Chesnara H1 2025 Earnings Call Transcript

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Provided by Quartr
August 28, 2025

Key Takeaways

  • Positive Sentiment: Chesnara announced the proposed acquisition of HSBC Life UK—its largest deal ever—financed by a £140 million rights issue and expected to deliver over £800 million of incremental lifetime cash generation, 450 000 policies, and £4 billion of assets under administration.
  • Positive Sentiment: The group completed the legal merger of its Dutch businesses, migrated another UK book onto the new SS&C platform, issued its first RT1 bond raising £150 million, and was admitted to the FTSE 250—boosting liquidity and strategic firepower.
  • Positive Sentiment: First-half cash generation rose by 26% year-on-year to £37 million, the Solvency II ratio strengthened to 207% (above the 140-160% target range), new business remained robust, and the interim dividend was increased by 3% (with a 6% full-year hike).
  • Negative Sentiment: Sweden’s unit-linked operations were weighed down by currency headwinds—principally a US Dollar depreciation against the krona—which drove adverse economic variances and higher lapse rates.
  • Positive Sentiment: Looking ahead, Chesnara will integrate its Dutch operations, migrate the HSBC portfolio onto its platform, pursue an active M&A pipeline in the UK and Europe, and publish its first climate transition plan targeting net-zero by 2050.
AI Generated. May Contain Errors.
Earnings Conference Call
Chesnara H1 2025
00:00 / 00:00

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Steve Murray
Steve Murray
Group CEO & Executive Director at Chesnara

Welcome to the Chesnarra Interim twenty twenty five Results Presentation. I'm Steve Murray, Group Chief Executive, and with me today is Tom Howard, our Group Chief Financial Officer. Tom and I are hosting the presentation today in London from Pamure Liberum's offices. And as well as the people here with us in London, we also have people dialing in from across the world, including Chesnarda, colleagues from The UK, Sweden and The Netherlands. Thanks for joining us today.

Steve Murray
Steve Murray
Group CEO & Executive Director at Chesnara

So what will we cover? Well, I'll start by looking at our headline financial results and highlighting some of the key activities we've undertaken over the 2025. Tom will cover the financial results in more detail, and I'll then finish looking at some of our future areas of focus. We'll have plenty of time for questions at the end of our presentation. For those of you that are watching online, you can submit questions during the presentation itself.

Steve Murray
Steve Murray
Group CEO & Executive Director at Chesnara

And for those of you here in the room with us, we'll come to you directly with microphones. Our strategy remains fully focused on the three areas set out on this slide: managing the books of business we have efficiently and effectively, looking to execute value accretive M and A and writing profitable new business. And embedded across these strategic priorities is our aspiration to become a sustainable Chesnaira. This focus helps ensure we have strong line of sight to future sources of value and long term cash generation, which in turn supports our long standing progressive dividend. And I'm pleased to report it's been another successful period of financial and operational delivery, including the achievement of several strategic milestones for the group.

Steve Murray
Steve Murray
Group CEO & Executive Director at Chesnara

In July, we announced the proposed acquisition of HSBC Life UK, the largest deal in our history. That was partly financed by GBP 140,000,000 rights issue, which was strongly supported by our investors. As well as this major strategic milestone, we also completed the legal merger of our Dutch businesses, migrated another UK book onto our new platform managed by SS and C, and we issued our first RT1 bond, raising a further GBP 150,000,000 of capital to support future M and A activity. And on the August 18, we were admitted into the FTSE two fifty for the first time, and we've already seen improved liquidity and reduced volatility in the trading period since. In this period of significant strategic progress, we've also delivered positive financial results in the first half of the year.

Steve Murray
Steve Murray
Group CEO & Executive Director at Chesnara

We saw strong cash generation, up 26% versus half year 2024. Our solvency ratio remains well above our operating range and the contribution from new business remains robust. And off the back of our strong cash generation and solvency position, we've yet again announced an increase in our interim dividend. On the July 3, we announced the proposed acquisition of HSBC Life UK Limited, our fifteenth and largest ever acquisition announced. We presented this slide to investors back in July, highlighting some of the key attractions of the deal.

Steve Murray
Steve Murray
Group CEO & Executive Director at Chesnara

These include the expected incremental lifetime cash generation of over GBP 800,000,000, pricing being at a very healthy discount to own funds, the addition of over 450,000 policies and around GBP 4,000,000,000 of assets under administration and the acquisition providing us with further strategic optionality around The UK new business capability that we're acquiring. The deal positively met the four parts of our financial framework that we have for assessing deals, covering solvency, leverage, liquidity and future firepower. Overall, we believe the acquisition will deliver compelling value for investors and represents a major milestone for the group. And we're looking forward to welcoming HSBC Life UK people and customers to Chesnara in the 2026. I'm pleased to confirm we're again increasing the interim dividend by 3%.

Steve Murray
Steve Murray
Group CEO & Executive Director at Chesnara

This maintains our unrivaled track record of consecutive dividend growth across The UK and European insurance sector. As part of the HSBC Life UK acquisition announcement, we also confirmed a single year increase of 6% to the full year 2025 and interim 2026 dividend, representing a one year acceleration of our recent dividend growth trajectory. So with that, let me hand over to Tom, who will take us through the financial results in more detail.

Tom Howard
Tom Howard
CFO & Executive Director at Chesnara

Hi, Steve, and good morning, everyone. So it's been another period of growth for Chesnara. We're reporting a strong set of financial results, and we're increasing returns for our shareholders. As Steve mentioned earlier, we've also been busy since the half year with the announcement of the HSBC Life UK acquisition and our successful equity and debt issuances. These are transformative actions for the financial profile of the group.

Tom Howard
Tom Howard
CFO & Executive Director at Chesnara

And whilst they won't form part of today's results, I will provide pro form a impacts later in this presentation. So looking at the financial highlights over the half year. The group's cash generation grew year on year to GBP 37,000,000. The solvency ratio increased by four percentage points to 207%, and our leverage ratio remained steady at 31%. And the group continues to have strong, predictable sources of future value from the existing balance sheet.

Tom Howard
Tom Howard
CFO & Executive Director at Chesnara

Both owned funds and the IFRS Contractual Services margin benefited from positive operating and economic performance across our businesses. And finally and importantly, we're continuing to deliver for our shareholders, extending our track record of dividend growth. Our operating divisions reported a total of GBP55 million in cash generation over the half. In The UK, results benefited from positive market conditions, particularly in Q2, and management actions from the extension of existing MassLabs reinsurance coverage and the implementation of a currency hedge. In Sweden, whilst we saw solid operating performance, this was offset by negative economic variances, primarily from the continued depreciation of the U.

Tom Howard
Tom Howard
CFO & Executive Director at Chesnara

S. Dollar against the Swedish krona. And our businesses in The Netherlands benefited from both positive operating results and the impact of lower interest rates and credit spreads over the half. After allowing for center costs, cash generation of GBP 37,000,000 is 26% higher than the prior year, and at 1.4x, it continues to provide strong coverage against the dividend. Turning to the balance sheet.

