Chesnara Plc · LSE:CSN
Chesnara — Debt Investor Presentation (July 2025)
37 slides from Chesnara's debt investor presentation, Jul 28, 2025
Slide 1: RT1 GBP Bond Offering
CHESNARA RT1 GBP BOND OFFERING Continued strategic delivery driving growth in cash generation and future value 28 JULY 2025
Slide 2: Disclaimer (1/2)
DISCLAIMER (1/2) NOT FOR DISTRIBUTION IN OR INTO THE UNITED STATES OR TO ANY U.S. PERSON IMPORTANT: You must read the following before continuing. The following applies to the presentation materials contained in this document (this “Presentation”, which term shall also include any statements made at
Slide 3: Disclaimer (2/2)
DISCLAIMER (2/2) OTHER OFFER RESTRICTIONS (CONTINUED) United Kingdom. This Presentation is being distributed only to and directed only at (i) persons who are outside the UK, or (ii) persons in the UK who are not retail investors or retail clients (each as defined above) and are (a) persons who have
Slide 4: Table of Contents
TABLE OF CONTENTS 1 Introduction to Chesnara and Key Credit Strengths 2 Acquisition Overview: HSBC Life (UK) 3 RT1 Transaction: Rationale & Overview 4 Appendices 4
Slide 5: Introduction to Chesnara & Key Credit Strengths
INTRODUCTION TO CHESNARA & KEY CREDIT STRENGTHS
Slide 6: Chesnara Background
CHESNARA BACKGROUND WHO WE ARE KEY FINANCIAL METRICS OUR STRATEGIC PLAN 1 Chesnara plc was formed in 2004 and is listed Pro Forma Post HSBC Life MAXIMISE THE VALUE (UK) Acquisition FROM EXISTING BUSINESS on the London Stock Exchange. Group Solvency II Ratio: 169% Efficient management of existing cus
Slide 7: Key Strengths of the Chesnara Credit Story
KEY STRENGTHS OF THE CHESNARA CREDIT STORY SUSTAINABLE, LONG-TERM CASH GENERATION • History of cash generation from efficient administration of unit-linked and protection policies, with limited exposure to policies with interest rate guarantees 1 • Conservative investment strategy for own account in
Slide 8: Chesnara has been actively acquiring in recent years
CHESNARA HAS BEEN ACTIVELY ACQUIRING IN RECENT YEARS AND HAS LAID THE FOUNDATIONS FOR FURTHER GROWTH APRIL 2022 JAN 2023 DEC 2024 JUL 2025 6 ACQUISITIONS CASLP Conservatrix Canada Life HSBC NEXT STEPS SINCE 2022 Robein Leven onshore Life (UK) ▪ Completion of HSBC Life bond and pension (UK) acquisiti
Slide 9: Continued Strong M&A Pipeline
CONTINUED STRONG M&A PIPELINE KEY DRIVERS FOR M&A ACTIVITY: 1 Operational simplification and expense pressure 2 Disposals of non-core products to release capital 3 Focus on specific geographies CURRENT COMPETITIVE ENVIRONMENT: Chesnara is well positioned for transactions, given both increased regula
Slide 10: Acquisition Overview: HSBC Life (UK)
ACQUISTION OVERVIEW: HSBC LIFE (UK)
Slide 11: Acquisition Accelerates Chesnara's Strategy
ACQUISITION ACCELERATES CHESNARA’S STRATEGY Chesnara has HSBC Life (UK) Chesnara has Multiple value Chesnara the capacity, is a high-quality significant levers including retains balance capability and business experience in all expense sheet strength reputation to acquired at an of HSBC Life efficie
Slide 12: A Compelling Value-Accretive Transaction
A COMPELLING VALUE-ACCRETIVE TRANSACTION INCREASED CASH GENERATION o Expected incremental lifetime cash generation of >£800m(3), >3x consideration of £260m(4) MAINTAIN BALANCE SHEET o Solvency II ratio to remain above normal range of 140% - 160% STRENGTH AND RESILIENCE o Leverage ratio in line with
Slide 13: HSBC Life (UK) is an attractive business offering complementary products
HSBC LIFE (UK) IS AN ATTRACTIVE BUSINESS OFFERING HIGHLY COMPLEMENTARY PRODUCTS HSBC Life (UK) is a specialist investment bond and life protection provider in the UK OVERVIEW OF HSBC LIFE (UK) HSBC LIFE (UK) KEY METRICS (Dec 2024) NUMBER OF POLICIES BY PRODUCT TYPE £314m Eligible Own Funds(5) 5% o C
