevance and reliability of APMs has been explained;
· the APMs used have been clearly defined, and have been given
meaningful labels reflecting their content and basis of calculation;
· the APMs have been reconciled to the most directly reconcilable
line item, subtotal or total presented in the financial statements of the
corresponding period; and
· comparatives have been included, and where the basis of
calculation has changed over time this is explained.
(f) read the management commentary, any other narrative disclosures and
any final interim period figures and considered whether they are fair,
balanced and understandable.
Use of our report
Our liability for this report, and for our full audit report on the financial
statements is to the company's members as a body, in accordance with Chapter 3
of Part 16 of the Companies Act 2006. Our audit work has been undertaken so
that we might state to the company's members those matters we are required to
state to them in an auditor's report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility to anyone
other than the company and the company's members as a body, for our audit
work, for our audit report or this report, or for the opinions we have formed.
Matthew Bainbridge (Senior statutory auditor)
For and on behalf of Deloitte LLP
Statutory Auditor
Leeds, United Kingdom
23 March 2025
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Year ended 31 December 2025 2024
£m £m
Insurance revenue 227.0 261.9
Insurance service expense (208.1) (244.1)
Net expenses from reinsurance contracts held 3.0 (9.2)
Insurance service result 21.9 8.6
Net investment return 649.2 1,286.1
Net finance (expenses) / income from insurance contracts issued (205.6) (334.8)
Net finance income / (expenses) from reinsurance contracts held 14.2 2.6
Net change in investment contract liabilities (345.2) (740.4)
Change in liabilities relating to policyholders' funds held by the group (62.4) (160.8)
Net investment result 50.2 52.7
Fee, commission and other operating income 114.2 104.2
Total revenue net of investment result 186.3 165.5
Other operating expenses (156.1) (133.6)
Total income less expenses 30.2 31.9
Financing costs (11.4) (11.1)
Profit / (loss) before income taxes 18.8 20.8
Income tax credit (29.2) (16.9)
Profit / (loss) for the period (10.4) 3.9
Items that may be reclassified subsequently to profit and loss:
Foreign exchange translation differences arising on the revaluation of foreign 20.5 (15.3)
operations
Revaluation of land and building - 0.4
Items that will not be reclassified to profit and loss:
Revaluation of pension obligations after tax 2.1 -
Other comprehensive (expense) / income for the period, net of tax 22.6 (14.9)
Total comprehensive income / (expense) for the period 12.2 (11.0)
Basic earnings per share (based on profit or loss for the period) (5.05p) 2.27p
Diluted earnings per share (based on profit or loss for the period) (5.05p) 2.23p
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
2025 2024
£m £m
Assets
Intangible assets 89.4 87.2
Property and equipment 7.6 7.8
Investment properties 91.0 91.7
Deferred tax assets 31.8 38.9
Insurance contract assets - 1.8
Reinsurance contract assets 168.0 169.9
Amounts deposited with reinsurers 35.0 34.3
Financial investments 13,948.2 12,116.7
Derivative financial instruments 0.9 0.1
Other assets 58.8 68.7
Cash and cash equivalents 145.3 138.0
Total assets 14,576.0 12,755.1
Liabilities
Insurance contract liabilities 3,940.7 4,099.1
Reinsurance contract liabilities 10.5 16.6
Other provisions 21.7 20.3
Investment contracts at fair value through profit or loss 6,717.0 6,116.7
Liabilities relating to policyholders' funds held by the group 2,938.5 1,825.5
Lease contract liabilities 1.7 0.6
Borrowings 203.0 204.8
Derivative financial instruments 0.1 0.6
Deferred tax liabilities 48.3 24.7
Deferred income 1.1 1.3
Other current liabilities 129.5 129.7
Bank overdrafts 0.6 0.8
Total liabilities 14,012.7 12,440.7
Net assets 563.3 314.4
Shareholders' equity
Share capital 11.5 7.5
Share premium 270.9 142.5
Merger reserve 36.3 36.3
Tier 1 Notes 147.8 -
Treasury shares (1.0) -
Other reserves 14.2 (8.4)
Retained earnings 83.6 136.5
Total shareholders' equity 563.3 314.4
Approved by the Board of Directors and authorised for issue on 23 March 2026
and signed on its behalf by:
Luke Savage Steve Murray
Chairman Chief Executive Officer
CONSOLIDATED STATEMENT OF CASH FLOWS
Year ended 31 December
2025 2024
(restated)
£m £m
Profit / (Loss) for the period (10.4) 3.9
Adjustments for:
Depreciation of property and equipment 1.0 0.9
Depreciation on right of use assets 0.6 0.8
Amortisation and impairment of intangible assets 16.7 16.1
Share based payment (0.5) 2.0
Tax expense 29.2 16.9
Interest receivable (22.6) (18.5)
Dividends receivable (29.7) (34.9)
Interest expense 11.3 10.5
Fair value gains on financial assets and investment properties (649.2) (1,286.1)
Increase in intangible assets related to investment contracts (10.9) (11.3)
Adjustment total (654.1) (1,303.6)
Interest received 21.5 18.1
Dividends received 29.1 35.2
Changes in operating assets and liabilities:
(Increase) / decrease in financial assets and investment properties (394.3) 156.1
(Increase) / decrease in net reinsurance contract assets (3.2) 14.8
Increase in amounts deposited with reinsurers (0.8) (1.8)
Decrease in other assets 52.6 16.2
(Decrease) / increase in net insurance contract liabilities (318.2) 35.7
Increase in investment contract liabilities 1,093.9 1,121.0
Increase / (decrease) in provisions 0.7 (2.2)
Decrease in other current liabilities (36.1) (53.7)
Cash (utilised)/ generated by operations (219.3) 39.7
Income tax (paid)/recovered (0.5) 3.7
Net cash (utilised)/generated from operating activities (219.8) 43.4
Cash flows from investing activities
Clawback of consideration for acquisition of a subsidiary - 1.0
Net purchases of property and equipment (0.9) (0.8)
Net cash (utilised)/generated by investing activities (0.9) 0.2
Cash flows from financing activities
Net proceeds from the rights issue 136.4 -
Transaction costs related to rights issue (4.0) -
Net proceeds from the issue of Tier 1 Notes 148.7 -
Transaction costs related to issue of Tier 1 Notes (0.9) -
Repayment of borrowings (1.8) (2.6)
Repayment of lease liabilities (0.6) (0.3)
Purchase of treasury shares (1.0) -
Dividends paid (42.0) (36.5)
Interest paid (11.0) (10.3)
Net cash generated/(utilised) by financing activities 223.8 (49.7)
Net increase / (decrease) in cash and cash equivalents 3.1 (6.1)
Net cash and cash equivalents at beginning of period 137.2 145.9
Effect of exchange rate changes on net cash and cash equivalents 4.4 (2.6)
Net cash and cash equivalents at end of the period 144.7 137.2
Note: Net cash and cash equivalents include overdrafts.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share capital Share premium Merger reserve Tier 1 Notes Treasury shares Other reserves Retained earnings Total
Year ended 31 December 2025
£m £m £m £m £m £m £m £m
Equity shareholders' funds at 1 January 2025 7.5 142.5 36.3 - - (8.4) 136.5 314.4
Profit for the year - - - - - - (10.4) (10.4)
Foreign exchange translation differences - - - - - 20.5 - 20.5
Other items of comprehensive income - - - - - 2.1 - 2.1
Total comprehensive income - - - - - 22.6 (10.4) 12.2
Issue of new ordinary shares 4.0 128.4 - - - - - 132.4
Issue of Tier 1 Notes - - - 147.8 - - - 147.8
Dividends paid - - - - - - (42.0) (42.0)
Shares purchased by the employee benefit trust - - - - (1.0) - - (1.0)
Share based payment - - - - - - (0.5) (0.5)
Equity shareholders' funds at 31 December 2025 11.5 270.9 36.3 147.8 (1.0) 14.2 83.6 563.3
Year ended 31 December 2024 Share capital Share premium Merger reserve Tier 1 Notes Treasury shares Other reserves Retained earnings Total
£m £m £m £m £m £m £m £m
Equity shareholders' funds at 1 January 2024 7.5 142.5 36.3 - - 6.5 167.0 359.8
Profit for the year - - - - - - 3.9 3.9
Foreign exchange translation differences - - - - - (15.3) - (15.3)
Other items of comprehensive income - - - - - 0.4 - 0.4
Total comprehensive income - - - - - (14.9) 3.9 (11.0)
Dividends paid - - - - - - (36.5) (36.5)
Share based payment - - - - - - 2.1 2.1
Equity shareholders' funds at 31 December 2024 7.5 142.5 36.3 - - (8.4) 136.5 314.4
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1 Basis of preparation
The consolidated and parent company financial statements have been prepared on
a going concern basis. The directors believe that they have a reasonable
expectation that the group has adequate resources to continue in operational
existence for a minimum of twelve months from the date of signing. In making
this assessment, the directors have taken into consideration the points as set
out in the Financial Management section of the Annual Report and Accounts
under the heading 'Maintain the group as a going concern'.
The consolidated and Parent Company financial statements have been prepared on
a going concern basis. The directors believe that they have a reasonable
expectation that the group has adequate resources to continue in operational
existence for a minimum of twelve months from the date of signing. In making
this assessment, the directors have taken into consideration the points as set
out in the Financial Management section of the Annual Report and Accounts
under the heading 'Maintain the group as a going concern'.
The financial statements are presented in pounds sterling, rounded to the
nearest one hundred thousand, and are prepared on the historical cost basis
except for insurance and reinsurance contracts which are stated at their
fulfilment value in accordance with IFRS 17 and the following assets and
liabilities which are stated at their fair value: derivative financial
instruments; financial instruments at fair value through profit or loss;
investment property; and investment contract liabilities at fair value through
profit or loss.