Tom Howard
Tom Howard
CFO & Executive Director at Chesnara

The group's solvency ratio remains strong and its resilience to changing market conditions. Over the first half, operating activities generated eight percentage points in solvency surplus, comfortably covering the four percentage point cost of the dividend. Management actions contributed a further four percentage points in solvency surplus, reflecting The UK's reinsurance and foreign exchange hedging arrangements, which I touched on earlier. After factoring in Solvency II tiering adjustments, the group's solvency coverage ratio of 207% remains comfortably above our operating range of 140% to 160%, and this gives us significant financial flexibility to invest for further growth. Group owned funds were resilient over the period, supported by positive operating and economic performance.

Tom Howard
Tom Howard
CFO & Executive Director at Chesnara

The operating result increased year on year, driven by improved expense trends in The UK and The Netherlands and another period of robust new business performance across the group. This was partially offset by adverse impacts from lapse activity in Sweden and mortality experience in our Skillen business in The Netherlands. Favorable market conditions supported a positive economic result, and this continues to be a recurring source of value creation for the group. After allowing for dividends and tax, the closing owned funds of GBP $632,000,000 represents a prudent measure of the future value available to the group across the entirety of the insurance and the investment portfolio. Moving to IFRS.

Tom Howard
Tom Howard
CFO & Executive Director at Chesnara

The Contractual Services margin grew by GBP 11,000,000 over the half, increasing the store of future value within the Insurance portfolio and supporting growth in the IFRS capital base. The Insurance results increased year on year, reflecting stronger underlying operating performance. The net investment result was lower year on year, reflecting positive but less favorable market conditions. And foreign exchange impacts contributed positively to the IFRS capital base, mainly from the depreciation of sterling relative to the euro and the Swedish krona. Overall, the IFRS capital base was broadly in line with the prior year after allowing for the payment of the full year 2024 final shareholder dividend.

Tom Howard
Tom Howard
CFO & Executive Director at Chesnara

So I mentioned earlier that today's results don't allow for the impact of a number of significant post balance sheet events. The group's proposed acquisition of HSBC Life UK will materially increase the scale of our UK business, and it will significantly increase the group's financial flexibility into the long term. Our recent rights and debt issuances totaling $290,000,000 will provide the group with resources to both fund the acquisition and to retain significant levels of capital and liquidity headroom to invest in further M and A opportunities. So what does all of this mean for the numbers? Restating the opening 2025 balance sheet to allow for these impacts shows the following: The group's own funds will increase by 60% to just over GBP 1,000,000,000, reflecting the impacts of both the integration of the HSBC Life UK portfolio and the additional capital raise.

Tom Howard
Tom Howard
CFO & Executive Director at Chesnara

At just below 200%, the Solvency II ratio remains significantly above the upper end of our operating range. Our leverage position also improves. On a pro form a basis, we expect the group's leverage ratio to improve by around five percentage points, comfortably within our long term target of 30% or less. Now I've previously used this slide to illustrate the recurring and predictable components of the group's cash generation. And today's results show that we continue to generate organic surplus in each of the areas highlighted.

Tom Howard
Tom Howard
CFO & Executive Director at Chesnara

Moving from left to right. Firstly, positive operating results were driven by both the runoff of the group's capital requirements and improved operating experience in The UK and The Netherlands. Secondly, market conditions drove positive economic surpluses as returns exceeded the prudent, risk free levels that we assume within our models. Thirdly, we implemented management actions to optimize the capital position in our UK business, freeing up available surplus. And lastly, we continue to write profitable new business across the group.

Tom Howard
Tom Howard
CFO & Executive Director at Chesnara

And of course, all of this is before we allow for the impact of the additional GBP 800,000,000 of long term future cash flows we expect to generate from the HSBC Life UK acquisition. And so to conclude. Continued delivery of our strategy has led to another period of strong financial performance for the group and increased returns to our shareholders. The HSBC Life UK deal, along with our successful equity and debt issuances, will transform the financial flexibility of the group. And we continue to have a robust balance sheet with significant levels of capital resources and liquidity to deploy against an active M and A pipeline. And with that, I'll pass back to Steve.

Steve Murray
Steve Murray
Group CEO & Executive Director at Chesnara

Thanks, Tom. So at the start of the presentation, I highlighted a number of areas of major strategic delivery so far this year. Looking forward, I wanted to set out where I expect to see the main activity across the group over the coming months. Following the completion of the legal merger of our Dutch businesses, the financial and operational work required to more fully integrate the business is already underway and will continue throughout the remainder of 2025 and 2026. We continue to see the potential for further expense and capital synergies from this activity.

Steve Murray
Steve Murray
Group CEO & Executive Director at Chesnara

Our work in The UK continues to move further books onto our new platform with SS and C, albeit with some re phasing to incorporate the anticipated migration of the HSBC book in 2026. As a reminder, completion of the HSBC Life UK deal is targeted for the early part of 2026. We're actively working on further M and A opportunities and we continue to expect the majority of our future growth to come from M and A. And we see some further opportunities to enhance our new business contribution from our existing business lines as well as some interesting strategic optionality from the capability in HSBC Life UK. And finally, in September, we'll be publishing our first ever climate transition plan, which will set out some of the more detailed steps we'll take to meet our ambition to be a net zero business by 02/1950.

Steve Murray
Steve Murray
Group CEO & Executive Director at Chesnara

On M and A, we continue to see a positive M and A pipeline. We believe the announcement of the HSBC deal shows that we're well regarded positively by both large financial institutions and regulators and so are well positioned to take advantage of further M and A opportunities including larger size deals. And we're continuing to positively assess opportunities now. In the short term there's a little more work happening in Europe where we have the operational capacity to take on M and A opportunities immediately. And whilst we're mindful of ensuring we deliver the planned completion and migration of HSBC Life UK, there continue to be further potential opportunities in The UK as well.

Steve Murray
Steve Murray
Group CEO & Executive Director at Chesnara

So overall, we see a positive M and A pipeline well into 2026 and beyond, and we retain the capacity, capability and firepower to deliver. I mentioned earlier that the HSBC Life UK deal strongly met all four areas of our financial framework, which is set out on this slide. Our approach to financing the HSBC deal, including our GBP 140,000,000 rights issue and the subsequent GBP 150,000,000 RT1 bond issuance, means that our level of immediately available firepower has been restored to over GBP 200,000,000. So we've achieved several major strategic milestones for the group so far this year. We've seen strong financial results, a further increase in the interim dividend, the announcement of the largest acquisition in our history, the completion of a legal merger of our Dutch businesses and we've restored our immediately available firepower to support future M and A.

Steve Murray
Steve Murray
Group CEO & Executive Director at Chesnara

I want to thank colleagues across the group for all their efforts so far in 2025 in what has been an exceptional period of delivery. There's more for us to do, and I continue to believe there's a lot to look forward to here at Chesnara. So let's pause the presentation, and we'll turn over for questions. We're going to find a mic. Abid, your hand was up quickest, so well done even though you were late into the room.

