ClearView Investor Presentation Year Ended 30 June 2024

Asset for insurance acquisition cash flows (AIACF) ClearView’s underlying (gross) yearly renewable term (YRT) stepped premium business contract boundary is materially shortened from a long-term, natural expiry contract boundary under AASB 1038 to a 12-month contract boundary under AASB 17. This applies to both the lump sum and disability income business and reflects the policyholder renewal and repricing cycle.

Due to a shorter contract boundary for YRT ClearView recognises directly attributable insurance acquisition costs over longer term by establishing an asset for insurance acquisition cash flows (AIACF) related to future renewals of YRT business: • Explicit asset for AIACF created on Balance Sheet for stepped premium business – the AIACF is held for directly attributable expenses related to acquisition and underwriting of new business • Premiums that are collected over life of the contract include an allowance for the recoverability of these acquisition costs • AIACF is amortised based on present value of premiums and written off over life of a stepped premium contract • The onerous contract (and related impairment) testing is more granular under AASB 17 and as such impairment (over and above the amortisation) may lead to material reported profit impacts, although there is no change in the annual cash flows of a policy and the AIACF is expected to be recoverable from cash flows at a portfolio level (subject to lapse risk) • As such the AIACF impairment reflects a (brought forward) timing difference in write off of the AIACF and changes the pattern and timing of reported profit release over life of a policy • The non-cash impairment is therefore separately removed from Underlying NPAT given that cash flow collection and recoverability on the portfolio as a whole remains unchanged and reflects a timing in release of profit. The Underlying NPAT is adjusted to ensure the AIACF that is amortised does not reflect any impairments post the transition date of 1 July 2022

CSM

Present value of premium income

Risk adjustment Insurance acquisition cash flows Present value of insurance claims, etc.

38

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