Assets and liabilities are presented in order of increasing liquidity in the
statement of financial position. In addition, amounts expected to be
recovered or settled within a year are classified as current in the notes to
the accounts. If they are expected to be recovered or settled in more than one
year, they are classified as non-current in the notes to the accounts.
The preparation of financial statements in conformity with IFRSs requires
management to make judgements, estimates and assumptions that affect the
application of policies and reported amounts of assets and liabilities, income
and expenses. The estimates and associated assumptions are based on historical
experience and various other factors that are believed to be reasonable under
the circumstances, the results of which form the basis of making the
judgements about carrying values of assets and liabilities that are not
readily apparent from other sources. Actual results may differ from these
estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis.
The Group prepares interim financial statements at half-year and as permitted
by IFRS 17 has elected to apply the 'year-to-date' method and restate
estimates in respect of insurance contracts made in the previous interim
financial statements, in these year-end financial statements. This accounting
policy election applies to all groups of insurance and reinsurance contracts.
The accounting policies, unless otherwise stated, have been applied
consistently to all years presented in these consolidated financial
statements.
The consolidated financial statements have been prepared in accordance with
United Kingdom adopted international accounting standards in conformity with
the requirements of the Companies Act 2006. Both the parent company financial
statements and the group financial statements have been prepared and approved
by the directors in accordance with United Kingdom adopted international
accounting standards.
Restatement of prior year numbers
A prior year restatement has been applied in respect of the presentation of
policyholder yield taxes paid in Sweden within the consolidated statement of
cash flows.
In the previously reported financial statements for the year ended 31 December
2024, policyholder yield taxes totalling £40.8m were previously presented as
'income taxes paid'. These taxes are incurred when related investment
transactions are settled and do not form part of the Group's income tax
expense within the consolidated statement of comprehensive income. The impacts
of this restatement are shown in the table below:
As reported Restated
£m £m
Increase / (decrease) in other current liabilities (12.9) (53.7)
Cash generated / (utilised) by operations 80.5 39.7
Income tax (paid) / recovered (37.1) 3.7
Net cash generated / (utilised) from operating activities 43.4 43.4
The above restatement has no impact on the net cash generated from operating
activities or any other areas of the consolidated financial statements.
Standards and amendments issued but not yet effective
At the date of authorisation of these financial statements the following
standards and interpretations, which are applicable to the group, and which
have not been applied in these financial statements, were in issue but not yet
effective:
Title Effective date
IFRS 9 / IFRS 7 Amendments to the classification and measurement of financial 1 January 2026
instruments
IFRS 18 Presentation and disclosure financial statements 1 January 2027
IFRS 19 Subsidiaries without public accountability 1 January 2027
The directors do not expect that the adoption of the IFRS 9 / IFRS 7
amendments have a material impact on the financial statements of the group in
future periods. The directors expect that the adoption of IFRS 18 will have a
material impact on the presentation of the primary statements in future
periods. The directors do not expect that the adoption of IFRS19 will have a
material impact of the financial statements of the group in future periods.
BEPS 2.0
The Organisation for Economic Cooperation and Development's (OECD) Pillar Two
rules introduce a global minimum effective tax rate of 15% for multinational
enterprise groups with consolidated revenue of at least €750m in at least
two of the preceding four years. The Chesnara Group operates in the United
Kingdom, Sweden and the Netherlands, all of which have now enacted domestic
Pillar Two legislation and continue to refine those rules through technical
amendments and administrative guidance.
Chesnara's consolidated revenues remain below the €750m threshold and the
Group therefore continues to be out of scope of the Pillar Two rules for the
year ended 31 December 2025. . For the purpose of assessing the Pillar Two
revenue threshold, consolidated revenue is determined in accordance with IFRS
and excludes amounts relating to unit-linked policyholder investment returns,
which are economically attributable to policyholders rather than the Group.
Accordingly, no amounts in respect of Pillar Two current or deferred tax have
been recognised in these financial statements and the Group applies the
temporary exception from recognising and disclosing deferred taxes arising
from Pillar Two income taxes.
The Group continues to monitor the implementation of Pillar Two in the UK,
Sweden and the Netherlands, including technical amendments incorporating OECD
administrative guidance across jurisdictions (notably the interpretation and
application of OECD guidance in Sweden in connection with insurance investment
funds) as well as the development of safe harbours and associated reporting
requirements. In doing so, the Group assesses the impact of business growth
and future acquisitions, effective tax rates across jurisdictions and the
interaction of local tax regimes with GloBE rules. Based on our assessment as
at 31 December 2025, no Pillar Two top-up tax exposure is expected and no
additional IAS 12 disclosures are required.
2 Significant accounting judgements and estimates
The critical accounting judgements and key sources of estimation and
uncertainty remain largely unchanged from those described in Note A5 of the
205 Annual Report and Accounts. The potential impact on the group has been
considered in the preparation of these financial statements, including
management's evaluation of critical accounting judgements and estimates.
Further information on discount rates applied in these financial statements is
provided below.
Cash flows are discounted using currency-specific, risk-free yield curves
adjusted for the characteristics of the cash flows and the liquidity of the
insurance contracts. The group applies a 'bottom-up' approach to determining
discount rates and follows the methodology used by the PRA and EIOPA to
determine risk-free yield curves and ultimate forward rates for regulatory
solvency calculations. To reflect the liquidity or otherwise of the insurance
contracts, the risk-free yield curves are adjusted by an illiquidity premium,
which is aligned to the SII volatility adjustment.
For certain Dutch 'savings mortgage' products, there is a direct connection to
the policyholder's mortgage loan and the premiums to repay the loan in that
the crediting rate is set such that the account value will be equal to the
balance on the loan at maturity. For this product, the cash flows are
discounted using the same curve used to value the corresponding mortgage
assets which itself is derived from mortgage rates available in the market.
The cash flows are discounted using a discount rate that adjusts risk-free
yields for portfolio specific characteristics, with differences in liquidity
characteristics between the financial assets used to derive the risk-free
yield and the relevant liability cash flows (known as an illiquidity premium).
Inflation rates mainly relate to expense inflation. The assumptions in respect
of expense inflation reflect the group's best estimate view incorporating
market consistent data such as earnings indices and central bank inflation
targets.
3 Earnings per share
Earnings per share are based on the following:
Year ended 31 December 2025 2024
(Loss)/profit for the year attributable to shareholders (£m) (10.4) 3.9
Weighted average number of ordinary shares 205,240,821 150,938,024
Basic earnings per share (5.05)p 2.27p¹
Diluted earnings per share (5.05)p 2.23p¹
¹A rights issue was effected in July 2025, on the basis of 10 new ordinary
shares for every 19 existing ordinary shares. The issue was fully underwritten
at 176p per share to raise gross proceeds of approximately £140 million. An
adjustment has been made to the 2024 earnings per share to account for the
effect of the bonus element of the rights issue.
The weighted average number of ordinary shares in respect of the year ended 31
December 2025 is based upon 230,533,743 shares in issue at the year end date,
excluding treasury shares. Shares held in treasury relate to shares held by
the Employee Benefit Trust.
There were 2,871,227 share options outstanding at 31 December 2025 (2024:
2,330,118). Accordingly, there is dilution of the average number of ordinary
shares in issue in respect of 2024 but no dilution in 2025, due to the loss.
4 Retained earnings
Group
Year ended 31 December
2025 2024
£m £m
Retained earnings attributable to equity holders of the parent company
comprise:
Balance at 1 January 136.5 167.0
Profit / (loss) for the year (10.4) 3.9
Share based payment (0.5) 2.1
Dividends
Final approved and paid for 2023 - (23.5)
Interim approved and paid for 2024 - (13.0)
Final approved and paid for 2024 (24.3) -
Interim approved and paid for 2025 (17.7) -
Balance at 31 December 83.6 136.5
A final dividend of 14.80p per share in respect of the year ended 31 December
2025 payable on 20 May 2026 to equity shareholders of the parent company
registered at the close of business on 7 April 2026, the dividend record date,
was approved by the directors after the year-end date. The resulting total
final dividend of £34.2m has not been provided for in these financial
statements and there are no income tax consequences.
The interim dividend in respect of 2025, approved and paid in 2025, was paid
at the rate of 7.70p per share to equity shareholders of the parent company
registered at the close of business on 5 September 2025, the dividend record
date.
The interim dividend in respect of 2024, approved and paid in 2024 was paid at
the rate of 8.61p per share. The final dividend in respect of 2024, approved
and paid in 2025, was paid at the rate of 16.08p per share so that the total
dividend paid to the equity shareholders of the parent company in respect of
the year ended 31 December 2024 was made at the rate of 24.69p per share.
5 Operating segments
The Group considers that it has no product or distribution-based business
segments. It reports segmental information on the same basis as reported
internally to the chief operating decision maker, which is the board of
directors of Chesnara plc.
The segments of the group as at 31 December 2025 comprise:
UK: This segment comprises the UK's life insurance and pensions business,
Countrywide Assured plc (CA), the group's principal UK operating subsidiary.
The segment has grown through acquisitions and includes the unit-linked bond
and pension business of Canada Life Limited which was acquired in 2024. The
Part VII transfer of the onshore individual protection business completed in
February 2025. The majority of the assets and liabilities of CASLP were
transferred to CA in 2023 under a Part VII business transfer. CASLP was
dissolved on 14 January 2025.
Sweden: This segment comprises the group's Swedish life and pensions
business, Movestic Livförsäkring AB (Movestic) and its subsidiary company
Movestic Fonder AB (investment fund management company). Movestic is open to
new business and primarily comprises unit-linked pension business and also
provides some life and health product offerings.
Netherlands: This is comprised of the formerly separate businesses, Waard and
Scildon, which merged in July 2025 and now trade under the brand name Scildon.