Abid Hussain
Equity Analyst - MD & Head - Insurance Coverage at Panmure Liberum

Well spotted. It's Abid Hussein from Penwell Liberum. I've got I'll limit myself to three questions. And if there's time at the end, I'll come back with my other questions. So the first one is on the uses of cash generation.

Abid Hussain
Equity Analyst - MD & Head - Insurance Coverage at Panmure Liberum

Our own capital generation modeling suggests that the jaws between the free cash flow and the dividend are starting to open up over the medium term. Are you hoping to utilize that retained capital for growth opportunities? So could you outline the uses for the increasing flow of cash that we see over the medium term? So that's the first question. And then the second one is on firepower and M and A bandwidth.

Abid Hussain
Equity Analyst - MD & Head - Insurance Coverage at Panmure Liberum

I think you said there's over 200,000,000 firepower. Clearly, liquidity at the center looks very strong on a pro form a basis. But just wondering, does the team have the bandwidth to conduct other transactions in parallel with integrating and digesting the HSBC deals? Any color on that, please? And then the final one is on the M and A pipeline.

Abid Hussain
Equity Analyst - MD & Head - Insurance Coverage at Panmure Liberum

Can you share what type of potential deals are in the hopper? I think you were looking at other deals before the HSBC deal landed. Could you just give us some color in terms of geography and product? And then sort of some background info in terms of is there increased demand from vendors to clean up their own books given that the valuations in the listed market is undemanding? Is there sort of an additional demand to the usual demand for IT, tech and sort of the unit economics, which is sort of the underlying reason?

Abid Hussain
Equity Analyst - MD & Head - Insurance Coverage at Panmure Liberum

Is there any additional demand that you're seeing off the back of that? Thank you. Okay.

Steve Murray
Steve Murray
Group CEO & Executive Director at Chesnara

Thanks, Habib. Shall I take I'll take pipeline and firepower and then sort of uses of cash. You can give your perspectives on how that opens and what we'll be using that for. So in terms of pipeline, what we've tried to do over the last couple of years is give a little bit more color around the sorts of things that we're looking at. And you're right to say we were looking at other things alongside the HSBC Life UK deal.

Steve Murray
Steve Murray
Group CEO & Executive Director at Chesnara

So from a capacity perspective, even though we've got a relatively small central team, we can scale that up through the use of advisers. We obviously utilize the strong support of business units. So on the HSBC Life UK deal, Jackie, who's in the room, and her team played a huge role as part of that deal supporting diligence and doing the sort of integration and migration planning. So that does mean that the sort of the pipe that we have centrally to assess deals due to your diligence is quite sort of expandable. And we can look at multiple things at the same time, but we have done that over the last few years as well.

Steve Murray
Steve Murray
Group CEO & Executive Director at Chesnara

And we certainly went a lot of that burden sort of falls on myself, Tom and Sam, and we certainly feel we've got the bandwidth to do more. And when we announced the HSBC Life deal on the Thursday, we took a sort of break on the Friday and we were back at it on the Monday. That's how we work and that's because we're seeing very attractive opportunities to assess. In terms of sort of geographies, so we are seeing opportunities in each of the geographies that exist in at the moment. We've talked about sort of wider Benelux, so we are seeing some opportunities in sort of adjacent markets to The Netherlands particularly that might be quite interesting.

Steve Murray
Steve Murray
Group CEO & Executive Director at Chesnara

When we look at those opportunities, they're all product sets that we run within the existing portfolios that we have. So some of that is unit linked business. We are seeing still some term assurance opportunities as well. And I think we've talked before that one of the things that Tom and I have been particularly focused on is looking forward extension of the cash flows of the group into the long term. HSBC Life UK is very, very helpful around that with that over GBP 800,000,000 lifetime cash generation coming through.

Steve Murray
Steve Murray
Group CEO & Executive Director at Chesnara

And we are seeing some books of business that have some further long term sort of cash generation. I think I'll go into any more detail, you'll start to figure out what we're looking at. So I'll pause there. In terms of firepower, you're right. So we're talking about having, in effect, where believe we're sort of back broadly to the position that we were at before the HSBC Life UK deal.

Steve Murray
Steve Murray
Group CEO & Executive Director at Chesnara

So the RTE1 bond clearly has been a major factor around that, the 150,000,000. We were really pleased with the support from the market that we got and the coupon that we were able to get for the bond. We don't see liquidity being a constraint. We don't see sort of solvency being a constraint. So when you look at those four areas of the financial sort of scorecard that we tend to look at, all of those, we put a tick in those in terms of our ability to be able to deploy further capital.

Steve Murray
Steve Murray
Group CEO & Executive Director at Chesnara

And the pro form a position we presented is probably a little bit better than we might have been anticipating because of some of the positive underlying performance from our business in the first half. Uses of cash generation?

Tom Howard
Tom Howard
CFO & Executive Director at Chesnara

Yes. So I talked in my piece around HSBC giving us a much greater level of financial flexibility as a group. So I think you can take from that, that our expectation is with GBP 800,000,000 of incremental cash flows coming in, pounds 140,000,000 coming in in the first five years, that is a major leap in terms of where we are now as a balance sheet. So that will that presents us with significant opportunities to deploy extra capital from that trade alone. But also, actually, I alluded to the fact that we exercised two management actions in The U.

Tom Howard
Tom Howard
CFO & Executive Director at Chesnara

K. Over the first half. So when I think about the existing book, so we also look at opportunities to optimize the existing book as well. So when you take the M and A activity, the optimization actions on the existing book, that is the strategy that we employ to free up capital on an ongoing basis. You've seen over the last couple of years, that coverage ratio has increased.

Tom Howard
Tom Howard
CFO & Executive Director at Chesnara

I'm not going to set an expectation around where I kind of see it landing on a steady state, but one should expect a level of accretion, particularly as we continue with a level of success around the M and A strategy. It's all underpinned by a really, really strict capital allocation policy. So in terms of usage, as long as we're seeing and I think Steve covered this, as long as we're seeing attractive M and A opportunities markets that we operate in and perhaps outside of the markets we operate in, which we currently are, that remains the primary use of what I would call excess capital or the additional capital that is thrown off by that increase in the jaws because, frankly, from our investors' perspective, the return that we can generate on those M and A opportunities is just remains very attractive.

Abid Hussain
Equity Analyst - MD & Head - Insurance Coverage at Panmure Liberum

And Steve, did you say that you're all seeing increased M and A activity in the hopper?

Steve Murray
Steve Murray
Group CEO & Executive Director at Chesnara

I think we are. I think it's I wouldn't say it's increased since we last spoke to people at the full year, but I think it had increased to that point. And you alluded to some of the drivers, Abid. I think we're still seeing those. Think large institutions and the HSBC deal was a good example of this and maybe being a little more discerning about where they want to be operating, what sort of is core to strategy.

