Directors’ Report
The FY24 result reflects the increased interest rates between periods, the strong growth and underlying business momentum that has been driven by the ongoing business simplification. It has been positively impacted by a stepped change in new business sales, inflation linked premiums and lapse experience (largely in line with expectations), offset by adverse income protection and Total Permanent Disability ( TPD ) claims experience. The claims assumptions have been updated (at 30 June 2024) to reflect the increased income protection and TPD claims costs and experience. The FY26 target margin range of 11% - 13% allows for a further phase of the gross premium repricing cycle in CY25 to cover the increased claims and (if applicable) reinsurance costs across these products. The improving target margin range (over time) is driven by scale benefits, increased exposure to underwriting risk for new business (from 1 October 2023) and operational efficiency savings from the back office and technology investment (FY26+). The FY24 actual life insurance key performance indicators are outlined below:
New Business Market Share 1 11.0 %
Gross Premiums $358.1m +10 %
In-force Premium Market Share 3.5 %
Life Insurance Underlying NPAT Margin 2 11.0 %
Fully franked FY24 dividend 3 3.2cps
FY24 Actual
60 %
payout
The business has now shifted to a growth focus as can been from the key indicators outlined below: • Gross premium income increased by 10% to $358.1 million; • New business increased by 34% to $33.7 million; • New business market share (on a rolling 12 month basis) increased to 11.0% (up from 9.2% in FY23); • Advice in-force premiums increased 12% to $341.9 million; and • Total in-force premiums increased 10% to $373.9 million This resulted in: • Group Underlying NPAT from continuing operations increasing by 25% to $35.3 million; • Life Insurance Underlying NPAT increasing by 23% to $39.5 million; and • Life Insurance Underlying NPAT margin of 11.0% being achieved The exit from the wealth management business allows for the removal of its historical drag on earnings. It continues to be treated as a discontinued operation. During the year, the sale of the equity interest in Centrepoint Alliance in November 2023 resulted in proceeds of $15.2 million and a gain on sale of $2.2 million. Furthermore, the sale of CFML completed on 31 January 2024, with a deferred consideration of $4.85 million (net of a $0.15 million completion payment). The consideration was received on 28 February 2024. This is aligned to the core focus of being a life risk insurance provider.
1 FY24 new business market share based on NMG Risk Distribution Monitor Reports for Retail Advice New Business Analysis (includes the total of 'Retail' consistently applied - that is, IFA, Bank Advice and Aggregator channels). NB market share is based on a rolling 12 months to 31 March 2024. FY24 in-force market share as at 31 March 2024 based on NMG Risk Distribution Monitor in-force report.
2 Is calculated as Life Insurance Underlying NPAT divided by Gross Premium Income. 3 Fully franked dividend. Dividend reinvestment plan to operate for FY24 final dividend.
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ClearView Annual Report 2024
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