Global savings provider Hansard has reported lower profits for its full year results (1 July 2018 to 30 June 2019).
While new business sales have grown to £155.9m ($192.5m, €176m) from £146.6m in 2018, profits after tax decreased to £4.6m from £6.8m, and underlying profit also fell to £6.1m from £8.6m in the previous year.
“A big chunk of that growth comes from the UAE where our strategic alliance with Union has really worked out well and we’re starting to get real traction in that market,” Gordon Marr, group chief executive for Hansard Global told International Adviser.
But the lower profits were mainly attributed to the insurer’s newly rolled out Japanese business, for which it received a licence in June 2019, and a “major IT project to replace our back office administration system and focus on cost efficiencies”, Marr said.
Eastern operations
The Japanese business was years in the making, he admitted.
“It took a lot of time and perseverance to achieve that.
“It is going to be a localised business with a brand new product pretty different to our traditional offerings.
“We would expect to be business at some point in the first quarter of the next calendar year.”
And technological developments have been underpinning the business model in the Asian country.
Graham Morrall, global sales and marketing director, told IA: “We are using our technology to reduce expenses and costs to the consumers by using technology.
“Our products will be distributed through regional banks, which is a departure from our approach around the rest of the world where we distribute through independent intermediaries of different sizes and in different territories.
“It’s a very local business. We have a system that will be taking Japanese characters at the front, in the middle and on the way out run, by a team of Japanese colleagues.”
Catching up
Hansard said that it is looking to roll out a range of products solely to the Japanese market, which may be expanded to other regions.
“[For] the product itself, there’s no new business strain as such, again very different to certainly our regular premium business,” Morrall added. “But it’s a very effective and scalable model.”
And technology is going to take centre stage.
That is because, although Japan is at the forefront of innovation, is still not at par with its use of technology, Tim Davies, chief financial officer told IA.
“The market there is possibly following trends that we’ve seen elsewhere such as the UK, where the distribution market is much more based on an annual remuneration model or fee-based model, and what we want to do is design our product to fit in with that trend.
“And that would clearly give us an opportunity to potentially grow that out on a broader basis in future years.”
Davies added that Hansard’s technological project is going to focus on back office procedures.
“We are going to spend quite a lot of money on it and we’ve spent quite a lot of money in Japan. We’re taking a long-term view, we are investing in our business and we’re doing it all with our own resources.”
Looking ahead
Morrell commented on the opening of Bahamas-based Hansard Worldwide at the end of 2018, to focus further on the Latin American market, deeming it a “seamless transformation”.
“Over this last year, we have done quite a lot of work to consolidate what we have and reorganise our business in terms of our distribution, and with the launch of Hansard Worldwide, we’ve seen the immediate benefit of that.
“The Latin American market is great for offshore business.”
While Hansard currently has its hands full with the Japanese arm, it is definitely not rolling out any future expansions.
“At this moment in time we’ve got so much on our plate, there’s nothing else we could actually execute even if we wanted to,” Marr added.
“But that does not mean we are not thinking about other opportunities and other ways of developing the business, but at this stage we are concentrating on what’s in front of us.”