Steve Murray
Steve Murray
Group CEO & Executive Director at Chesnara

We've seen large insurers and banks certainly sort of trimming portfolios to free up capital to deploy elsewhere. We're seeing a huge amount of activity in The UK market on pension risk transfer, BPA, and a number of you in the room have sort of written about that. And we think that will present us with opportunities as people look to sort of release capital maybe from the other books that they have to deploy on that opportunity as well. So I think we're seeing plenty of activity. I think management teams have been rewarded for taking action proactively in their portfolios.

Steve Murray
Steve Murray
Group CEO & Executive Director at Chesnara

And when we map sort of our pipeline out over the next three years, we think it looks pretty interesting and attractive. So we're trying to have a range of conversations as well as actively working on files now. We're speaking to teams about what they might want to do a year out, two years out, three years out, so that we've got a very good idea of that coming through. I did admit as part of the HSBC deal that we didn't expect this deal to come to the market. So I'm sure we'll get some positive surprises along the way as well.

Steve Murray
Steve Murray
Group CEO & Executive Director at Chesnara

But our analysis suggests that it is an active market. Larissa had a hand up just before you, Michael, sorry, so we'll

Larissa van Deventer
Larissa van Deventer
Equity Research Analyst at Barclays

Thank you. I'm Larissa Van Der Wernte from Barclays. On the IFRS earnings, there was a significant decrease in the investment returns, which admittedly tend to be volatile. Could you give us a sense of what the reasons were and how you're thinking of managing the returns going forward, whether you would deploy hedging strategies and the like, please? Thank you.

Tom Howard
Tom Howard
CFO & Executive Director at Chesnara

Yes. Thanks, Larissa. So you're right. I mean this is a feature of our business. So if you look at our assets under administration, about 85% or so of those assets are unit linked in nature.

Tom Howard
Tom Howard
CFO & Executive Director at Chesnara

So that's the business we're in. You know, the decision that one has to make is around long term, should I say, term value or long term logic of hedging those positions. And look, our position, and we've said this before, is we don't have plans to do that for two reasons mainly. Firstly, we actually quite like the alignment with our policyholder outcomes. So where the markets are performing, our policyholders are benefiting frankly, we're benefiting as well from an own funds perspective, so that alignment is quite important.

Tom Howard
Tom Howard
CFO & Executive Director at Chesnara

Secondly, from a slightly more financial perspective, the hedging does introduce volatility elsewhere in the IFRS result. So whilst you may be solving for one part of the IFRS result, certainly within the PBT, what you're going to find actually is some unintended consequences elsewhere. What we really focus on from an IFRS perspective is the evolution of the capital base. And I know within the capital base, there's sort of geographical bits of what goes into PBT, what goes into OCI and so on. I'm far more focused on how that is growing rather than, frankly, the individual componentry of that.

Tom Howard
Tom Howard
CFO & Executive Director at Chesnara

But you're right, it is an aspect of our business and it is a volatility that we're certainly comfortable to live with.

Steve Murray
Steve Murray
Group CEO & Executive Director at Chesnara

Michael?

Michael Huttner
Insurance Analyst at Berenberg

Thanks, Steve. Thanks, Tom. It's lovely to see you so cheerful. The so I'm always thinking, yes, yes, tomorrow, tomorrow's the deal. HSBC optionality, that was one thing.

Michael Huttner
Insurance Analyst at Berenberg

The second is the numbers are better than you first thought. Maybe can you touch on that and how much more there is to come from HSBC? I think just before you kind of said there was bits of capital you could use. And then the one that I call the ugly duckling, but it could be a nice white swan is a beautiful swan is Sweden. We've had lots of volatility there. What's the outlook? Thanks.

Steve Murray
Steve Murray
Group CEO & Executive Director at Chesnara

Yes. So let me pick up Sweden first. So if we look at the first half of the year, what's been pleasing, the overall sales result has been very strong. So we have two main business lines there. We have our main unit linked business, which is predominantly group pensions, and we have what's a newer business line, which is still unit Linked, which is a custodian business.

Steve Murray
Steve Murray
Group CEO & Executive Director at Chesnara

And we've seen very strong flows into that custodian business. Because that is less developed than Unit Linked, the margins, excuse me, are a little bit lower. So you've seen that sort of flowing through into VNB. From a macro perspective, and Tom sort of alluded to this in his presentation, we've seen a very material shift in sector to dollar during the first part of the year. And whilst we've seen this in previous cycles, it's tend to be much more gradual.

Steve Murray
Steve Murray
Group CEO & Executive Director at Chesnara

So we've taken the full impact of that through the sort of own funds calculations and things that we do at the half year in terms of the sort of 13%, 14% sort of move during the year. And then we've projected that over the lifetime of the book. So there's a reasonable impact of that sort of coming through. And we are continuing to see sort of transfer activity in that market at a slightly higher level than ideally we'd like to see. We're not worried about the performance of our business in that regard.

Steve Murray
Steve Murray
Group CEO & Executive Director at Chesnara

It's an overall market feature, but you are still seeing some business sort of leaving the books at a higher rate than our long term assumption is. So that's why you're seeing some of that impact. What we do have is we've got a very good operating platform that will provide us with operating leverage if we can see stabilization of that dollar position, further business sort of coming on to the books. And we are we're certainly interested in acquisition opportunity if they present themselves. It's just a market that's less active than the other ones.

Steve Murray
Steve Murray
Group CEO & Executive Director at Chesnara

So as you might imagine, where we have active conversations with all of our businesses around what our expectations are around cash generation and return on capital and we'll continue to do that with Saar and the team in Sweden. In terms of sort of the pro form a position and Tom might want to sort of pick up the detail on this. But we tend to start from a relatively prudent position. And then as we sort of go through and do some more detailed modeling, you sometimes find that you don't need some of that prudence. I think we've also seen a strong set of financial results in the first half of the year.

Steve Murray
Steve Murray
Group CEO & Executive Director at Chesnara

You can see our own solvency has improved materially. The cash generation has been very strong. Do you want to just give a bit more color on

Tom Howard
Tom Howard
CFO & Executive Director at Chesnara

No, mean, that's probably why we're so cheerful, Michael. We felt it has been look, it's been a strong six months in terms of trading. And the point then is, well, how are you feeling about the pro form a impact of HSBC plus the rights issue plus the RT1? So we've provided some color in there. So in my remarks, I talked about the fact that actually we've managed to hit that sort of bull's eye of getting the long term leverage ratio actually quite significantly below our target level.

Tom Howard
Tom Howard
CFO & Executive Director at Chesnara

That's important. Keeping the solvency ratio above the upper end of our operating range is really positive because it allows us to retain that future M and A firepower and hopefully win more deals as well. And we've got a strong liquidity position. So that's the pro form a. The trading that has come through in the first six months was actually stronger than we expected, you know, that gives us added confidence in that pro form a position as well.

Tom Howard
Tom Howard
CFO & Executive Director at Chesnara

So, you know, so sat here right now, I think, you know, we like I say, we're feeling very, very good about the first six months trading, and it's it's really supportive of the views the pro form a views we had around the impact of some of these things which are some of two of these things have happened. One of these things we're expected to complete at the start of next year, and we're expecting it to be broadly aligned with the performance.

