Embedded value (EV) represents the discounted cash flow of in-force portfolio – no new business is included in calculations. EV has been prepared on a consistent basis - no allowance in future projections for changes to tax cash flow given changes to timing of profit release on adoption of AASB 17 Embedded value at 30 June 2024
Discount rate
7% 8% 9% 3% dm 4% dm 5% dm
Risk margin over risk free rate 1 ($M), (unless otherwise stated) Life insurance
Risk free rate has remained unchanged at 4%: • The Life Insurance EV increased by 9.4% to $608.1m, including franking credits • Wealth Management segment continues to be reflected at net assets and included in net worth $3m (FY23: $17m) • Listed segment of -$20.1m driven by the payment of the cash dividends in the year (- $29.7m) • Overall EV is therefore $591.1m or 91.4cps including franking credits or $509.5m or 78.8cps excluding franking credits net of dividends of 4.5cps paid during year • A risk free rate of 4% has continued to be adopted
522.7 502.3 462.3 522.7 502.3 462.3
Value of In Force (VIF)
Net worth Total EV 3
6.3
6.3
6.3
529.0 508.6 468.6
ESP Loans 2
0.9
0.9
0.9
529.9 509.5 469.5
Total EV including ESP Loans Franking Credits @ 70%: Life Insurance Net worth (accrued franking credits)
79.9
75.3
71.3
6.3
6.3
6.3
86.2
81.6
77.6
Total Franking Credits
616.1 591.1 547.1
Total EV including ESP loans and franking credits EV per Share including ESP Loans (cents)
81.9 95.2
78.8 91.4
72.6 84.6
EV per Share including ESP Loans and Franking Credits (cents)
1. EVs have been presented at different ‘discount margin’ rates over the assumed long-term risk free rate reflected within the underlying cash flows valued. “DM” represents the discount rate risk margin which refers to the margin above the assumed long-term risk free rate. The long-term risk free rate adopted for the FY24 EV is 4% (FY23: 4%). As at 30 June 2024 unless otherwise stated 2. ESP loans are a non-recourse loan that is accounted for as an option and not reported as a receivable on the Balance Sheet as at the reporting date. Based on the 90 day VWAP share price of 57.74 cents per share at 30 June 2024, of the remaining 6.1 million ESP shares on issue (and included in the total shares on issue of 651.0 million), 2.1 million ESP shares are considered to be in the money with a ESP loan recoverable balance of $0.9 million. 4.0 million out of the money ESP shares could therefore be bought back, thereby reducing the shares on issue to 647.0 million shares. As such, $0.9 million of ESP loans have been added to the net assets and 647.0 million shares on issue have been used for the purposes of calculating the net asset value per share. On a fully diluted basis, net of 2.6 million treasury shares, a further 9.1 million performance and restricted rights can be converted into ordinary shares - these have been excluded for the purposes of the calculation. 3. Assumptions used in the EV are consistent with best estimate assumptions in the statutory insurance contract liability valuation, with the exception of the assumed gross premium repricing cycle in CY25 across the relevant products to cover the claims cost assumption changes
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