New Zealand's Sovereign Insurance reported a 13 percent fall in annual profit after experiencing a significant increase in claims, particularly in its first half, Commonwealth Bank of Australia (CBA) said.Sovereign is part of the ASB Group, which is owned
New Zealand's Sovereign Insurance reported a 13 percent fall in annual profit after experiencing a significant increase in claims, particularly in its first half, Commonwealth Bank of Australia (CBA) said.
Sovereign is part of the ASB Group, which is owned by CBA.
CBA said Sovereign reported a 13 percent fall in net profit after tax to $NZ103 million in the year to June 30 from a year ago.
This was due to a significant increase in health, trauma and disability claims, particularly in the first half.
The insurer also had a one-off $NZ18m gain in the second half due to a revaluation of deferred tax on policy liabilities as a result in the drop of the corporate tax rate in New Zealand to 28 percent on July 1 next year. The insurer also had a valuation gain last year on policy liabilities, driven by lower New Zealand bond rates.
The profit after tax in the six months to June 30 was $NZ76m, up from $NZ27m in the first half.
Inforce premiums, or paid up premiums, increased by 7 percent. CBA said Sovereign had 31 percent of the New Zealand market as at March 31.
Despite a fall in share of new business sales to 27 percent Sovereign continued to lead the market in new business sales, CBA said.
Sovereign provides personal and business life insurance, health insurance, home loan, investment and superannuation products to more than 650,000 customers In New Zealand, according to its website.
Sovereign insures the lives of more New Zealanders than anyone else and is also the biggest provider of home loans outside of the four major banks and one of the top three health insurers.
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