Steve Murray
Steve Murray
Group CEO & Executive Director at Chesnara

I think your sort of third question or comment was, more to come. That's certainly the plan. As I say, we see a good pipeline in terms of the options that we have with our own business. I do expect there to be more to come from the Dutch merger. There's other management actions that we have that we can execute.

Steve Murray
Steve Murray
Group CEO & Executive Director at Chesnara

And again, we took the opportunity, as Tom said, in the early part of the year, mainly in The UK to deploy a couple of management actions. We saw pricing being attractive. We thought that was a sort of sensible thing to do. And some of those options are available on the HSBC life book when that comes into the fold for us as well. So when we're sort of projecting out, again, that's probably why you're seeing us smiling as well because we are seeing a number of opportunities for us to continue this great track record of cash generation and obviously the best dividend track record in the market in UK and European insurance.

Steve Murray
Steve Murray
Group CEO & Executive Director at Chesnara

I may have mentioned that one or two times previously. Ben?

Analyst

Hi. Ben Koenas, RBC. I had two questions. Firstly, could you say a bit more about new business opportunities in The UK and in Holland just in terms of any sort of macro impacts? I know they're always housing market is always important in that market.

Analyst

And the second question was more of a numbers one. I think you flagged up some project expenses in the first half. Given that the deal only took place in the second half, could you give us some steer in terms of the cost that you might well, you would have incurred in the second half? Thanks.

Steve Murray
Steve Murray
Group CEO & Executive Director at Chesnara

Yes. So I'll pick up new business and Tom can pick up that cost piece. So one of the more recent features of our own UK business is we kept open an onshore investment bond that we acquired as part of the Sanlam Life and Pensions acquisition. That's been really quite a nice feature of our business in terms of the new business we've been bringing in. Most of that comes from connectivity with IFA platforms, particularly the what was the Nucleus platform.

Steve Murray
Steve Murray
Group CEO & Executive Director at Chesnara

And we think there are some opportunities potentially to extend our distribution footprint there as well. So that's interesting optionality. When we think about the HSBC Life UK business, that's far more open to new business than we are at the moment. So again, we're that gives us some interesting options. They operate in the same space in that onshore investment bond space, so we know that well.

Steve Murray
Steve Murray
Group CEO & Executive Director at Chesnara

And they have a good protection franchise as well. So we're working with the teams at the moment, assessing that and we'll update the market as and when we own the business on what that go forward strategy will be. But as always, we'll look at that through a sort of sustainability, a return on capital perspective, but we do think there's some interesting options potentially to increase the amount of business overall then that we end up writing in The UK. In The Netherlands, so you might remember last year was quite a tough year in the term market. We saw sort of lower volumes and lower VNB.

Steve Murray
Steve Murray
Group CEO & Executive Director at Chesnara

We've seen a little bit of an uptick in that in the first half of the year. And under the new leadership team that we have, we think there are some further opportunities to extend the product footprint. So we write a small amount of annuities in that market. It might be we can extend that a little bit. We've got a reasonable savings and investment product, again, that we may be able to extend that a little bit as well.

Steve Murray
Steve Murray
Group CEO & Executive Director at Chesnara

But you might have heard me say in the presentation, look, we our expectation is still that the bulk of the growth that will come into the group will be from M and A. But we do think there are some interesting options to extend what we're doing in that new business space a little bit.

Tom Howard
Tom Howard
CFO & Executive Director at Chesnara

Yes, the cost point. So look, you're right to point out, clearly, this year has been a more active year for us in terms of prosecuting M and A. We did one deal last year at the back end, and it was obviously much smaller than the HSBC Life deal. And also, we have had the RT1 and the rights issuances as well. So look, what I'd point you to is in the rights prospectus, we talked about roughly GBP 10,000,000 costs there.

Tom Howard
Tom Howard
CFO & Executive Director at Chesnara

They're clearly one off, nonrecurring. Where we end up in terms of year on year progression in cost is probably the best way to think about this. Some of this depends on where we get to with M and A in the second half as well. So again, I can't say too much about that, but you can imagine that we are looking at files. But Doug, where more M and A happens, for example, it's likely to be sort of at the upper end of a 10,000,000 to £15,000,000 range.

Tom Howard
Tom Howard
CFO & Executive Director at Chesnara

And perhaps where M and A doesn't happen in the second half, a little bit closer to the bottom of that range in terms of year on year.

Steve Murray
Steve Murray
Group CEO & Executive Director at Chesnara

Andreas? Andreas, do stand here?

Andreas van Embden
Research Analyst - Insurance at Peel Hunt

Thank you. I just had a question around cash remittances to the holding. It was around EUR 56,000,000 in the first half. I just wondered, is there any trapped capital within The Netherlands that could be released in the next twelve months following the integration? And if so, what should we think about in terms of the number?

Andreas van Embden
Research Analyst - Insurance at Peel Hunt

How much can you release up to the holding in the next twelve months? And then on similar question, but then for HSBC, the HSBC Life deal, how long will it take to start remitting cashcapital from that transaction? Is that something that you could start doing towards the 2026? Or should we wait for twenty twenty seven, twenty twenty eight to see significant remittances from this deal coming through? Thank you.

Steve Murray
Steve Murray
Group CEO & Executive Director at Chesnara

Shall I maybe take The Netherlands, you can add to that and then you can take HSBC if we split that between us. So I think you're right to point to some of the benefits that we should expect when we bring the two balance sheets together in The Netherlands. So one of the potential benefits there, if we get some further diversification benefit and improved solvency ratio, is that there'll be more sort of there'll be a bigger clearance level above the sort of minimum thresholds that we like to run-in advance of sort of dividends being paid up. As opposed to sort of looking necessarily at sort of accelerating big chunks of capital, we look at that sort of adding to the longer term sustainability. But it could mean if we needed to that there's a bit more to draw down on going forward.

Steve Murray
Steve Murray
Group CEO & Executive Director at Chesnara

And one of the things that we'll clearly do in the fullness of time is we'll look again at the sort of capital management policies for that business and make sure that they're fit for purpose for a larger business, which Skilden certainly now is post Vaad. So overall, we're expecting a sort of more stable dividend flow to come through from that business as a larger business with a balance sheet that's got a little bit more diversification in it as we bring those things together. You want to pick up HSBC? And anything else you'd want to say on The Netherlands?

Tom Howard
Tom Howard
CFO & Executive Director at Chesnara

Yes. No, no, I think you've covered The Netherlands. I think the HSBC answer is actually relatively straightforward. So we are expecting increased remittances in respect of the year from completion. So the reason being slightly pedantic is we're expecting cash generation in the year of completion, so 2026.