This combined segment comprises the Group's Dutch life insurance business,
with a portfolio of long-term savings, protection business and some non-life
business. It is open to new business and sells protection, individual savings
and group pension contracts via a broker-led distribution model.
As the operating segments have been revised following the integration of our
Dutch businesses, the prior year comparatives have been restated to maintain
comparability.
Other Group activities: The functions performed by the Parent Company,
Chesnara plc, are defined under the operating segment analysis as 'Other Group
activities'. Also included therein are consolidation and elimination
adjustments.
The accounting policies of the segments are the same as those for the group as
a whole. Any transactions between the business segments are on normal
commercial terms in normal market conditions. The Group evaluates the
performance of operating segments on the basis of the profit before tax
attributable to shareholders of the reporting segments and the group as a
whole. There were no changes to the measurement basis for segment profit
during the year ended 31 December 2025.
(i) Segmental income statement for the year ended 31 December 2025
Other Group activities
Sweden Netherlands
UK Total
£m £m £m £m £m
Insurance revenue 78.8 10.7 137.5 - 227.0
Insurance service expense (81.2) (4.8) (122.1) - (208.1)
Net expenses from reinsurance contracts held 5.3 (1.3) (1.0) - 3.0
Segmental insurance service result 2.9 4.6 14.4 - 21.9
Net investment return 421.0 129.1 105.8 (6.7) 649.2
Net finance (expenses)/income from insurance contracts issued (119.3) (6.2) (80.1) - (205.6)
Net finance expenses from reinsurance contracts held 12.5 0.1 1.6 - 14.2
Net change in investment contract liabilities (284.9) (59.4) (0.9) - (345.2)
Change in liabilities relating to policyholders' funds held by the group - (62.4) - - (62.4)
Segmental investment result 29.3 1.2 26.4 (6.7) 50.2
Fee, commission and other operating income 40.4 73.7 0.1 0.0 114.2
Segmental revenue, net of investment result 72.6 79.5 40.9 (6.7) 186.3
Other operating expenses (35.9) (64.7) (7.9) (33.9) (142.4)
Financing costs (0.1) (0.3) - (11.0) (11.4)
Profit/(loss) before tax and consolidation adjustments 36.6 14.5 33.0 (51.6) 32.5
Other operating expenses:
Amortisation and impairment of intangible assets (3.5) (10.2) - - (13.7)
Segmental income less expenses 33.1 4.3 33.0 (51.6) 18.8
(Loss)/profit before tax 33.1 4.3 33.0 (51.6) 18.8
Income tax credit / (charge) (24.0) (0.2) (5.7) 0.7 (29.2)
(Loss)/profit after tax 9.1 4.1 27.3 (50.9) (10.4)
(ii) Segmental statement of financial position as at 31 December 2025
UK Sweden Netherlands Other Group Activities Total
£m £m £m £m £m
Total assets 4,673.4 6,791.4 2,737.0 374.2 14,576.0
Total liabilities (4,582.5) (6,687.8) (2,526.6) (215.8) (14,012.7)
Net assets 90.9 103.6 210.4 158.4 563.3
(iii) Segmental income statement for the year ended 31 December 2024
Other Group activities
UK Sweden Netherlands
(restated) Total
£m £m £m £m £m
Insurance revenue 71.3 10.2 180.4 - 261.9
Insurance service expense (64.9) (2.6) (176.6) - (244.1)
Net expenses from reinsurance contracts held (0.9) (1.8) (6.5) - (9.2)
Segmental insurance service result 5.5 5.8 (2.7) - 8.6
Net investment return 380.7 666.6 229.5 9.3 1,286.1
Net finance (expenses)/income from insurance contracts issued (98.4) (23.6) (212.8) - (334.8)
Net finance expenses from reinsurance contracts held 3.1 0.3 (0.8) - 2.6
Net change in investment contract liabilities (260.0) (479.6) (0.8) - (740.4)
Change in liabilities relating to policyholders' funds held by the group - (160.8) - - (160.8)
Segmental investment result 25.4 2.9 15.1 9.3 52.7
Fee, commission and other operating income 37.4 65.5 0.3 1.0 104.2
Segmental revenue, net of investment result 68.3 74.2 12.7 10.3 165.5
Other operating expenses (39.7) (54.9) (7.6) (22.0) (124.2)
Financing costs (0.2) (0.4) - (10.5) (11.1)
Profit/(loss) before tax and consolidation adjustments 28.4 18.9 5.1 (22.2) 30.2
Other operating expenses:
Amortisation and impairment of intangible assets (0.1) (9.3) - - (9.4)
Segmental income less expenses 28.3 9.6 5.1 (22.2) 20.8
(Loss)/profit before tax 28.3 9.6 5.1 (22.2) 20.8
Income tax credit / (charge) (17.0) (0.5) (1.2) 1.8 (16.9)
(Loss)/profit after tax 11.3 9.1 3.9 (20.4) 3.9
(iv) Segmental statement of financial position for the year ended 31
December 2024
Other Group Activities
Netherlands
UK Sweden (restated) Total
£m £m £m £m £m
Total assets 4,473.8 5,269.7 2,887.6 124.0 12,755.1
Total liabilities (4,347.2) (5,177.8) (2,709.9) (205.8) (12,440.7)
Net assets 126.6 91.9 177.7 (81.8) 314.4
6 Borrowings
31 December
2025 2024
£m
£m
Tier 2 Debt 201.1 200.8
Amount due in relation to financial reinsurance 1.0 2.4
Term finance 0.9 1.6
Total 203.0 204.8
Current 0.8 1.4
Non-current 202.2 203.4
Total 203.0 204.8
The fair value of amounts due in relation to Tier 2 debt at 31 December 2025
was £185.5m (31 December 2024: £166.1m).
The fair value of amounts due in relation to financial reinsurance at 31
December 2025 was £1.0m (31 December 2024: £2.3m).
Term finance comprises capital amounts outstanding on mortgage bonds taken out
over properties held in the Unit-linked policyholder funds in the UK. The
mortgage over each such property is negotiated separately, varies in term from
5 to 20 years, and bears interest at fixed or floating rates that are agreed
at the time of inception of the mortgage. The fair value of the term finance
is not materially different to the carrying value shown above.
7 Financial investments
(a) Financial investments by classification
The carrying amounts of the financial investments and other financial assets
and liabilities held by the Group at the balance sheet date are as follows:
31 December 2025 Total
Amortised Cost FVTPL - Designated FVTPL - Mandatory
£m £m £m £m
Financial investments:
Equity securities - - 208.2 208.2
Holdings in collective investment schemes - - 9,388.4 9,388.4
Debt securities - government bonds - 420.3 - 420.3
Debt securities - other - 635.1 - 635.1
Policyholder funds held by the group - 2,939.3 - 2,939.3
Mortgage loan portfolio - 356.9 - 356.9
Total - 4,351.6 9,596.6 13,948.2
Derivatives and other financial assets:
Amounts deposited with reinsurers - 35.0 - 35.0
Derivative financial instruments - - 0.9 0.9
Other assets 58.8 - - 58.8
Cash and cash equivalents - 145.3 - 145.3
Total financial investments and financial assets 58.8 180.3 0.9 240.0
Financial liabilities
Investment contracts at fair value through profit or loss - 6,717.0 - 6,717.0
Liabilities relating to policyholder funds held by the group - 2,938.5 - 2,938.5
Derivative financial instruments - - 0.1 0.1
Borrowings 203.0 - - 203.0
Other current liabilities 129.5 - - 129.5
Total financial liabilities 332.5 9,655.5 0.1 9,988.1
31 December 2024 Total
Amortised Cost FVTPL - Designated FVTPL - Mandatory
£m £m £m £m
Financial investments:
Equity securities - - 191.5 191.5
Holdings in collective investment schemes - - 8,661.6 8,661.6
Debt securities - government bonds - 446.1 - 446.1
Debt securities - other - 634.7 10.1 644.8
Policyholder funds held by the group - 1,825.8 - 1,825.8
Mortgage loan portfolio - 346.9 - 346.9
Total - 3,253.5 8,863.2 12,116.7
Derivatives and other financial assets:
Amounts deposited with reinsurers - 34.3 - 34.3
Derivative financial instruments - - 0.1 0.1
Other assets 68.7 - - 68.7
Cash and cash equivalents - 138.0 - 138.0
Total financial investments and financial assets 68.7 3,425.8 8,863.3 12,357.8
Financial liabilities
Investment contracts at fair value through profit or loss - 6,116.7 - 6,116.7
Liabilities relating to policyholder funds held by the group - 1,825.5 - 1,825.5
Derivative financial instruments - - 0.6 0.6
Borrowings 204.8 - - 204.8
Other current liabilities 129.7 - - 129.7
Total financial liabilities 334.5 7,942.2 0.6 8,277.3
(b) Financial investment fair values
Fair value is the amount for which an asset or liability could be exchanged
between willing parties in an arm's length transaction. The following tables
show the determination of fair value according to a three-level valuation
hierarchy. Fair values are generally determined at prices quoted in active
markets (Level 1). However, where such information is not available, the Group
applies valuation techniques to measure such instruments. These valuation
techniques make use of market-observable data for all significant inputs where
possible (Level 2), but in some cases it may be necessary to estimate using
data other than market-observable data within a valuation model for
significant inputs (Level 3).
