FWD Group announces update to bond consent solicitation and publication of annual results

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DigitalCFO Newsroom | 28 February 2022

This bond consent process commenced on 17 June 2021 and aims to simplify the FWD Group corporate structure and streamline treasury functions

FWD Limited and FWD Group Limited – consolidated subsidiaries of FWD Group Holdings Limited (“FWD Group” or “the Company”) – announced updates and additional information, including full year 2021 results for FWD Group, within announcements made today to the Hong Kong Exchange (“HKEx”) in relation to their respective listed notes and perpetual securities.

This bond consent process commenced on 17 June 2021 and aims to simplify the FWD Group corporate structure and streamline treasury functions, with the consent of holders of the relevant securities which was received in July 2021. If implemented in full, FWD Group will substitute the current issuer (FWD Limited or FWD Group Limited) of the relevant securities.

Today’s announcement to bondholders outlined that FWD continues to actively take steps to ensure satisfaction of the settlement conditions and will provide a further update in due course on expected timing for satisfaction of the settlement conditions.

Holders were also presented with additional information on the financial performance of FWD Group, the entity which will be substituted as issuer for the securities if the proposals are implemented in full.

Founded in 2013, FWD Group operates in 10 markets across Asia, including seven of the region’s ten fastest-growing markets[1], with a focus on Southeast Asia. The Company’s legacy-light and digital-first model reaches over 10 million customers and has enabled it to record US$6.9 billion in total premiums[2] through the end of 2021.

As detailed in the filing, FWD Group continued to deliver strong organic growth in 2021, with the Value of New Business (“VNB”) reaching US$686 million, representing a 17% CAGR from 2019. VNB grew 28%[3] over the prior year period on an underlying basis. The Company also reported that its 2021 segmental adjusted operating profit before tax was US$205 million, a 64% increase, and that it has more than quadrupled compared to 2019.

Huynh Thanh Phong, Group Chief Executive Officer and Executive Director of FWD Group, said, “Our strong performance in 2021 – while navigating the COVID-19 pandemic – is a testament to our talented team, proven strategy and differentiated distribution platform that makes protection easy, accessible and affordable for our customers and communities who are at the heart of everything we do. We believe we are just scratching the surface of what FWD Group can deliver by changing the way people feel about insurance. We’re confident that our innovative products, which are tailored to the region’s rising middle classes and digitally-native people, will continue to play a critical role in addressing Asia’s significantly underserved life insurance market.”

FWD Group also noted in the filing that it raised a total of US$1.625 billion through its recent private placement after securing investments from Huatai Growth Focus Limited (“Huatai”) and ORIX Asia Capital Limited (“ORIX Asia Capital”) in January 2022. The private placements of Huatai and ORIX Asia Capital are in addition to the initial US$1.425 billion that FWD Group raised in December 2021 from certain global investors to support the Company’s growth plans, including Apollo, the Canada Pension Plan Investment Board, Li Ka Shing Foundation, Metro Pacific Investments Corporation, Pacific Century Group, The Siam Commercial Bank Public Company Limited and Swiss RE. 

FWD Group is using the private placement proceeds to further reduce leverage, with US$1.25 billion of debt repaid in 2021 and a further US$250 million repaid in January 2022.

The announcements are available on the HKEx’s website.

[1] Source: NMG report.

[2] Total premiums are measured in total weighted premium income (“TWPI”). TWPI, a non-IFRS measure, consists of 10% of single premiums, 100% of first year regular premiums and 100% of renewal premiums across all business lines, before reinsurance ceded, and includes deposits and contributions for contracts that are accounted for as deposits in accordance with our accounting policies.

[3] In constant exchange terms. Underlying definition excludes 2020 VNB relating to our relationship with TMB, which ceased in 2020 and a one-off retrocession reinsurance transaction in Japan in 2020.