Tom Howard
Tom Howard
CFO & Executive Director at Chesnara

The exact timing of remittances may well be 2026, maybe 2027 in terms of the physical transfer of cash from the subsidiary to the holding company. But that is merely a timing point, that's something that's within our control. But the key point is we are expecting remittances from the year of completion. And actually, I think we were reasonably clear that we were expecting a pretty rapid profile within because we talked about the GBP 140,000,000 of 100 sorry, of the GBP 800,000,000 emerging in the first five years. And I think what we said is we're certainly not expecting that to be a hockey stick emergence over the five years.

Tom Howard
Tom Howard
CFO & Executive Director at Chesnara

It will be relatively stable from the first of those five years. Gordon?

Gordon Aitken
Founder & Managing Director at Aitken Advisory Limited

Gordon. Aiken from Aiken Advisory. So just three questions on M and A, Steve. First, just on the deals, who are you actually competing with? Because the market, obviously, there's different people and there are lots of consolidators in the market, but you see different people at different sort of sizes, different people in different geographies.

Gordon Aitken
Founder & Managing Director at Aitken Advisory Limited

So I'm guessing someone like Phoenix would not be interested in HSBC Life because it's just simply not going to shift the dial for them. So maybe if you can talk about just actually how my sense is maybe it's not as competitive as we think it is in the areas you're trying to hit. And second question on price. I mean 85% of own funds. Mean if you go back in time, Caudrillard did his deals that was talked about sort of 70% of embedded value.

Gordon Aitken
Founder & Managing Director at Aitken Advisory Limited

I mean you've been in this game a long time. And maybe talk about how pricing changed over those twenty years. Is it tighter or whatever relative to then? And just finally on we've been talking about banks, UK banks selling their insurance subsidiaries for years. And it's always seems to have taken longer than we thought.

Gordon Aitken
Founder & Managing Director at Aitken Advisory Limited

What would like maybe you can talk about why you think that is? And maybe what was the trigger for HSBC to sell their business now to you?

Steve Murray
Steve Murray
Group CEO & Executive Director at Chesnara

Yes. I'll take them in that order, Gordon. So in terms of the competition, so you're right. I think when I so when I joined Chesnarra sort of four years ago, one of the things that I was concerned about was competition for the submid sized deals, so the sort of 100,000,150 million to £500,000,000 sort of deals because I'd just come from Royal London, who had been outbid by Bain Capital for on the LV deal. And the pricing of that for me at the time looked quite punchy and certainly well above the sort of multiples that we were sort of talking about there.

Steve Murray
Steve Murray
Group CEO & Executive Director at Chesnara

And I was concerned that there might be sort of private capital strategic private capital that was coming in and was going to be prepared to pay material premiums book. We haven't seen that come through in this space. I know we've seen a little bit more of that coming through in the PRT space. And alongside that, we've actually seen some of the people that would have been more active on books of business in the market shift their strategies away. So if I compare sort of competition now to four years ago, it's definitely less.

Steve Murray
Steve Murray
Group CEO & Executive Director at Chesnara

And I think what you're also seeing from vendors is, of course, they want a good price, but execution certainty is incredibly important, not least because we've seen at least two aborted processes in Europe and some challenges with regulators and things like that. So I think those things play to our strengths because I think we've been good executors of deals. If you look over the last twenty years, this is our fifteenth acquisition, HSBC Life that we've announced, 14 that completed. And when we've come out and said we're going to do deals, we've been we've followed through and done what we said we would do around that. In terms of sort of who we're competing against, it will depend at times.

Steve Murray
Steve Murray
Group CEO & Executive Director at Chesnara

So for the smaller deals, we will still see some of the mutuals sort of turning up on the pitch for that. I think for these sort of larger deals, quite often that's they don't have the capital resources to deploy there. So it will be some of the traditional names in the market. But in The UK, a number of them are very, very focused on that BPA space. So we in The UK, we think there's a little bit less sort of competition from some of the people that you would normally see.

Steve Murray
Steve Murray
Group CEO & Executive Director at Chesnara

If we think sort of broader Benelux, you've seen that very large sort of Iridium deal happening. I would expect them to be quite active, not just in Germany, but in adjacent territories. I think they've been quite clear that France is active. But if they can do Germany and France, why wouldn't they sort of provide support to sort of Benelux deals as well? But I think that's maybe a little bit further down the list for them.

Steve Murray
Steve Murray
Group CEO & Executive Director at Chesnara

I think we'll continue to see ASR as an acquirer of books. But in the same way as you talked about Phoenix, if you listen to where their focus is, firstly, they do want to do more PRT, and I think they'd like to do some larger deals as well. So there's nothing within the competitive environment where we're and saying, goodness me, there's somebody there that we don't think we can compete against. And I think that does flow through then into pricing where we've probably seen three years ago pricing being sort of higher, starting to get higher than I'd be comfortable with. When we look at the pricing for HSBC, we think that's very competitive with sort of historic levels.

Steve Murray
Steve Murray
Group CEO & Executive Director at Chesnara

I think when Tom and I talked on the Thursday, July 3, we also pointed out as well that above and beyond the eligible loan funds, there are other Tier three assets that are accessible to us as part of that deal that we can generate value from as well, which is why we believe the sort of multiple that we've acquired at is very attractive for us. We've probably moved from sort of Clive's days where he was the first sort of person entering into that market. So I don't think we're going to return to a sort of world where you're seeing sort of 0.5, 0.6 for larger businesses. But if you look at some of the multiples that you could apply for some of the smaller deals that we have, we picked up books at far lower multiples than that because of our return on capital requirements. So why aren't I suppose your question was why aren't people selling things more quickly, particularly banks?

Steve Murray
Steve Murray
Group CEO & Executive Director at Chesnara

I suppose our experience, talked about this sort of at one of our results last year, is that these organizations have a huge number of priorities on their list. So I think sometimes these things just don't get on to the priority list and maybe driving new business and distribution becomes more important. I think the difference that happened with HSBC, and they've been very public with this, there was a change in Chief Executive and he was very definitive about where he was going to be and where he wasn't going to be in the market. And that's been driven top down through the organization. So he was clear and they were clear with us that they no longer saw sort of UK insurance as being a space that they wanted to play in and that drove that.

Steve Murray
Steve Murray
Group CEO & Executive Director at Chesnara

You don't always see that in other sort of large financial institutions. They quite like keeping that optionality there in case there's a big shift in the market that they need to react to. We're not big enough to have 20 strategic priorities. We've got three and we keep focused on those and try and delivering. So sometimes it's hard for us to understand why you would have 40 strategic priorities, but if you're a large organization, of course, you can. Barry?

Barrie Cornes
MD & Head of Research at Panmure Liberum

It's Barry Korns, panioliberum for at least the rest of today. Steve, when some of us are looking further ahead now, I wondered if you could paint a picture for us as to what Chesnau will look like maybe in five years' time, be it locations, type of business, size of the company. Just give us a picture as where you think realistically it might be in five years' time, please? Thank you.

Steve Murray
Steve Murray
Group CEO & Executive Director at Chesnara

Yes. So I would be disappointed if we aren't a far larger organization, and that's not because we need to be big to puff our chest out and say we're big. That's more because of the pipeline, the opportunity, the capability that we've brought in. We're now in the FTSE two fifty for the first time ever, which is a nice step up, but our ambition is certainly broader than that. So based on what we're seeing, I would certainly hope, and this is the conversation that Tom and I have been having regularly, including yesterday with the Board, that there are some very attractive growth opportunities.

