Building Society Holdings (BSH) is now Heartland NZ Ltd (HNZ) so might as well start a new thread with the new name.
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Building Society Holdings (BSH) is now Heartland NZ Ltd (HNZ) so might as well start a new thread with the new name.
Seems the silk purse remains a sows ear........
Obviously ACC does not share the pessimistic view of the above posters as a SSH notice today says that they now own 5.64% of HNZ. Like me they see more of the "Promissed Land" to come.
As mentioned previously on the BSH thread, it will be interesting to see where reinvestment rates sit going into the end of the govt guarantee, as Heartland seems to have more reliance on guaranteed deposits than the other affected institutions. Interest rates on debentures should be a pointer as to how things are going (particularly relative to any movements in bank term deposit rates).
So here is the picture of rates as they were from March until around the time of the recent PGC vote meeting:
http://img.villagephotos.com/p/2006-...8apr11.png.jpg
And here is the current:
http://img.villagephotos.com/p/2006-...-jun11.png.jpg
The change is pretty subtle - in the 12 month and 18 month rates, which have crept up just 0.25%. However, by comparison, I would estimate that the typical bank term deposit rate has fallen by 0.5%, so the spread against banks has been widening.
No worries here yet, but worth watching.
NZX have announced Hearthland is to enter the NZX-50 index on June 20 (and PGC will exit it.)
ACC do have (or at least did have) a good record, but not for reasons of immediacy.
Levies pay the claims of today. The reserves are for the long tail typical of a compensation book that may need to pay long term injury claims years so there is very little that needs to be immediate beyond standard cashflow /treasury / cash management needs that the levies already meet. ACC are typically profitable on a cashflow basis and have little need to tap technical reserves - it's on the long tail actuarial view that reserves need to be established for.
This is also the secret of how private Worker Comp companies make money in other countries - they trade on smaller insurance margins because they understand the funds may be captive for decades before being required for claims so investment returns are consequently higher then a short tail insurance book like say State Insurance's who have to pay for Motor claims in short order.