Slide 14: Strengthening Our Existing Business
STRENGTHENING OUR EXISTING BUSINESS Chesnara HSBC Life (UK) Pro-Forma Chesnara Dec-24 Dec-24 Dec-24 AUA BY GEOGRAPHY 21% 16% UK Increases scale in 42% Sweden £14bn £4bn £18bn the UK 55% 29% Netherlands 37% 100% AUA BY PRODUCTS 14% 6% 11% Maintains our focus on Unit-linked (2) £14bn £4bn £18bn managi
Slide 15: HSBC Life (UK) will drive increased cash generation and value creation
HSBC LIFE (UK) WILL DRIVE INCREASED CASH GENERATION AND VALUE CREATION A B C ROBUST BALANCE SHEET FUTURE VALUE INCREASED CASH GENERATION(3) OPTIMISED THROUGH CREATION BY FINANCING MIX MULTIPLE LEVERS Cash Generation from acquisition £260m Expense and capital consideration financed through a synergie
Slide 16: Increased Cash Generation
A INCREASED CASH GENERATION NEXT 5 YEARS CASH GENERATION OVERVIEW TRANSACTION IMPACT o HSBC Life (UK) is expected to add in excess of £800 million of lifetime cash generation(3) >£140m(3) • Achieved through delivery of future profits and run off of capital requirements • Materially increases the gro
Slide 17: Financing Structure Retains Balance Sheet Strength
B FINANCING STRUCTURE RETAINS BALANCE SHEET STRENGTH Financing structure consistent with existing framework and provides firepower for further M&A FINANCING STRUCTURE FINANCIAL CONSIDERATIONS Existing cash - £55m Drawdown on RCF - £65m Solvency Remain above Solvency II operating o Drawdown of £65m u
Slide 18: Robust Balance Sheet Maintained
B ROBUST BALANCE SHEET MAINTAINED SOLVENCY LEVERAGE(12) o Estimated Group solvency coverage of 169% (Dec-24 pro-forma) o Estimated Group leverage of 29% (Dec-24 pro-forma) o Above our Group’s operating range of 140% - 160% o Leverage ratio would reduce further following repayment of the o Robust cap
Slide 19: Future Value Creation Through Multiple Levers
C FUTURE VALUE CREATION THROUGH MULTIPLE LEVERS 1 2 3 TARGET OPERATING MANAGEMENT ACTIONS AND NEW BUSINESS MODEL AND EXPENSE CAPITAL SYNERGIES SAVINGS DRIVING ADDITIONAL VALUATION CREATION o Transfer to a more efficient o Further value enhancing o Potential for additional value operating model with
Slide 20: RT1 Transaction: Rationale & Overview
RT1 TRANSACTION: RATIONALE & OVERVIEW
Slide 21: RT1 Transaction Rationale & Investment Thesis
RT1 TRANSACTION RATIONALE & INVESTMENT THESIS • Inaugural RT1 transaction from Chesnara plc • Proposed issue of GBP denominated Fixed Rate Reset Perpetual Restricted Tier 1 Contingent Convertible Notes • Envisaged £150m transaction size Summary • PerpNC5.5 structure, including a 6-month par call pri
Slide 22: Flexible to execute future M&A using cash, debt and equity
WE REMAIN FLEXIBLE TO EXECUTE FUTURE M&A USING EXISTING CASH, EXTERNAL DEBT AND EQUITY RAISE FINANCIAL CONSIDERATIONS Solvency Leverage A B Operating range Maintain our investment of 140% to 160% grade rating Investment grade rating important Equity financing from shareholders, for accessing debt ca
Slide 23: Strong Capital Management
STRONG CAPITAL MANAGEMENT SII ratio: 169% SII ratio: o Board approved internal ladder of intervention below 140% 205% with increased frequency of solvency monitoring and SII ratio: Surplus: Operating consideration of recovery actions as appropriate 203% £361m Solvency II ratio range 140-160% o Capit
Slide 24: Substantial Headroom Above Requirements
SUBSTANTIAL HEADROOM ABOVE REQUIREMENTS Substantial Headroom to RT1 Trigger Events(14) • It is the Issuer’s intention SCR Trigger MCR Trigger(21) SCR Breach Unresolved that, whenever exercising its discretion Eligible own funds equal to or less Eligible own funds equal to or less Eligible own funds
Slide 25: Summary Terms of the Offering (1/2)