Steve Murray
Steve Murray
Group CEO & Executive Director at Chesnara

Looking where we are now, I could imagine that you may see us in another territory as well. I think there are some interesting opportunities there, so I certainly wouldn't rule that out. But we're focused on making sure that we can take advantage of the opportunity in front of us because we have good paper capability. Think some of the people that we've brought into the organization are doing a terrific job. We've got the financial firepower capacity.

Steve Murray
Steve Murray
Group CEO & Executive Director at Chesnara

We've been so pleased with the support that we've had from investors, both for the rights issue and also the RT1 bond. So I think that gives us a very good foundation to drive forward from. So we're certainly not finished here. We've only just got started would be the would be message I'd be given even if it's taken me four years to get to

Barrie Cornes
MD & Head of Research at Panmure Liberum

where we are now. Okay. Thank you. Well done. Michael?

Michael Huttner
Insurance Analyst at Berenberg

So you referred to SS, so I was at the lovely lunch last week and it's not a hint, it's not a hint, but if you do a lunch, it would be very nice. So what Joss was saying is, a, he saw some opportunities around Athora if Athora focuses on PICC and is effectively moving a little bit out of Netherlands. I just wondered if that's one of the things. Separately, ETIAS, which is the Belgian thing, is maybe put on for sale in Belgium. And here, there's so many moving parts.

Michael Huttner
Insurance Analyst at Berenberg

It will there's clearly going to be stuff coming out, including, ASR said, they were thinking that Allianz might sell out to Belgium. And then the third thing is just on the numbers going forward, could you remind us I was really puzzled, and I'm sorry, I've forgotten, how much do we add to cash for each of next five years? That would be really helpful.

Steve Murray
Steve Murray
Group CEO & Executive Director at Chesnara

That's it. Do want to take the last one? Why don't you take the last one first, yes?

Tom Howard
Tom Howard
CFO & Executive Director at Chesnara

Mike, I'm really going to disappoint you, my answer, Michael. Sorry. So look, we've not issued forward guidance on an annualized basis on the cash sense. So I mean you've seen the pro formas in terms of the balance sheet. We've also issued guidance around the incremental impact of the HSBC deal.

Tom Howard
Tom Howard
CFO & Executive Director at Chesnara

So for the moment, so I think that's the guidance you should take.

Michael Huttner
Insurance Analyst at Berenberg

It was just it wasn't trying to ask something you haven't said. It's just to remind me that the 40,000,000, is that the annual figure that you published coming from these next five years? I was trying to square it with you.

Steve Murray
Steve Murray
Group CEO & Executive Director at Chesnara

I think what we've said, we have the future areas of cash generation. And previously, we sort of gave it I think we used to give it like we previously gave it a total of dividends and sorry.

Tom Howard
Tom Howard
CFO & Executive Director at Chesnara

Yes. So yes, so we have switched to making that more of an illustrative presentation rather than a projection. The reason for that actually is I think a number of the questions that people like you, Michael, actually were asking in recent years was around the sustainability of the dividends near term. And I think actually what we've really demonstrated over the last couple of years is that, that concern has dissipated.

Tom Howard
Tom Howard
CFO & Executive Director at Chesnara

We've been able to demonstrate, I think, very, very clearly over the last couple of years and even before that, that actually the long term portfolio cash generation is real. It extends way far beyond five years. And I think actually what HSBC does in terms of cash flow profile is just add another layer of certainty around that. So what we really wanted to do was sort of move the focus away from saying, well, what does the cumulative next five years look like? Because when we're sitting down thinking about M and A opportunities, when we're talking to the Board about our business plan, we've got a twenty, twenty five year plus time horizon for the business now.

Steve Murray
Steve Murray
Group CEO & Executive Director at Chesnara

So as a general comment on markets, I mean, really like the fact that the market is active in the way that you've been describing. I think there's a lot going on. And I think when you see some of these big strategic moves, for us, that potentially opens up opportunities for us to have conversations, particularly around assets that maybe before we didn't think we're going to be available. So I think when you see there's a couple of trends. I think when you see the development of the PRT market further in The UK and in The Netherlands, I think that potentially means that you may see other portfolios becoming available as part of that or some options there for us.

Steve Murray
Steve Murray
Group CEO & Executive Director at Chesnara

And I think if as I say, I think we're continuing to see and many of you have written about it, management teams that are being more discerning about the things that they have in their business and taking positive action, I think tend to get rewarded. Aviva are a great example of that. So we are certainly seeing the opportunity to have lots of good conversations with bigger financial services groups about businesses, entities that might be sitting in there that could be attractive for us. There's also some sort of post Brexit activity. I think there's some temporary structures that were put in by sort of U.

Steve Murray
Steve Murray
Group CEO & Executive Director at Chesnara

K. And European insurers to quickly get sort of Brexit compliant, where either people will need to recommit to those businesses, drive them forward or find a solution. So that would be something else that, again, we think is a bit of a thematic that could be interesting for us. So we're not short of opportunities to be considering that, that's for sure. Abid?

Abid Hussain
Equity Analyst - MD & Head - Insurance Coverage at Panmure Liberum

Just a follow-up on the dividend point. Have you talked to how long the pro form a book of business will cover the dividend? How long will the cash flows will cover the dividend? On my numbers, it seems well beyond clearly well beyond five years. Have you sort of put a number out there?

Tom Howard
Tom Howard
CFO & Executive Director at Chesnara

So we've not put a number out there. But as you can imagine, as part of the assessment of of the M and A opportunity itself and also then as part of the annual planning process that we go through at the board, that's something that we look at very, very closely. So, you know, one of the one of the the really attractive aspects of the HSBC deal was the longevity of that cash flow profile. So we talked about the fact that, okay, the 140,000,000 in the first five years is great. I'm a little bit more excited by the $660,000,000 post five years, to be honest, because that illustrates to you that, you know, that portfolio length.

Tom Howard
Tom Howard
CFO & Executive Director at Chesnara

So no, we're not going to issue sort of a half life number, if that makes sense. But, you know, hopefully, that gives you a sense that, you know, that puts any concerns that people might have had around the longevity of the portfolio to rest.

Steve Murray
Steve Murray
Group CEO & Executive Director at Chesnara

Melissa and then Ming.

Larissa van Deventer
Larissa van Deventer
Equity Research Analyst at Barclays

You. Actually, just a follow-up question on the dividend as well. On Slide six, you say that the final FY 2025 and interim FY 2026 dividend is expected to increase by 6%. Is that on a per share basis or the total quantum of the dividend?

Steve Murray
Steve Murray
Group CEO & Executive Director at Chesnara

That's for you, Tom. I can't remember what that basis was. If we can't find it, we'll tell you afterwards, Alrisa.

