Net assets are backed by cash and highly rated securities - balance sheet provides strong downside protection due to its high level of net tangible assets. Transition to AASB 17 (1 July 2022) resulted in a reduction in net assets of $83.6m (after tax) and creation of a deferred tax asset of $35.9m Balance sheet strength
Net Assets - $m $353.2
Net Capital Position 3 - $m
Adjustment includes DTA 2 of $43.8m that will generate capital as losses are utilised in foreseeable future
$101.3
Investment in highly rated interest portfolio externally managed – cash and investments of $523.6m
Net surplus capital of $27.1m 1 including release of capital from wealth exit and review of target risk capital, net of dividends paid
$422.3
Tier 2 Subordinated Notes and NAB Debt Facility - corporate debt of $105.5m
$(105.5)
$(64.9)
Net assets
Corporate debt
Other net liabilities Investments Cash
1. Includes benefit of $15.9m from treatment of capitalised software asset. Capitalised software asset is held by the administration entity with 50% of the carrying value removed as part of the intangible adjustment. 2. 1 July 2022 opening Balance Sheet impact on net assets for in-force business as at the transition date has an impact of $83.6m after tax. As a result of the transition to AASB 17, the Group’s accounting net of reinsurance life insurance contract liability, for which the carrying amount will be settled in future periods has increased. This results in the recognition of a deferred tax asset of $35.9m, given the movement in the net life insurance contract liability is deductible when settled in the future. While the Australian Taxation Office (ATO) and Treasury has yet to provide any announcement or guidance in respect of the AASB17 impacts on life insurance companies, there is no indication that AASB 17 will result in a change to the income tax laws. Given that it is probable that the Group’s future taxable profit will be available against which the tax losses can be utilised, the additional deferred tax asset of $35.9m has been recognised on balance sheet on transition. Total Group deferred tax asset (related to Group carried forward losses) of $43.8m as at 30 June 2024 – this tax (capital) benefit should be realised in future periods as the losses are utilised 3. Net capital position of $27.1m stated prior to FY24 final dividend; includes a capital release of $5.9m from the sale of the investment management business to Human Financial on 31 January 2024 and $5.2m from the sale of the shareholding in Centrepoint Alliance in November 2023. Net capital position is stated after the payment of the FY23 and HY24 cash dividends of $29.7m in the financial year.
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