SUMMARY TERMS OF THE OFFERING (1/2) The summary terms below are indicative only and subject to amendment and completion. This summary is qualified in its entirety by, and must be read together with, the full ‘Terms and Conditions of the Notes’ as set out in the Preliminary Offering Memorandum prepar
Slide 26: Summary Terms of the Offering (2/2)
SUMMARY TERMS OF THE OFFERING (2/2) At par at any time (subject in each case to the Redemption and Purchase Conditions) if (i) a Tax Event, Capital Disqualification Event or Ratings Methodology Event has occurred and is continuing (or Special Redemption Events if a Capital Disqualification Event or
Slide 27: Structural Comparison with Selected RT1 Transactions
STRUCTURAL COMPARISON WITH SELECTED RT1 TRANSACTIONS) Chesnara plc Aviva plc Utmost Group plc Rothesay Life Plc Bupa Finance plc £[150]m PNC5.5RT1 £500m PNC8 RT1 £300m PNC7.5 RT1 £450m PNC10.5 RT1 £300m PNC10.5 RT1 Issue Date [TBD] Mar-25 Jan-22 Oct-21 Sep-21 Issue Ratings(19) - / - / BBB- (expected
Slide 28: Strong 'A-' Long-Term Issuer Default Rating by Fitch
STRONG ‘A-’ LONG-TERM ISSUER DEFAULT RATING BY FITCH Chesnara Credit Ratings(20) Entity Fitch Rating Category Rating Outlook Date Affirmed Chesnara plc Long Term IDR A- Stable 10 July 2025 Countrywide Assured plc Insurer Financial Strength A Stable 10 July 2025 Instrument Nominal Coupon Issue Date R
Slide 29: Key Strengths of the Chesnara Credit Story
KEY STRENGTHS OF THE CHESNARA CREDIT STORY SUSTAINABLE, LONG-TERM CASH GENERATION • History of cash generation from efficient administration of unit-linked and protection policies, with limited exposure to policies with interest rate guarantees 1 • Conservative investment strategy for own account in
Slide 30: Appendices
APPENDICES
Slide 31: Sustainability
SUSTAINABILITY We are committed to becoming a sustainable Group and net zero by 2050 OUR SUSTAINABILITY COMMITMENTS: OUR GOALS: OUR 2024 DELIVERY: Published our interim financed emissions reductions targets 1 NET ZERO Continued to develop our initial transaction plan Support a EMISSIONS BY sustainab
Slide 32: Non-Linked Assets (FY24)
NON-LINKED ASSETS (FY24) Portfolio Bond portfolio by Corporate bonds by Sovereign debt by breakdown rating industry location 0.1 1% 6% 2% 0.1 16% 19% 3% 0.4 22% 25% 8% Total non-linked Total value of 45% 10% Total value of Total value of assets of £1.9bn bonds (government corporate issued government
Slide 33: Solvency II Sensitivities (FY 2024)
SOLVENCY II SENSITIVITIES (FY 2024) Solvency Solvency surplus immediate impact % impact (80) (60) (40) (20) - 20 40 60 80 20% sterling appreciation +34pp 1 20% sterling depreciation -12pp 25% equity fall +6pp 25% equity rise -5pp 2 10% equity fall +3pp 10% equity rise -2pp 1% interest rate rise +6pp
Slide 34: Solvency II Sensitivities (FY 2024) - Continued
SOLVENCY II SENSITIVITIES (FY 2024) - CONTINUED EXPLANATORY NOTES ON THE SENSITIVITIES ON THE PREVIOUS SLIDE ARE PROVIDED BELOW: Foreign Exchange: Appreciation of sterling relative to our overseas currencies reduces the value of overseas surplus with partial mitigation from the Group 1 currency hedg
Slide 35: Footnotes
FOOTNOTES SUMMARY OF FOOTNOTES USED THROUGHOUT THE PRESENTATION (1) Geographical split for UK includes other Group activities 2024, see accounts for a definition (2) Split based on AuA as at 31 December 2024 excluding the pro forma AuA from the second Canada Life portfolio acquisition announced in D
Slide 36: Glossary
GLOSSARY TERM DEFINITION AuA Assets under Administration This represents the operational cash that has been generated in the period. The cash generating capacity of the Group is largely a function of the movement in the solvency position of Cash generation the insurance subsidiaries within the Group
Slide 37: Thank You
Chesnara THANK YOU