11 AUGUST 2004
Sovereign Performs Strongly In Difficult Market
Statement made by Simon Swanson, Managing Director, Sovereign
Healthy profit contributions from our three main areas of operation enabled financial services company Sovereign to lift
after tax appraisal value profit by 71% to $124.9 million for the financial year ending 30 June 2004. Sovereign’s Margin
on Services Profit increased by 20% to $59.9m.
The combined effect was to produce strong profit growth and market share increases in a year that was challenging for
the life insurance and investment sectors.
During the 12 months we grew annual in-force premium by 5% to $550 million. This, combined with more effective claims
management, improved our profitability.
We shared in the growth being experienced by all home mortgage lenders, and during the year set a new record by settling
mortgages valued at $1.7 billion, an increase of 49%.
Home mortgage lending is now an integral part of the package of protection and savings solutions offered by brokers and
advisers.
Along with the industry, our investment operations in the form of lump sum investments and managed funds, struggled
against other investment options.
While our new lump sum investment income declined by 35% to $77 million, our funds under management held up well by
market standards and showed a modest 3% increase to $3.3 billion.
At present, the regular premium investments sector in which we operate is out of favour with investors.
A major contributor to this is undoubtedly the indecision the community has as to the most effective way to provide for
its retirement years.
Even though we are the market leader, our figures demonstrate that too few are prepared to commit to regular savings.
Industry statistics demonstrate this all too clearly and we continue to make this point in our representations to
decision makers.
While as a company we anticipate the current financial year to be another of steady growth, until there is a change of
policy that actively encourages people to save for their retirement years, we do not anticipate the community at large
moving to greater self-sufficiency.
ENDS