Fair value measurement at 31 December 2025
Level 1 Level 2 Level 3 Total
£m £m £m £m
Investment properties - - 91.0 91.0
Financial assets
Equities - Listed 208.0 0.1 0.1 208.2
Holdings in collective investment schemes 9,176.7 35.6 176.1 9,388.4
Debt securities - government bonds 420.3 - - 420.3
Debt securities - other debt securities 635.1 - - 635.1
Policyholders' funds held by the group 2,864.8 - 74.5 2,939.3
Mortgage loan portfolio - 356.9 - 356.9
Amounts deposited with reinsurers - 35.0 - 35.0
Derivative financial instruments - 0.9 - 0.9
Total 13,304.9 428.5 341.7 14,075.1
Financial liabilities
Investment contracts at fair value through profit or loss - 6,717.0 - 6,717.0
Liabilities related to policyholders' funds held by the group - 2,938.5 - 2,938.5
Derivative financial instruments - 0.1 - 0.1
Total - 9,655.6 - 9,655.6
Fair value measurement at 31 December 2024
Level 1 Level 2 Level 3 Total
£m £m £m £m
Investment properties - - 91.7 91.7
Financial assets
Equities - Listed 191.5 - - 191.5
Holdings in collective investment schemes 8,454.1 38.9 168.6 8,661.6
Debt securities - government bonds 446.1 - - 446.1
Debt securities - other debt securities 644.8 - - 644.8
Policyholders' funds held by the group 1,781.6 - 44.2 1,825.8
Mortgage loan portfolio - 346.9 - 346.9
Amounts deposited with reinsurers - 34.3 - 34.3
Derivative financial instruments - 0.1 - 0.1
Total 11,518.1 420.2 304.5 12,242.8
Financial liabilities
Investment contracts at fair value through profit or loss - 6,116.7 - 6,116.7
Liabilities related to policyholders' funds held by the group - 1,825.5 - 1,825.5
Derivative financial instruments - 0.6 - 0.6
Total - 7,942.8 - 7,942.8
Investment properties
The investment properties are valued by external Chartered Surveyors using
industry standard techniques based on guidance from the Royal Institute of
Chartered Surveyors. The valuation methodology includes an assessment of
general market conditions and sector level transactions and takes account of
expectations of occupancy rates, rental income and growth. Properties undergo
individual scrutiny using cash flow analysis to factor in the timing of rental
reviews, capital expenditure, lease incentives, dilapidation and operating
expenses; these reviews utilise both observable and unobservable inputs.
Holdings in collective investment schemes
The holdings classified as Level 3 £176.1m (Dec 2024: £168.6m) relate to
Scildon, and represent investments held in a mortgage fund. These are
classified as Level 3 as the fair value is derived from valuation techniques
that include inputs that are not based on observable market data.
Policyholder funds held by the group
There is also a small holding of assets classified as Level 3 £74.5m (Dec
2024: £44.2m) from our Movestic operation which are unlisted. The valuation
of the vast majority of these assets is based on unobservable prices from
trading on the over-the-counter market.
Debt securities
The debt securities classified as Level 2 at 2024 and 2025 are traded in
active markets with less depth or wider bid-ask spreads. This does not meet
the classification as Level 1 inputs. The fair value of debt securities not
traded in active markets are determined using broker quotes or valuation
techniques with observable market inputs. Financial instruments valued using
broker quotes are classified at Level 2, only where there is a sufficient
range of available quotes.
These assets are valued using counterparty or broker quotes and are
periodically validated against third-party models.
Derivative financial instruments
The derivatives financial instruments include a foreign currency hedge related
to the group. The hedge was renewed in December 2025, from which point a
hedging relationship was designated. The foreign currency hedge is being used
as a net investment hedge to manage the impact of foreign exchange movements
between sterling and both the euro and Swedish krona.
It includes collars which consists of two hedges:
- one hedge to protect against the downside (sterling
strengthening) (starting at strike A), and one to remove the upside
(weakening) (strike B); with the strikes of these coordinated to result in no
upfront premium.
- the second hedge (strike B) creates a liquidity requirement when
it bites.
The capped collar comes with an additional leg which creates value and
liquidity when exchange rates move beyond a certain point (strike C).
There is an economic relationship between the hedged item and the hedging
instrument as the net investment creates a translation risk that will match
the foreign exchange risk on the collar. The Group has established a hedge
ratio of 1:1 as the underlying risk of the hedging instrument is identical to
the hedged risk component. The hedge ineffectiveness will arise if the amount
of the investment in the foreign subsidiary was to become lower than the
nominal amount of the collar.
The net investment hedges were assessed to be highly effective at 31 December
2025 and a net unrealised loss of £0.1m has been recorded in the translation
reserve.
The group's currency risk management strategy is outlined in the risk
management section of the financial statements, under the 'Investment and
Liquidity Risk' section. Applications of the strategy and tools used to manage
the currency translation risk are covered in the financial risk disclosure
note in the Annual Report and Accounts. The hedge creates an uncertainty
around future cash flows through collateral posted for the derivative, which
fluctuates in line with fluctuations in the derivative liability and creates
an uncertain, uncapped liquidity requirement when it bites.
Within derivative financial instruments is a financial reinsurance embedded
derivative related to our Movestic operation. The group has entered into a
reinsurance contract with a third party that has a section that is deemed to
transfer significant insurance risk and a section that is deemed not to
transfer significant insurance risk. The element of the contract that does not
transfer significant insurance risk has two components and has been accounted
for as a financial liability at amortised cost and an embedded derivative
asset at fair value. The embedded derivative represents an option to repay the
amounts due under the contract early at a discount to the amortised cost, with
its fair value being determined by reference to market interest rate at the
year-end date. It is, accordingly, determined at Level 2 in the three-level
fair value determination hierarchy.
Investment contract liabilities
The investment contract liabilities in Level 2 of the valuation hierarchy
represent the fair value of linked and non-linked liabilities valued using
established actuarial techniques utilising market observable data for all
significant inputs, such as investment yields.
Significant unobservable inputs in level 3 instruments valuations
The Level 3 instruments held in the Group are in relation to investments held
in an Aegon managed Dutch Mortgage Fund that contains mortgage-backed assets
in the Netherlands. The fair value of the mortgage fund is determined by the
fund manager on a monthly basis using an in-house valuation model. The
valuation model relies on a number of unobservable inputs, the most
significant being the assumed conditional prepayment rate, the discount rate
and the impairment rate, all of which are applied to the anticipated modelled
cash flows to derive the fair value of the underlying asset.
The assumed conditional prepayment rate (CPR) is used to calculate the
projected prepayment cash flow per individual loan and reflects the
anticipated early repayment of mortgage balances. The CPR is based on 4
variables:
- Contract age - The CPR for newly originated mortgage loans will
initially be low, after which it increases for a couple of years to its
maximum expected value, and subsequently diminishes over time.
- Interest rate differential - The difference between the
contractual rates and current interest rates are positively correlated with
prepayments. When contractual rates are higher than interest rates of newly
originated mortgages, we observe more prepayments and the vice versa.
- Previous partial repayments - Borrowers who made a partial
prepayment in the past, are more likely to do so in the future.
- Burnout effect - Borrowers who have not made a prepayment in the
past, while their option to prepay was in the money, are less likely to prepay
in the future.
The projected prepayment cash flows per loan are then combined to derive an
average expected lifetime CPR, which is then applied to the outstanding
balance of the fund. The conditional prepayment rate used in the valuation of
the fund as at 31 December 2025 was 3.9% (31 December 2024: 3.7%).
The expected projected cash flows for each mortgage within the loan portfolio
are discounted using rates that are derived using a matrix involving the
following three parameters:
- The remaining fixed rate term of the mortgage
- Indexed loan to value (LTV) of each mortgage
- Current (Aegon) mortgage rates
At 31 December 2025 this resulted in discounting the cash flows in each
mortgage using a range from 3.81% to 4.70% (31 December 2024: 4.06% to 4.26%).
An impairment percentage is applied to those loan cashflows which are in
arrears, to reflect the chance of the loan actually going into default. For
those loans which are one, two or three months in arrears, an impairment
percentage is applied to reflect the chance of default. This percentage ranges
from 0.60% for 1 month in arrears to 13.70% for loans which are 3 months in
arrears (31 December 2024: 0.60% for one month in arrears to 13.70% for loans
which are 3 months in arrears). Loans which are in default receive a 100%
reduction in value.
The value of the fund has the potential to decrease or increase over time.
This can be as a consequence of a periodic reassessment of the conditional
prepayment rate and/or the discount rate used in the valuation model.
A 1 per cent increase in the discount rate would reduce the value of the asset
by £15.1m (31 December 2024: £15.3m).
A 1 per cent decrease in the discount rate would increase the value of the
asset by £17.3m (31 December 2024: £17.5m).
Reconciliation of Level 3 fair value measurements of financial instruments
31 December 2025
Investment properties Holdings in collective investment schemes Policyholder funds held by group Total
£m £m £m £m
At start of period 91.7 168.6 44.3 304.6
Total gains and losses recognised in the income statement 5.6 (2.0) (12.6) (9.0)
Purchases 2.7 - 42.6 45.3
Settlements (9.0) - (6.1) (15.1)
Exchange rate adjustment - 9.5 6.3 15.8
At the end of period 91.0 176.1 74.5 341.6
31 December 2024
Investment properties Holdings in collective investment schemes Policyholder funds held by group Total
£m £m £m £m
At start of period 88.1 142.5 42.4 273.0
Total gains and losses recognised in the income statement 8.1 33.5 1.9 43.5
Purchases 3.4 - 17.0 20.4
Settlements (7.9) - (13.9) (21.8)
Exchange rate adjustment - (7.4) (3.2) (10.6)
At the end of period 91.7 168.6 44.2 304.5
31 December Carrying amount Fair value
2025 2024 2025 2024
£m £m £m £m
Financial liabilities:
Borrowings 200.1 200.8 185.8 166.1
Amounts due in relation to financial reinsurance 1.0 2.4 1.0 2.3
Term finance 0.9 1.6 0.9 1.6
Total 202.0 204.8 187.7 170.0
The fair value of the Tier 2 debt is calculated using quoted prices in active
markets and they are classified as Level 1 in the fair value hierarchy. The
amount due in relation to financial reinsurance is fair valued with reference
to market interest rates at the year-end date and is classed as level 2 in the
fair value hierarchy.
