Directors’ Report
The life insurance market has in-force premiums of ~$18 billion market across retail, group and direct to consumer channels. ClearView only participates in the ~$9.6 billion retail life insurance advice channel. In line with its new business market share gains, ClearView has a strong track record of in-force premium growth in the financial adviser channel since entry in 2012. It has an in-force market share of circa 3.5% of the retail life insurance advice channel, with in- force premiums up 12% to $341.9 million (total in-force premiums of $373.9 million including the closed to new business direct channels). Gross Premium income broadly represents the average in-force premiums between periods. The repricing of the in-force portfolios (across the industry) has been taking place over the last few years to appropriately price for risk and experience (claims and reinsurance impacts). In January 2024, ClearView commenced the last phase of its initial repricing cycle on the ClearView LifeSolutions portfolio to cover the cost of the reinsurance premium rate increases and material changes to the claims assumptions (based on experience) in or around 2020. As part of the repricing process the impact on consumers and affordability concerns continues to be considered. Group result - continuing operations Underlying NPAT continues to be adopted by the Board as its key measure of Group profitability and basis for dividend payment decisions. It is used as a non IFRS measure of earnings with the definition updated to reflect the application and adoption of AASB 17 in the financial year. Items not included in Underlying NPAT primarily result from costs relating to major restructuring initiatives, impacts of market and interest rate volatility, impairments of assets, amortisation of acquired intangibles and other transactions outside the ordinary course of business. These are consistently applied period to period. The Underlying NPAT from continuing operations definition has been updated and defined as the consolidated profit after tax excluding: • the effects of economic changes (including changes to long-term discount rates) as noted earlier in the report;
• the (non cash) impairment of the asset for insurance acquisition cash flows ( AIACF ); • changes in the loss component that is predominantly driven by the level premium business; • current year timing impacts from assumption changes on the contractual services margin ( CSM ); and • any costs considered unusual to the Group’s ordinary activities. Underlying NPAT from continuing operations increased 25% to $35.3 million (FY23: $28.2 million) and fully diluted Underlying EPS increased 25% to 5.50cps (FY23: 4.40 cps). Underlying NPAT from continuing operations includes the underlying investment income (the portfolio carry yield on the investment portfolio and interest rate earned on physical cash holdings), costs associated with the incurred claims reinsurance treaties and interest costs associated with corporate debt and Tier 2 Capital. Net underlying interest income for the Group increased to $4.0 million in FY24, increasing from $2.8 million in the prior year. This was driven by an increase in the underlying earning rate on the investment portfolio and interest income on physical cash, partially offset by the increased costs on the Tier 2 subordinated debt. Group operating expenses (from continuing operations) increased to $69.3 million in FY24 (FY23: $64.9 million), up 6.7%. Whilst ClearView has experienced the impacts of inflation on its cost base (given a significant portion is head count related), the increase in the cost base was predominantly driven by an investment into the key areas of the business as follows: • investment in cyber security uplift; • investment in the IT transformation program (and related increased software amortisation charge); • ongoing costs associated with the implementation of AASB 17; and • investment in business capability (head count related). ClearView has achieved a strong FY24 performance underpinned by the transformation strategy and investment in the business.
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ClearView Wealth Limited
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