Directors’ Report
Chart 5: Capital position as at 30 June 2024 ($M)
353.2
(20.3)
75.0
124.7
(97.6)
27.1
(283.2)
Net capital position
Net assets Less:
Less: capital base adjustments
Tier 2 capital
Regulatory capital base
Less: reserved capital 1
intangible adjustments
The capital position reflects: • The net assets of $353.2 million as outlined above. • Under the APRA capital standards, adjustments are made to the capital base for various asset amounts that are deducted from the Group net asset position. • Intangible adjustments of $20.3 million are deducted from the net assets and includes goodwill ($4 million), capitalised software ($15.8 million) and costs associated with Tier 2 raising ($0.5 million). Given that the capitalised software is held in the shared services entity, 50% of its carrying value is deducted for capital purposes. • Capital base adjustments reflects the difference between the adjusted insurance contract liabilities held for capital purposes and the insurance contract liabilities held under AASB 17. This predominantly reflects the removal of the deferred acquisition cost asset ( AIACF ) that is not permitted to be counted in the regulatory capital base under the APRA capital standards. • The capital base adjustment also includes the removal of any deferred tax assets that cannot be included under the standards. As a result of the transition to AASB 17, the Group’s accounting net life insurance contract liability, for which the carrying amount will be settled in future periods has increased. This results in an increase in the deductible temporary differences and a related deferred tax asset of $35.9 million, 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 AASB 17 impacts on life insurance companies, there is no indication that AASB 17 will result in a change to the income tax laws. As these temporary differences create income tax losses on transition and 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 $35.9 million has been recognised on balance sheet on transition. Total Group deferred tax asset (related to Group carried forward losses) of $43.8 million is held on Balance Sheet as at 30 June 2024. The tax benefit should be realised in future periods as the losses are utilised. • The Tier 2 subordinated debt is incorporated into the capital base in accordance with the APRA capital standards ($75 million). The costs associated with the raising have been deducted as part of the Intangible adjustments. • This results in a Group regulatory capital base, calculated in accordance with the APRA capital standards of $124.7 million.
1 Reserved capital includes the minimum regulatory capital, APRA supervisory adjustment for ClearView Life as part of IDII sustainability measures and risk capital which is additional capital held to address the risk of breaching regulatory capital.
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ClearView Annual Report 2024
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