Acquisition, lapse focus drive strong underlying performance and capital position for Fidelity Life.

Media release

2 November 2022  

The first four months’ contribution of its recently acquired Westpac Life business, together with a favourable lapse performance, have helped Fidelity Life deliver an underlying profit of $25.7m for the year to 30 June 2022, up 14% on the previous year.*

In sharing its FY22 results with shareholders yesterday, Fidelity Life says its key financial metrics have risen across the board. Insurance premium revenue was up 21%, from $278.6m in FY21 to $338.3m in FY22; claims expenses grew 26%, from $130.7m in FY21 to $164.6m in FY22; and total assets increased 83%, from $642.7m in FY21, to $1,178.5m in FY22.

Chief Executive Melissa Cantell says FY22 was a ground-breaking year for Fidelity Life as the company balanced advancing its customer led transformation with navigating a complex external environment.

“Completing the Westpac Life deal in February 2022 was an historic transformation milestone for us, and we were delighted to welcome 150,000 new policyholders, 50 new team members and, of course, a new shareholder in Ngāi Tahu Holdings, to our whānau.

“The Westpac Life business, which we renamed Fidelity Insurance, came with a strong capital position and this, together with our proactive capital management approach, helped increase our excess solvency capital above minimum requirements from $61.2m last year to $174.8m (on a group basis) in FY22.”

The year was also notable for external factors outside the company’s control, says Melissa.

“Like most other New Zealand businesses, we faced a number of external challenges, including Covid lockdowns, volatile financial markets and growing inflation and living costs.

“In challenging times, we know how important it is to protect and nurture our existing customers. We’re proud of our teams’ efforts, working in tandem with our partners and advisers, to help customers manage their protection in tough times, resulting in a strong lapse performance and underlying profit.”

In other transformation highlights, Fidelity Life took its first serious steps on its sustainability journey, including new sponsorships of Outward Bound and Bellyful, and the achievement of Toitū carbonreduce certification.

Looking ahead, Melissa says she expects the pace of internal and external change to continue as Fidelity Life heads into its 50th anniversary year in 2023.

“A key focus will be progressing the transition and integration of Fidelity Insurance into Fidelity Life so we’re one business, focused on the needs of all our customers.

“We’ll also be advancing other important transformation projects, such as our new underwriting engine, and data and insights tools, as well as working on adapting to various new legislative regimes coming into effect over the next few years - not to mention facing into expected economic headwinds.

“2023 also marks 50 years since Gordon and Shirley Watson founded Fidelity Life. It’s a special reason to celebrate, reflect on how far we’ve come and look forward to the next 50.

“We’re here to make a lasting difference to the lives of more New Zealanders by closing the protection gap and helping New Zealand towards a more resilient and sustainable future.

“Our local shareholders – including the NZ Super Fund, Ngāi Tahu Holdings and the Fidelity Family Trust – have long term, multi-generational investment horizons and that gives us a mandate to think and act long term too, for the long term good of New Zealand.”

Fidelity Life’s 2022 annual report can be found below.

*Underlying profit is not a prescribed or audited measure under applicable accounting standards and may therefore not be directly comparable to underlying profit as reported by other similar entities. It is included to more accurately reflect year-on-year performance outside of those items which are one-off in nature or unrelated to the Group’s core business of providing insurance. Please refer to our 2022 annual report for more information.