March 31, 2016 / 6:32 AM / 4 years ago

Chesnara's full-year profit jumps on Dutch acquisition

(Reuters) - Chesnara Plc (CSN.L), an insurance-focused takeover specialist, reported a nearly 50 percent rise in full-year pretax profit, helped by its acquisition of Dutch company Waard Group last year.

Chesnara, which mainly buys life insurance funds closed to new customers, said IFRS pretax profit rose to 42.8 million pounds ($61.3 million) 2015, from 28.8 million pounds a year earlier.

On the new European capital rules for insurers that came into effect in January, Chesnara said its Solvency II ratio was 146 percent. A ratio of 100 percent means that an insurer has set aside enough capital to meet underwriting, investment and operational risks.

Gross cash generation rose to 44.2 million pounds in the year from 42.6 million pounds a year earlier. The acquisition of the Waard Group added a further 39.9 million pounds of cash, Chesnara said.

The company said it was continuing to examine “value-enhancing opportunities” in the UK and Netherlands.

Britain’s financial watchdog is investigating six insurance firms, including Chesnara-ownded Countrywide Assured, over their treatment of long-time life insurance customers.

The FCA has been monitoring whether insurers have treated customers locked into pension and other savings plans fairly compared with new customers.

Chesnara said on Thursday that the broader review could result in the need for changes to processes and customer communications.

The company said there would be a cost for “any such industry-enhancement programme”, but added that it did not expect a material impact on its financial model.

Reporting by Noor Zainab Hussain in Bengaluru; Editing by Gopakumar Warrier

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