Takeover target Fidelity Life has reported a 63% increase net profit after tax to $NZ16.9 million ($12.9 million) for the year ending June 30.

This compares with a $NZ10.3 million ($7.87 million) profit for the 2009 financial year.

Fidelity Life’s annual report, released last week, says life insurance premium revenue rose by 7% from $NZ75.4 million ($57.5 million) in the 2009 financial year to $NZ80.7 million ($61.6 million) for the past financial year.

But premiums passed to reinsurers rose from $NZ20 million ($15.2 million) in 2009 to $NZ29.1 million ($22.2 million) as the insurer transferred a greater proportion of the claims risk.

The company paid out 176 death and terminal illness claims during the year totalling $26.4 million ($20.1 million), of which reinsurance recovered $NZ19.6 million ($15 million). The youngest claimant was 24 while the oldest was 90.

Chairman Ian Braddock says the expenses increased mainly due to Fidelity Life recruiting more staff to handle the increased volumes of new business in both insurance and its investment divisions.  

But he says the past 12 months has seen a turnaround for the company with strong premium inflows together with improved investment returns.