Directors’ Report
Operational Outlook • ClearView’s strategic focus has shifted back to growth underpinned by the launch of the ClearView ClearChoice product in 1H FY22 and supported by the business transformation program. • The ClearView ClearChoice product is a beneficiary from the broader reset of the industry and an increased focus on sustainability. • ClearView’s core focus has been on business simplification (including leveraging technology to improve access and fulfillment) and uplifting capability through data and analytics allowing for deeper insights. • Significant progress has been made in the year with regard to the exit from the wealth management business and the full exit from financial advice through the sale of the minority equity interest in Centrepoint Alliance. This is aligned to the core strategy to focus on life insurance. • The continued implementation of the IT transformation strategy remains a key driver to achieve scale and efficiency benefits of the multi year technology investment - these operational benefits are expected to start to progressively flow through from the successful completion of the in-force policy migration (target 1H FY26). • ClearView’s resilient business model is underpinned by a large in-force and growing annuity style revenue base, coupled with price increases and inflation-linked premiums that is expected to continue to substantially offset cost inflation pressures. • ClearView has continued to increase its new business market share, seeking to optimise insurance margins. • Continued outperformance in profitable segments is a key initiative.
Financial Outlook
• The strong FY24 life insurance result reflects the further growth in new business market share to 11% (up from 5% in FY21) and improving margins. • Life Underlying NPAT margin of 11% was achieved in FY24, which is operating at the bottom end of the FY26 target Underlying NPAT margin range of 11% - 13%. • The near-term economic outlook remains cautious given pressures on household budgets. Overall lapse rates remained largely in line with expectation in FY24, noting superannuation is a significant funding source of life insurance. • ClearView has a strong Balance Sheet and capital base - the net assets are backed by cash and highly rated securities. • The net surplus capital position of the Group above internal benchmarks is $27.1 million at 30 June 2024 and is stated prior to the payment (cash component) of the FY24 final dividend of $11.1 million. • The surplus capital position and future business capital generation is anticipated to fund the net capital expenditure impacts of the continued technology investment over the remaining transformation period (12-18 months). • The forecast capital generation allows for progressive increased new business generation (and market share) and a further phase of the gross premium repricing cycle in CY25 to cover the increased claims and (if applicable) reinsurance costs across the products that had adverse experience. • A final fully franked FY24 dividend of 1.7 cents per share was declared, bringing the total dividend for the FY24 year to 3.2 cents per share, up 7% on the prior year. • The Group’s dividend policy remains unchanged at 40%-60% of Underlying NPAT. The target payout ratio is intended to be uplifted post completion of the IT transformation, investment and wealth exit to reflect the capital generation position of the business.
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ClearView Annual Report 2024
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