There were no transfers between Levels 1, 2 and 3 during the year. The group
holds no Level 3 liabilities as at the year-end date.
8 Insurance and Reinsurance contracts
The following notes provide a quantitative analysis of the insurance and
reinsurance contract assets and liabilities and are disaggregated by the IFRS
8 operating segments. This disaggregation has been chosen for the following
notes because it is management's view that together with the information in
the Underwriting Risk section, it provides the most relevant information for
assessing the effect that contracts within the scope of IFRS 17 have on the
entity's financial performance and position.
(i) Composition of the Statement of Financial Position
The following tables show the breakdown of the insurance and reinsurance
contract assets and liabilities for each of the operating segments within
Chesnara.
As the operating segments have been revised following the integration of our
Dutch businesses, the prior year comparatives have been restated to maintain
comparability.
31 December 2025
UK Sweden Netherlands Total
Insurance contracts £m £m £m £m
Insurance contract liabilities 1,306.4 193.0 2,441.3 3,940.7
Insurance contract assets - - - -
Net insurance contract liabilities 1,306.4 193.0 2,441.3 3,940.7
Reinsurance contracts
Reinsurance contract assets 155.0 11.6 1.4 168.0
Reinsurance contract liabilities (2.0) - (8.5) (10.5)
Net reinsurance contract assets 153.0 11.6 (7.1) 157.5
Current Non-current Total
£m £m £m
Insurance contract liabilities 523.4 3,417.3 3,940.7
Insurance contract assets - - -
Reinsurance contract assets 30.2 137.8 168.0
Reinsurance contract liabilities (3.2) 13.7 10.5
31 December 2024
UK Sweden Netherlands Total
Insurance contracts £m £m £m £m
Insurance contract liabilities 1,308.5 174.1 2,616.5 4,099.1
Insurance contract assets (1.8) - - (1.8)
Net insurance contract liabilities 1,306.7 174.1 2,616.5 4,097.3
Reinsurance contracts
Reinsurance contract assets 154.8 12.4 2.7 169.9
Reinsurance contract liabilities (2.0) - (14.6) (16.6)
Net reinsurance contract assets 152.8 12.4 (11.9) 153.3
Current Non-current Total
£m £m £m
Insurance contract liabilities 730.5 3,368.6 4,099.1
Insurance contract assets (1.8) - (1.8)
Reinsurance contract assets 29.9 140.0 169.9
Reinsurance contract liabilities 0.5 (17.1) (16.6)
(ii) Fair value of underlying items
The following table shows the fair value of the underlying items of the
group's direct participating contracts for each reporting segment.
UK Sweden Netherlands Total
£m £m £m £m
Fair value of underlying items as at 31 December 2025 848.1 161.7 1,198.9 2,208.7
Fair value of underlying items as at 31 December 2024 (restated) 711.0 142.4 1,377.7 2,231.1
Composition of underlying items: The majority of the fair value of underlying
items across the group are held in collective investment schemes. A small
proportion is held in equities, debt securities and in cash and deposits.
(iii) Insurance contract balances - analysis by remaining coverage and
incurred claims
Liabilities for Remaining Coverage Liabilities for Incurred Claims
Excluding Loss Component Loss component For contracts not under PAA Total
PV of future cash flows Risk adjustment
£m £m £m £m
£m £m
Insurance contract liabilities as at 1 January 2025 3,866.4 102.2 98.5 28.5 1.7 4,097.3
Changes in the statement of profit and loss
Insurance revenue
Contracts measured under the fair value approach (62.2) - - - - (62.2)
Contracts measured under the fully retrospective approach (164.8) - - - - (164.8)
Insurance revenue total (227.0) - - - - (227.0)
Insurance service expenses - (81.0) 234.3 8.8 0.1 162.2
Incurred claims and other directly attributable expenses
Adjustments to liabilities for incurred claims - - - (4.5) (0.2) (4.7)
Losses and reversals of losses on onerous contracts - 47.3 - - - 47.3
Amortisation of insurance acquisition cash flows 3.3 - - - - 3.3
Insurance service expense total 3.3 (33.7) 234.3 4.3 (0.1) 208.1
Insurance service result (223.7) (33.7) 234.3 4.3 (0.1) (18.9)
Net finance expenses from insurance contracts 204.5 0.7 - 0.4 - 205.6
Effect of movements in exchange rates 151.5 4.2 2.6 3.2 0.1 161.6
Total amounts recognised in comprehensive income 132.3 (28.8) 236.9 7.9 - 348.3
Investment components (587.6) - 297.2 - - (290.4)
Cash flows
Premiums received 312.1 - 0.9 - - 313.0
Claims and other directly attributable expenses paid - - (513.1) (8.7) - (521.8)
Insurance acquisition cash flows (5.7) - - - - (5.7)
Total cash flows 306.4 - (512.2) (8.7) - (214.5)
Insurance contract liabilities as at 31 December 2025 3,717.5 73.4 120.4 27.7 1.7 3,940.7
Liabilities for Remaining Coverage Liabilities for Incurred Claims
Excluding Loss Component Loss component For contracts not under PAA Total
PV of future cash flows Risk adjustment
£m £m £m £m
£m £m
Insurance contract liabilities as at 1 January 2024 3,958.1 89.4 113.3 37.1 1.2 4,199.1
Changes in the statement of profit and loss
Insurance revenue
Contracts measured under the fair value approach (59.0) - - - - (59.0)
Contracts measured under the fully retrospective approach (202.9) - - - - (202.9)
Insurance revenue total (261.9) - - - - (261.9)
Insurance service expenses - (24.0) 222.4 8.2 0.1 206.7
Incurred claims and other directly attributable expenses
Adjustments to liabilities for incurred claims - - - (6.0) (0.3) (6.3)
Losses and reversals of losses on onerous contracts - 40.0 - - - 40.0
Amortisation of insurance acquisition cash flows 3.7 - - - - 3.7
Insurance service expense total 3.7 16.0 222.4 2.2 (0.2) 244.1
Insurance service result (258.2) 16.0 222.4 2.2 (0.2) (17.8)
Net finance expenses from insurance contracts 333.3 0.7 - - 0.8 334.8
Effect of movements in exchange rates (128.8) (3.9) (2.2) (2.5) (0.1) (137.5)
Total amounts recognised in comprehensive income (53.7) 12.8 220.2 (0.3) 0.5 179.5
Investment components (332.8) - 332.8 - - -
Cash flows
Premiums received 291.9 - - - - 291.9
Claims and other directly attributable expenses paid - - (555.9) (8.3) - (564.2)
Insurance acquisition cash flows (6.8) - - - - (6.8)
Acquisitions 9.7 - (11.9) - - (2.2)
Total cash flows 294.8 - (567.8) (8.3) - (281.3)
Insurance contract liabilities as at 31 December 2024 3,866.4 102.2 98.5 28.5 1.7 4,097.3
(iv) Insurance contract balances - analysis by measurement component
Risk Adjustment CSM (new contracts and contracts measured under FRA) CSM (contracts measured under FVA) Total
Present value of future cash flows
£m £m £m £m £m
Insurance contract liabilities as at 1 January 2025 3,826.5 30.1 167.9 40.8 4,065.3
Changes that relate to current service
CSM recognised for services provided - - (19.5) (3.5) (23.0)
Change in risk adjustment for non-financial risk for risk expired - (5.1) - - (5.1)
Experience adjustments (31.4) (0.9) - - (32.3)
Total changes that relate to current service (31.4) (6.0) (19.5) (3.5) (60.4)
Changes that relate to future service
Contracts initially recognised in the period (17.7) 5.1 18.0 - 5.4
Changes in estimates that adjust the CSM 17.9 (0.9) (21.5) 4.5 -
Changes in estimates that result in losses or reversals of losses on onerous 41.9 (0.1) - - 41.8
underlying contracts
Total changes that relate to future service 42.1 4.1 (3.5) 4.5 47.2
Insurance service result 10.7 (1.9) (23.0) 1.0 (13.2)
Net finance expenses from insurance contracts 200.7 (0.2) 3.9 0.9 205.3
Effect of movements in exchange rates 146.9 1.3 9 0.9 158.1
Total amounts recognised in comprehensive income 358.3 (0.8) (10.1) 2.8 350.2
Disposals (290.4) - - - (290.4)
Cash flows
Premiums received 302.1 - - - 302.1
Claims and other directly attributable expenses paid (513.1) 0.9 - - (512.2)
Insurance acquisition cash flows (5.7) - - - (5.7)
Total cash flows (216.7) 0.9 - - (215.8)
Insurance contract liabilities as at 31 December 2025 3,677.7 30.2 157.8 43.6 3,909.3
Risk Adjustment CSM (new contracts and contracts measured under FRA) CSM (contracts measured under FVA) Total
Present value of future cash flows
£m £m £m £m £m
Insurance contract liabilities as at 1 January 2024 3,918.6 51.7 161.0 27.5 4,158.8
Changes that relate to current service
CSM recognised for services provided - - (18.1) (4.3) (22.4)