Larissa van Deventer
Larissa van Deventer
Equity Research Analyst at Barclays

Thank you very much.

Tom Howard
Tom Howard
CFO & Executive Director at Chesnara

Yes. So that is on a per share basis, and it's adjusted for the to allow for the bonus factor in the rights issue.

Larissa van Deventer
Larissa van Deventer
Equity Research Analyst at Barclays

That was going to be the next question. Thank you very much.

Steve Murray
Steve Murray
Group CEO & Executive Director at Chesnara

And Ming?

Analyst

Just two questions, please, and one comment. I need to keep the comment long. And the first question is on M and A. And I was hoping I don't need to ask anything about M and A for at least another eighteen months, but you had a comment earlier that you straight went out looking for sort of in talks on that Monday after Friday. So that kind of stressed me out a bit.

Analyst

And you have a comment there that further M and A, you are hoping not to sort of tap into the equity market. And but my question is, what happen if you come across another deal as good as HSBC or even better but bigger? What would you do? So that's my first question. And my second question is a follow on with your comment from Barry.

Analyst

You mentioned that your ambition is my take is more than FTSE two fifty, but the upper limit market cap for the FTSE two fifty is about JPY 4,000,000,000. So that kind of stressed me out again. And could you just provide a little bit of color on that, please? And my third one is just really a comment. Well done on the deal, and the timing is great.

Analyst

We waited nine years for this kind of deal. And you done it when I'm an investor rather than analyst. So thank you very much for that. And most importantly, you've done a deal before the retirement of the nicest insurance analyst bracket, not necessarily the best, which he's fully aware of. So I'm going to pass the mic on to the best insurance analyst, Ben Cohen, for the retirement speech.

Ben Cohen
Ben Cohen
Director at RBC Capital Markets

Sorry, Steve, I think you answered first.

Steve Murray
Steve Murray
Group CEO & Executive Director at Chesnara

Yes. So don't be stressed. So I think it's important so if you remember, the way that we're structured as a group is quite helpful when you think about this. So I think we've been clear, we'd be very, very careful about anything else that we're going to do in The UK in the short term, particularly if it meant that we were looking at a sort of migration that would cut across what we're planning to do with HSBC Life UK. But quite often, what you find is from sort of initiation through diligence, signing, change of control, that can be at least a sort of twelve month process.

Steve Murray
Steve Murray
Group CEO & Executive Director at Chesnara

So I think it's right that we continue to look at The UK market, look at opportunities, but that we're obviously very, very careful about anything that we would do that would disrupt that sort of migration and completion. So some of the activity I would expect that we'll be doing in The UK is more about early assessment versus sort of doing be sort of signing something imminently that would interfere with the HSPCLIFE UK migration. In Europe, it's different. We have the operational capacity available now in both of the businesses that we have to bring in books if we found the right opportunities. And if it was a new territory, say, with an operation that was sort of stand alone, again, that doesn't put there's no sort of operational contention there with what we're doing in The UK.

Steve Murray
Steve Murray
Group CEO & Executive Director at Chesnara

And for the central team, we do have the capacity to both oversee what we're doing with the next stage of HCP Life UK and also be assessing and working on M and A opportunities as well. So that's part of the investment we've made in the team. We do have a few more people now than we did in the past to do that. In terms of the growth ambition, I haven't actually looked at the what the number is at the top of the FTSE two fifty. But our ambition is to grow.

Steve Murray
Steve Murray
Group CEO & Executive Director at Chesnara

And it's I suppose what I was trying to convey is the size of the opportunity that's available to us. It's important that we get after that and we don't sort of rest on our laurels and we're progressive from a strategy perspective. Where that ends up in terms of a number, we'll see where we get to and we'll remain disciplined on M and A. But hopefully, what you've seen from us over the last twenty years, I would say, particularly over the last four, is that we've been disciplined, but we've deployed capital well and the metabolic rate sort of increased, and that's what we're planning to do going forward. So again, don't be stressed.

Steve Murray
Steve Murray
Group CEO & Executive Director at Chesnara

We'll look at these things prudently in the right way, but there's a big growth opportunity for us here. So I think we'll hand over to Ben. Just before handing over to Ben, Barry, it is your last day. You were very kind to me when I joined Chesnarra. It was great to get the benefit of your insight.

Steve Murray
Steve Murray
Group CEO & Executive Director at Chesnara

I know many people across Chesnarra have really appreciated the support that you've given the candor and particularly the headlines on the analyst reports, which are sort of more The Sun than The Telegraph in my mind in terms of where I would put those. But let's hand over to Ben, who'll say a few words that will be more eloquent than mine.

Ben Cohen
Ben Cohen
Director at RBC Capital Markets

Thanks very much. I feel like I'm part of a tribute band here. Not everyone here will know that September 15 marks forty years to the day that Barry started out in the city as a fresh faced trainee at the Royal Insurance. I think I first met him when he had moved a step closer into research as Investor Relations at Royal and Sun Alliance. But my abiding memory is many years later when Aviva had invited analysts for a driving day North Of London.

Ben Cohen
Ben Cohen
Director at RBC Capital Markets

As the assembled piled onto a coach to take us to the track outside the hotel we were based, we looked around to see Barry waving to us from his racing green Lotus Esprit. I think and I'm sure he did very well at the race at the racing too. He went on to have a very successful career well liked by competitors, colleagues and companies alike. Now he has finally finished paying off an epic house rebuild. He will be laying down his analyst gloves shortly.

Ben Cohen
Ben Cohen
Director at RBC Capital Markets

And I'm sure you will join me in wishing Barry a happy, healthy and long retirement.

Barrie Cornes
MD & Head of Research at Panmure Liberum

Thank Ben. Thank you very much, Ben. I really appreciate it. I've had forty years being an analyst, mostly twenty five years an analyst, and the other fifteen working in insurance. It's been great.

Barrie Cornes
MD & Head of Research at Panmure Liberum

I've been able to follow some fantastic companies just like Chesnarra, which has been a complete privilege. But thank you very much. I very much enjoyed my time. Thanks, Pavel.

Steve Murray
Steve Murray
Group CEO & Executive Director at Chesnara

Well, I can't think of a better way to end the presentation. Thank you all for joining us as we've shown you this strong set of results. There's a lot to look forward to here at Chesnarra. Enjoy the rest of your day. Thank you.

Executives
    • Steve Murray
      Steve Murray
      Group CEO & Executive Director
    • Tom Howard
      Tom Howard
      CFO & Executive Director
Analysts
    • Abid Hussain
      Equity Analyst - MD & Head - Insurance Coverage at Panmure Liberum
    • Larissa van Deventer
      Equity Research Analyst at Barclays
    • Michael Huttner
      Insurance Analyst at Berenberg
    • Analyst
    • Andreas van Embden
      Research Analyst - Insurance at Peel Hunt
    • Gordon Aitken
      Founder & Managing Director at Aitken Advisory Limited
    • Barrie Cornes
      MD & Head of Research at Panmure Liberum
    • Ben Cohen
      Director at RBC Capital Markets
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