In an investors webcast today (28 April), Tjärnström explained how Kindred implements affordability checks and said that the risk of these driving some customers away had been a challenge.
“With the tools we have at our disposal to estimate affordability, basically requiring questions to be asked to the customers, the customers – especially those in a high-net-worth segment- are reluctant to provide the documents necessary to clear them,” Tjärnström said.
“As a consequence we are unable to accept that kind of business.”
He added that this affected Kindred’s high value segment throughout Q1.
“That’s the biggest impact we’ve seen during the quarter, especially in the high-value segment.”
Tjärnström went on to explain that Kindred has implemented “various initiatives” related to affordability, and has input backstops on every customer account.
However, he criticised current regulation related to affordability, calling it “unclear”.
“We’ve gone over and above what is required,” he continued. “But it’s always a question of what is enough.”
Elsewhere Tjärnström commented on Kindred’s activity in the North American market, focusing on the company’s investments.
“We’re working very hard on optimising our investments and also returns we’re getting, especially on the North American market,” said Tjärnström.
This optimisation comes at a price, he continued, as Kindred “scaled back” its investments in the first quarter in favour of prioritising certain states.
“We have scaled back on own investments, not participating at the leading edge of these marketing and customer incentives, ” said Tjärnström. “We’re focusing our fundamentals, reducing our offers and marketing to some extent, but we’re still concentrating more on investments in fewer select states, then scaling up.”
Tjärnström added that Kindred is “optimistic” about its presence in Ontario, where it has already had a “small presence”.
Looking towards the Netherlands, Tjärnström said that it would be difficult to comment on Kindred’s presence in the country “… until we [Kindred] have a licence, until we’re back and can see tangible results of the efforts we’re doing.”
Kindred reported revenue of £246.7m (€293.8m/$308.5m) in its Q1 2022 results today- a year-on-year drop of 30.2%, which the company attributed to its exit from the Netherlands.