Reinet has always been criticised for its dependence on British American Tobacco (BAT), but last week's results show that their investment represents 52percent of the total value of Reinet. One year earlier it still represented more than 60percent. This was mainly due to the decrease in the share price of BAT, but Reinet also sold more shares. BAT continued its strong underlying performance; however, the market still reflects uncertainty in respect of the impact of the changes the industry is going through and anticipated regulatory developments. Reinet remains confident that it is an attractive long-term investment, and the current industry challenges will be appropriately managed.
Reinet’s investment in the UK insurer Pension Insurance Corporation represented 30percent of Reinet’s net asset value at March 31, 2019, compared to 25percent a year ago. This is thanks to a stellar performance, writing £7billion (R127.89bn) of new business in 2018 compared to £3.7bn the previous year. New business transactions include BHS, Siemens and Rentokil. According to Reinet, the outlook remains positive for Pension Corporation as it is very well placed to compete for the ever-increasing pipeline of business coming to market in the UK.
New business volume in 2019 to date has remained strong. Pension Insurance Corporation is a specialist insurer of UK defined benefit pension funds. They provide tailored pension insurance buyouts and buy-ins to the trustees and sponsors of UK defined benefit pension funds.
The overall value of the business, as measured under Market Consistent Embedded Value methodology, increased by 24percent in the year. Pension Insurance Corporation has considered the risks associated with Brexit, with appropriate controls in place to ensure that contractual relationships with various stakeholders continue to operate as intended post Brexit - including the ability to pay policyholders, and relationships with banking and reinsurance counter-parties.