Change in risk adjustment for non-financial risk for risk expired - (4.9) - - (4.9)
Experience adjustments (23.0) - - - (23.0)
Total changes that relate to current service (23.0) (4.9) (18.1) (4.3) (50.3)
Changes that relate to future service
Contracts initially recognised in the period (8.5) 1.7 9.5 - 2.7
Changes in estimates that adjust the CSM (17.6) (18.7) 19.2 17.2 0.1
Changes in estimates that result in losses or reversals of losses on onerous 38.1 (1.0) - - 37.1
underlying contracts
Total changes that relate to future service 12.0 (18.0) 28.7 17.2 39.9
Insurance service result (11.0) (22.9) 10.6 12.9 (10.4)
Net finance expenses from insurance contracts 326.4 2.8 4.0 0.8 334.0
Effect of movements in exchange rates (125.2) (1.5) (7.7) (0.4) (134.8)
Total amounts recognised in comprehensive income 190.2 (21.6) 6.9 13.3 188.8
Cash flows
Disposals 282.6 - - - 282.6
Premiums received (555.9) - - - (555.9)
Claims and other directly attributable expenses paid (6.8) - - - (6.8)
Insurance acquisition cash flows (2.2) - - - (2.2)
Total cash flows (282.3) - - - (282.3)
Insurance contract liabilities as at 31 December 2024 3,826.5 30.1 167.9 40.8 4,065.3
(v) Reinsurance contract balances - analysis by remaining coverage and
incurred claims
Assets for Remaining Coverage Assets for Incurred Claims
Loss-Recovery component For contracts not under PAA Total
Excluding Loss-Recovery Component
Future cash flows Risk adjustment
£m £m £m £m £m £m
Reinsurance contract assets as at 1 January 2025 120.6 5.1 15.9 11.6 0.1 153.3
Reinsurance expenses - allocation of reinsurance premiums paid (58.1) - - - - (58.1)
Amounts recoverable from reinsurers
Recoveries of incurred claims and other directly attributable expenses - - 58.4 2.2 - 60.6
Changes in the expected recoveries for past claims - - - (1.5) - (1.5)
Changes in the loss-recovery component - 2.0 - - - 2.0
Net expenses / (income) from reinsurance contracts held (58.1) 2.0 58.4 0.7 - 3.0
Net finance expenses from reinsurance contracts 14.1 - - 0.1 - 14.2
Effect of movements in exchange rates (1.0) 0.3 0.2 1.3 - 0.8
Total amounts recognised in comprehensive income (45.0) 2.3 58.6 2.1 - 18.0
Investment components (4.0) - 4.0 - - -
Cash flows
Premiums paid 40.2 - - - - 40.2
Recoveries from reinsurance contracts held - - (51.6) (2.4) - (54.0)
Acquisitions - - - - - -
Total cash flows 40.2 - (51.6) (2.4) - (13.8)
Reinsurance contract assets as at 31 December 2025 111.8 7.4 26.9 11.3 0.1 157.5
Assets for Remaining Coverage Assets for Incurred Claims
Loss-Recovery component For contracts not under PAA Total
Excluding Loss-Recovery Component
Future cash flows Risk adjustment
£m £m £m £m £m £m
Reinsurance contract assets as at 1 January 2024 124.0 6.2 23.3 14.9 0.2 168.6
Reinsurance expenses - allocation of reinsurance premiums paid (52.3) - - - - (52.3)
Amounts recoverable from reinsurers: - - 44.4 1.9 - 46.3
Recoveries of incurred claims and other insurance service expenses
Changes in the expected recoveries for past claims - - - (2.3) (0.1) (2.4)
Changes in the loss recovery component - (0.8) - - - (0.8)
Effect of changes in non-performance risk of reinsurers - - - - - -
Net (expenses) / income from reinsurance contracts held (52.3) (0.8) 44.4 (0.4) (0.1) (9.2)
Net Finance expenses from reinsurance contracts 2.3 - - 0.3 - 2.6
Effect of movements in exchange rates 1.1 (0.3) (0.3) (1.0) - (0.5)
Total amounts recognised in comprehensive income (48.9) (1.1) 44.1 (1.1) (0.1) (7.1)
Investment components (2.8) - 2.8 - - -
Cash flows
Premiums paid net of ceding commission 48.3 - - - - 48.3
Recoveries from reinsurance contracts held - - (54.3) (2.2) - (56.5)
Acquisitions - - - - - -
Total cash flows 48.3 - (54.3) (2.2) - (8.2)
Reinsurance contract assets as at 31 December 2024 120.6 5.1 15.9 11.6 0.1 153.3
(vi) Reinsurance contract balances - analysis by remaining coverage and
incurred claims
Risk Adjustment CSM (new contracts and contracts measured under FRA) CSM (contracts measured under FVA) Total
Present value of future cash flows
£m £m £m £m £m
Reinsurance contract assets as at 1 January 2025 97.6 10.2 28.6 4.5 140.9
Changes that relate to current service
CSM recognised for services received - - (2.6) (0.1) (2.7)
Change in risk adjustment for non-financial risk for risk expired - (1.8) - - (1.8)
Experience adjustments 7.0 - - - 7.0
Total changes that relate to current service 7.0 (1.8) (2.6) (0.1) 2.5
Changes that relate to future service
Contracts initially recognised in the period (5.1) 2.5 2.7 - 0.1
Changes in estimates that adjust the CSM 6.0 (0.8) (9.1) (1.4) (5.3)
CSM adjustment for income on initial recognition of onerous underlying - - 1.3 - 1.3
contracts
Changes in recoveries of losses on onerous underlying contracts that adjust 0.1 - 4.5 1.2 5.8
the CSM
Total changes that relate to future service 1.0 1.7 (0.6) (0.2) 1.9
Net (expense) / income from reinsurance contracts held 8.0 (0.1) (3.2) (0.3) 4.4
Net finance income from reinsurance contracts held 13.3 0.3 0.5 - 14.1
Effect of movements in exchange rates (2.6) 0.4 1.6 - (0.6)
Total amounts recognised in comprehensive income 18.7 0.6 (1.1) (0.3) 17.9
Cash flows
Premiums paid 38.7 - - - 38.7
Recoveries from reinsurance contracts held (51.6) - - - (51.6)
Acquisitions - - - - -
Total cash flows (12.9) - - - (12.9)
Reinsurance contract assets as at 31 December 2025 103.4 10.8 27.5 4.2 145.9
Risk Adjustment CSM (new contracts and contracts measured under FRA) CSM (contracts measured under FVA) Total
Present value of future cash flows
£m £m £m £m £m
Reinsurance contract assets as at 1 January 2024 106.9 15.2 26.4 5.6 154.1
Changes that relate to current service
CSM recognised for services received - - (3.1) (0.3) (3.4)
Change in risk adjustment for non-financial risk for risk expired - (1.6) - - (1.6)
Experience adjustments (1.4) - - - (1.4)
Total changes that relate to current service (1.4) (1.6) (3.1) (0.3) (6.4)
Changes that relate to future service (2.4) 0.6 1.9 - 0.1
Contracts initially recognised in the period
Changes in estimates that adjust the CSM (0.3) (4.1) 3.7 (0.9) (1.6)
CSM adjustment for income on initial recognition of onerous underlying - - - - -
contracts
Changes in recoveries of losses on onerous underlying contracts that adjust - - 0.5 - 0.5
the CSM
Total changes that relate to future service (2.7) (3.5) 6.1 (0.9) (1.0)
Net (expense) / income from reinsurance contracts held (4.1) (5.1) 3.9 (1.2) (7.4)
Net finance income from reinsurance contracts held 1.2 0.6 0.4 0.1 2.3
Effect of movements in exchange rates 2.2 (0.5) (1.2) - 0.5
Total amounts recognised in comprehensive income (0.7) (5.0) 2.2 (1.1) (4.6)
Cash flows
Premiums paid net of ceding commission 45.6 - - - 45.6
Recoveries from reinsurance contracts held (54.2) - - - (54.2)
Acquisitions - - - - -
Total cash flows (8.6) - - - (8.6)
Reinsurance contract assets as at 31 December 2024 97.6 10.2 28.6 4.5 140.9
9 Events After the Reporting Period
On 3rd July 2025, the Group announced that it has entered into an agreement to
acquire HSBC Life (UK) Ltd (subsequently renamed Chesnara Life), a specialist
life protection and investment bond provider in the UK for a total
consideration of £260.0m, from HSBC Bank plc.
The acquisition was funded through a combination of existing internal cash
resources (£55.0m), a drawdown from the Group's revolving credit facility and
equity raised via a fully underwritten rights issue.
The transaction completed on 30th January 2026 and HSBC Life (UK) Ltd
(subsequently renamed Chesnara Life) became a subsidiary of Chesnara plc. The
net assets of the acquired entity are expected to be between £285m and £295m
and the subsidiary will be included in the 'UK' operating segment.
On 17th February 2026, the Group announced that it has entered into an
agreement to acquire 100% of the issued share capital of Scottish Widows
Europe SA, a Luxembourg-based closed life insurance business, from Scottish
Widows Limited (a subsidiary of Lloyds Banking Group plc) for total cash
consideration of €110 million, subject to adjustment in accordance with the
provisions of the Sale and Purchase Agreement. The impact of this transaction
on the net assets of the Group cannot yet be quantified.
