Directors’ Report
Embedded Value Life Insurance is a long-term business that involves contracts with customers and complex accounting treatments. Embedded Value ( EV ) represents the discounted value of the future net cash flows anticipated to arise from the in-force life policies as at the valuation date. The Life Insurance EV (including franking credits) increased 9.4% in the year to $608.1 million. The EV for the wealth management business ($3.1 million) continues to be reflected at net assets as at 30 June 2024 (included in the net worth). The net assets of the Listed segment that is reported in the EV reduced to -$20.1 million, driven by the payment of the cash dividends totaling $29.7 million in the financial year. A risk free rate of 4.0% has been adopted for the purposes of the EV calculations at 30 June 2024 (30 June 2023: 4.0%). The EV has been prepared on a consistent basis with prior reported periods, without any allowance in the future projections for the changes to the tax cash flow given the change in the timing of the pattern of profit release under AASB 17. The EV is discussed in further detail below. EV calculations at a range of risk discount margins ( DM ) is shown below. Discount rate
Risk margin over risk free rate ($M), (unless otherwise stated)
3% dm 4% dm 5% dm
Life insurance
522.7 522.7
502.3 502.3
462.3 462.3
Value of In Force ( VIF )
Net worth
6.3
6.3
6.3
529.0
508.6
468.6
Total EV
ESP Loans
0.9
0.9
0.9
529.9
509.5
469.5
Total EV including ESP Loans Franking Credits @ 70%: Life Insurance
79.9
75.3
71.3
Net worth (accrued franking credits)
6.3
6.3
6.3
86.2 616.1 81.9 95.2
81.6 591.1 78.8 91.4
77.6 547.1 72.6 84.6
Total Franking Credits
Total EV including ESP loans and franking credits EV per Share including ESP Loans (cents)
EV per Share including ESP Loans and Franking Credits (cents)
46
ClearView Annual Report 2024
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