10 Approval of consolidated report for the year ended 31 December 2025
This consolidated report was approved by the Board of Directors on 23 March
2026. A copy of the report will be available to the public at the Company's
registered office, 2nd Floor, 33-34 Winckley Square, Preston, Lancashire, PR1
3JJ and at www.chesnara.co.uk (http://www.chesnara.co.uk)
FINANCIAL CALENDAR
24 March 2026
Results for the year ended 31 December 2025 announced
2 April 2026
Ex-dividend date
7 April 2026
Dividend record date
21 April 2026
Last date for dividend reinvestment plan elections
12 May 2026
Annual General Meeting
20 May 2026
Dividend payment date
KEY CONTACTS
Registered and head office
2nd Floor,
33-34 Winckley Square
Preston
Lancashire
PR1 3JJ
T: 01772 972050
www.chesnara.co.uk
Advisors
Burness Paull LLP
Exchange Plaza
50 Lothian Road
Edinburgh
EH3 9WJ
Auditor
Deloitte LLP
Statutory Auditor
1 City Square
Leeds
LS1 2AL
Registrars
MUFG Corporate Markets
Central Square
29 Wellington Street
Leeds
LS1 4DL
Joint Stockbrokers and
Corporate Advisors
Panmure Liberum
25 Ropemaker Street
London
EC2Y 9LY
RBC Capital Markets
100 Bishopsgate
London
EC2N 4AA
Bankers
National Westminster Bank plc
135 Bishopsgate
London
EC2M 3UR
Coutts & Co
440 Strand
London
WC2R 0QS
Public Relations Consultants
Teneo
The Carter Building
11 Pilgrim Street
London
EC4V 6RN
ALTERNATIVE PERFORMANCE MEASURES
Overview
To provide a comprehensive explanation of our business performance, we present
and analyse our results using financial measures that include certain
Alternative Performance Measures (APMs). APMs are non-GAAP metrics intended to
supplement disclosures prepared in accordance with applicable regulatory
frameworks, such as International Financial Reporting Standards (IFRS) and
Solvency II. We consider these measures to offer additional insight into our
financial performance; however, they should be regarded as complementary to,
and not a replacement for, measures determined under those regulations.
Accordingly, these APMs may not be directly comparable to similarly titled
measures reported by other entities.
Further details on APMs derived from both IFRS and Solvency II measures are
provided in the following section.
Change in APMs
As part of the broader implementation of the new Financial Framework, the
Group has introduced Operating Capital Generation (OCG) and Adjusted Operating
Profit (AOP) as additional Alternative Performance Measures. These metrics are
designed to offer a clearer view of the Group's underlying business
performance and its ability to generate sustainable capital surpluses over the
longer term. These measures are widely used within the insurance sector and
enhance the relevance and comparability of financial reporting for
stakeholders.
Traditional IFRS and SII metrics can be subject to short-term market
volatility, accounting adjustments, and exceptional items, which may obscure
the underlying operational results. By contrast:
· OCG reflects the capital generated from ongoing operations,
excluding the impact of market movements and non-recurring items, thereby
providing a clearer measure of the Group's ability to create sustainable
capital to support dividends and growth. OCG will replace Cash Generation as
the Group's primary measure of solvency surplus, which is subject to the
volatilities noted above.
· AOP adjusts statutory IFRS Profit Before Tax for exceptional or
non-operational items and short-term market fluctuations, offering a
consistent and comparable measure of operating profitability aligned with
management's view of performance.
The following table identifies the key APMs used in this report, how each is
defined and why we use them.
APM What is it? Why do we use it?
Adjusted Operating Profit (AOP) Adjusted Operating Profit is IFRS profit before tax adjusted for the impacts It helps give stakeholders a better understanding of the performance of the
of economic volatility, amortisation and impairments of intangibles, finance Group by identifying and analysing non-operating items.
and restructuring costs and other non-operating items which in the Director's
view should be excluded by their nature or incidence to enable a full
NEW understanding of financial performance.
Assets under Administration (AuA) AuA reflects the value of the financial assets that the business administers, AuA provides an indication of the scale of the business, and the potential
as reported in the IFRS Consolidated Balance Sheet. future returns that can be generated from the assets that the Group manages
and administers on behalf of customers.
Leverage A financial measure that demonstrates the degree to which the Company is This measure indicates the overall level of indebtedness of the Group and is
funded by debt financing versus equity capital, presented as a ratio. It is also a key component of the bank covenant arrangements held by Chesnara.
defined as debt divided by debt plus equity, with the equity denominator
adding back the net of tax CSM liability, as measured under IFRS.
IFRS Capital Base IFRS net equity plus the consolidated CSM net of reinsurance and tax It is a more appropriate measure of the value of the business than net equity
as it allows for the store of deferred profits held in the balance sheet, as
represented by the CSM, including those as yet unrecognised profits from
writing new business and acquisitions.
Operating Capital Generation (OCG) OCG measures the amount of Solvency II capital the Group generates from OCG enhances Solvency II surplus which can be used to support sustainable cash
operating activities. OCG reflects only the operational movements in Own Funds remittances from our businesses, which in turn, supports the Group's dividend
NEW and SCR, removing the impacts of investment variances, integration and as well as funding further investment to provide sustainable growth.
restructuring costs and other non-operating variances.
Solvency Coverage Ratio Solvency is a fundamental financial measure which is of paramount importance Solvency gives policyholders comfort regarding the security of their
to investors and policyholders. It represents the relationship between the provider. This is also the case for investors together with giving them a
value of the business as measured on a Solvency II basis - Own Funds and the sense of the level of potential surplus available to invest in the business or
capital the business is required to hold - the Solvency Capital Requirement distribute as dividends, subject to other considerations and approvals.
(SCR). Solvency can be reported as an absolute surplus value or as a ratio.
Cash Generation Cash Generation is used by the Group as a measure of assessing how much #The measure provides stakeholders with enhanced insight into cash generation,
dividend potential has been generated, subject to ensuring other constraints drawing out components of the result relating to technical complexities or
Note - this measure was previously referred to as 'Commercial Cash are managed. exceptional items. The result is deemed to better reflect the Group's view of
Generation'. There has been no change to the basis of calculation.
commercial performance, showing key drivers within that.
Cash Generation excludes the impact of technical adjustments and modelling
changes; representing the inherent commercial cash generated by the business.
Economic Value (EcV) EcV is a financial metric that is derived from Solvency II Own Funds. It EcV reflects the market-related value of in-force business and net assets of
provides a market consistent assessment of the value of existing insurance the non-insurance business and hence is an important reference point by which
businesses, plus adjusted net asset value of the non-insurance business within to assess the Group's value. A life and pensions group may typically be
the group. characterised as trading at a discount or premium to its Economic Value.
Analysis of EcV provides additional insight into the development of the
We define EcV as Own Funds adjusted for contract boundaries, risk margin and business over time. The EcV development of the Group over time can be a strong
restricted with-profit surpluses. As such, EcV and Own Funds have many indicator of how we have delivered to our strategic objectives.
common characteristics and tend to be impacted by the same factors.
Economic Value (EcV) Earnings The principal underlying components of the EcV Earnings are: By recognising the market-related value of in-force business (in-force value),
a different perspective is provided in the performance of the group and on the
- The expected return from existing business (being the effect of the unwind valuation of the business. EcV earnings are an important KPI as they provide
of the rates used to discount the value in-force); a longer-term measure of the value generated during a period. The EcV
Earnings of the Group can be a strong indicator of how we have delivered
- Value added by the writing of new business; against all three of our core strategic objectives.
- Variations in actual experience from that assumed in the opening
valuation;
- The impact of restating assumptions underlying the determination of
expected cash flows; and
- The impact of acquisitions.
New Business Contribution A more commercially relevant measure of new business profit than that This provides a fair commercial reflection of the value added by new business
recognised directly under the Solvency II regime, allowing for a modest level operations and is more comparable with how new business is reported by our
of return, over and above risk-free, and exclusion of the incremental risk peers, improving market consistency.
margin Solvency II assigns to new business.
Cash Cash paid by our Business Units to the Group, primarily consisting of Cash remittances are considered a useful measure as they support the payments
dividends. of external dividends.
Remittances
NEW
Policies/ Policy count is the number of policies that the Group manages on behalf of This is important to show the scale of the business, particularly to provide
customers. context to the rate at which the closed-book business is maturing. In our open
Policy Count businesses, the policy count shows the net impact of new business versus
policy attrition.
GLOSSARY
Adjusted Operating profit A measure of the pre-tax profit earned from a Company's ongoing core business
operations, excluding any profit earned from investment market conditions in
the period and any economic assumption changes in the future (Alternative
Performance Measure - APM).
ALM Asset Liability Management - management of risks that arise due to mismatches
between assets and liabilities.
APE Annual Premium Equivalent - an industry wide measure that is used for
measuring the annual equivalent of regular and single premium policies.
ASR Annual Sustainability Report
CA Countrywide Assured plc.
CALH Countrywide Assured Life Holdings Limited and its subsidiary companies.
CASLP Sanlam Life & Pensions UK Limited
BLAGAB Basic life assurance and general annuity business
Base Cash Generation This represents the cash that has been generated in the period. The cash
generating capacity of the Group is largely a function of the movement in the
solvency position of the insurance subsidiaries within the Group and takes
account of the buffers that management has set to hold over and above the
solvency requirements imposed by our regulators. Cash generation is reported
at a Group level and also at an underlying divisional level reflective of the
collective performance of each of the divisions prior to any Group level
activity.
Cash Generation Base Cash Generation excluding the impact of technical adjustments, modelling
changes and exceptional corporate activity; the inherent commercial cash
generated by the business.
Chesnara Life Chesnara Life (UK) Limited (formerly HSBC Life (UK) Limited)
Core Surplus Emergence Absolute surplus movement of the divisions including Chesnara entity but
adjustments will be made for the impact of items such as FX, T2/T3
restrictions, acquisition impacts and shareholder dividends as deemed
appropriate.
(Note: Any adjustments will be subject to Board approval (and Remco approval
if they impact remuneration) and will be transparently reported.)
CSM Contractual Service Margin (CSM) represents the unearned profit that an entity
expects to earn on its insurance contracts as it provides services.
CSRD Corporate Sustainability Reporting Directive
Divisional Cash Generation This represents the cash generated by the three operating divisions of
Chesnara (UK, Sweden and the Netherlands), exclusive of Group level activity.
Dividend Cover Defined as Cash Generation divided by the total of the interim and final
proposed shareholder dividend for the financial year.
DORA Digital Operational Resilience Act (European Union regulation)
DNB De Nederlandsche Bank is the central bank of the Netherlands and is the
regulator of our Dutch subsidiaries.
DPF Discretionary Participation Feature - A contractual right under an insurance
contract to receive, as a supplement to guaranteed benefits, additional
benefits whose amount or timing is contractually at the discretion of the
issuer.
Dutch business Scildon and the Waard Group, consisting of Waard Leven N.V., Waard Schade N.V.
and Waard Verzekeringen B.V.
Economic profit A measure of pre-tax profit earned from investment market conditions in the
period and any economic assumption changes in the future (Alternative
Performance Measure - APM).
EcV Economic Value is a financial metric that is derived from Solvency II Own
Funds. It provides a market consistent assessment of the value of existing
insurance businesses, plus adjusted net asset value of the non-insurance
business within the Group.
EcV Earnings Measure of the value generated by the Group in a period.
FCA Financial Conduct Authority
FI Finansinspektionen, being the Swedish Financial Supervisory Authority.
Form of proxy The form of proxy relating to the General Meeting being sent to shareholders
with this document.
FSMA The Financial Services and Markets Act 2000 of England and Wales, as amended.
GMM General Measurement Model - the default measurement model which applies to
insurance contracts with limited or no pass-through of investment risks to
policyholders.
Group Chesnara plc and its subsidiary undertakings.
Group Centre Parent Company operations of Chesnara plc
Group Own Funds In accordance with the UK's regulatory regime for insurers it is the sum of
the individual capital resources for each of the regulated related
undertakings less the book-value of investments by the group in those capital
resources.
Group SCR In accordance with the UK's regulatory regime for insurers it is the sum of
individual capital resource requirements for the insurer and each of its
regulated undertakings.
Group solvency Group solvency is a measure of how much the value of the company exceeds the
level of capital it is required to hold in accordance with Solvency II
regulations.
HCL HCL Insurance BPO Services Limited.
IFRS International Financial Reporting Standards.
IFA Independent Financial Advisor.
KPI Key performance indicator.
LACDT Loss Absorbing Capacity of Deferred Tax
Leverage A financial measure that demonstrates the degree to which the Company is
funded by debt financing versus equity capital, usually presented as a ratio,
defined as debt divided by debt plus equity, with the equity denominator
adding back the net of tax CSM liability, as measured under IFRS
LTI Long-Term Incentive Scheme - A reward system designed to incentivise executive
directors' long-term performance.
Movestic Movestic Livförsäkring AB.
London Stock Exchange (LSE) London Stock Exchange plc.
New business The present value of the expected future cash inflows arising from business
written in the reporting period.
Official List The Official List of the Financial Conduct Authority.
Ordinary shares Ordinary shares of 5 pence each in the capital of the company.
ORSA Own Risk and Solvency Assessment.
Own Funds In accordance with the UK's regulatory regime for insurers it is the sum of
the individual capital resources for each of the regulated related
undertakings less the book-value of investments by the Company in those
capital resources.
PAA Premium allocation approach - a simplified measurement model which can be
applied to short term contracts.
PRA Prudential Regulation Authority.
QRT Quantitative Reporting Template.
RA Risk adjustment is the additional reserve held for non-financial risks.
Resolution The resolution set out in the notice of General Meeting set out in this
document.
RCF 3 year Revolving Credit Facility of £150m (currently unutilised) renewed in
July 2024
RMF Risk Management Framework.
Robein Leven Robein Leven N.V.
Scildon Scildon N.V.
Shareholder(s) Holder(s) of ordinary shares.
Solvency II A fundamental review of the capital adequacy regime for the European insurance
industry. Solvency II aims to establish a set of EU-wide capital requirements
and risk management standards and has replaced the Solvency I requirements.
Solvency (absolute) surplus A measure of how much the value of the Company (Own Funds) exceeds the level
of capital it is required to hold
Standard Formula The set of prescribed rules used to calculate the regulatory SCR where an
internal model is not being used.
STI Short-Term Incentive Scheme - A reward system designed to incentivise
executive directors' short-term performance.
SCR In accordance with the UK's regulatory regime for insurers it is the sum of
individual capital resource requirements for the insurer and each of its
regulated undertakings.
Swedish business Movestic and its subsidiaries and associated companies.
S&P Save & Prosper Insurance Limited and Save & Prosper Pensions Limited.
TCF Treating Customers Fairly - a central PRA principle that aims to ensure an
efficient and effective market and thereby help policyholders achieve fair
outcomes.
TCFD Task Force on Climate-related Financial Disclosures. An international
framework that provides recommendations for how organisations should disclose
climate‑related financial risks and opportunities in a consistent,
decision‑useful way
Tier 2 Term debt capital (Tier 2 Subordinated Notes) issued in February 2022 with a
10.5 year maturity and 4.75% coupon rate.
Transfer ratio The proportion of new policies transferred into the business in relation to
those transferred out.
TSR Total Shareholder Return, measured with reference to both dividends and
capital growth.
UK or United Kingdom The United Kingdom of Great Britain and Northern Ireland.
UK business CA, S&P and CASLP
VA The Volatility Adjustment is a measure to ensure the appropriate treatment of
insurance products with long-term guarantees under Solvency II. It represents
an adjustment to the rate used to discount liabilities to mitigate the effect
of short-term volatility bond returns.
VFA Variable Fee Approach - the measurement model that is applied to insurance
contracts with significant investment-related pass-through elements.
Waard The Waard Group (now part of Scildon following the legal merger in 2025).
NOTE ON TERMINOLOGY
The principal reporting segments of the Group are:
CA - which comprises the original business of Countrywide Assured plc, the
Group's original UK operating subsidiary; City of Westminster Assurance
Company Limited, which was acquired by the Group in 2005, the long-term
business of which was transferred to Countrywide Assured plc during 2006;
S&P which was acquired on 20 December 2010. This business was
transferred from Save & Prosper Insurance Limited and Save & Prosper
Pensions Limited to Countrywide Assured plc on 31 December; and Protection
Life Company Limited which was acquired by the Group in 2013, the long-term
business of which was transferred into Countrywide Assured plc in 2014, as
well as the portfolio of policies acquired from Canada Life on 16 May 2023 and
reinsured into Countrywide Assured plc;
CASLP - 'SLP' - Sanlam Life & Pensions (UK) Limited which was acquired 28
April 2022. CASLP was dissolved by court order on 14 January 2025;
CL - Chesnara Life (UK) Limited (formerly HSBC Life (UK) Limited) was acquired
on 30 January 2025;
Movestic - which was purchased on 23 July 2009 and comprises the Group's
Swedish business, Movestic Livförsäkring AB and its subsidiary and
associated companies;
The Waard Group - which was acquired on 19 May 2015 and comprises two
insurance companies; Waard Leven N.V. and Waard Schade N.V.; and a service
company, Waard Verzekeringen B.V.; Robein Leven N.V. acquired on 28 April
2022; and the insurance portfolio of Conservatrix acquired on 1 January 2023;
Waard Leven merged into Scildon on 1 July 2025 and Waard Vezekeringen was
dissolved on 31 December 2025.
Scildon - which was acquired on 5 April 2017; and
Other Group activities which represents the functions performed by the Parent
Company, Chesnara plc. Also included in this segment are consolidation
adjustments.
Registered and head office
2nd Floor,
33-34 Winckley Square, Preston, PR1 3JJ.
T +44(0)1772 972050
www.chesnara.co.uk
Registered number: 04947166
Cautionary and Forward-Looking Statements
This document has been prepared for the members of Chesnara plc and no one
else. Chesnara plc, its directors or agents do not accept or assume
responsibility to any other person in connection with this document and any
such responsibility or liability is expressly disclaimed. Nothing in this
document should be construed as a profit forecast or estimate.
This document may contain, and we may make other statements (verbal or
otherwise) containing, forward-looking statements with respect to certain of
the plans and current expectations relating to the future financial condition,
business performance, and results, strategy and/or objectives (including
without limitation, climate-related plans and goals) of Chesnara plc.
Statements containing the words 'believes', intends', 'will', 'expects',
plans', 'aims', 'seeks', 'targets', 'continues' and 'anticipates' or other
words of similar meaning are forward looking.
By their nature, all forward-looking statements involve risk and uncertainty
because they relate to future events and circumstances that are beyond the
control of Chesnara plc including, amongst other things, UK domestic, Swedish
domestic, Dutch domestic and global economic, political, social, environmental
and business conditions, market-related risks such as fluctuations in interest
rates, currency exchange rates, inflation, deflation, the impact of
competition, changes in customer preferences, delays in implementing
proposals, the timing, impact and other uncertainties of future acquisitions
or other combinations within relevant industries, the policies and actions of
regulatory authorities, the impact of tax or other legislation and other
regulations in the jurisdictions in which Chesnara plc and its subsidiaries
operate. As a result, Chesnara plc's actual future condition, business
performance and results may differ materially from the plans, goals and
expectations expressed or implied in these forward-looking statements.
No representation is made with regard to forward looking statements, including
that any future results will be achieved. As a result, you are cautioned not
to place undue reliance on such forward-looking statements contained in this
document. Chesnara undertakes no obligation to update any of the
forward-looking statements contained within this document or any other
forward-looking statements we make. Forward-looking statements in this report
are current only as of the date on which such statements are made.
The climate metrics used in this document should be treated with special
caution, as they are more uncertain than, for example, historical financial
information and given the wider uncertainty around the evolution and impact of
climate change. Climate metrics include estimates of historical emissions and
historical climate change and forward-looking climate metrics (such as
ambitions, targets, climate scenarios and climate projections and forecasts).
Our understanding of climate change and its impact continue to evolve.
Accordingly, both historical and forward-looking climate metrics are
inherently uncertain and Chesnara expects that certain climate disclosures
made in this document are likely to be amended, updated, recalculated or
restated in the future.
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. END FR FXLLLQXLFBBQ
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