Slide 1: ClearView Results Year ended 30 June 2021
ClearView Results Year ended 30 June 2021 Investor presentation 25 August 2021 Simon Swanson Managing Director Athol Chiert Chief Financial Officer 1
Slide 2: Executive summary
Executive summary Highlights Operating Earnings: • Solid result in challenging environment $23.9m Up 83% • Business resilient to COVID-19 impacts in FY21 • Strong underlying claims performance and improved lapse Underlying NPAT: performance in life insurance segment $22.7m Up 54% • Life insurance co
Slide 3: Financials FY21 result
Financials FY21 result Key Observations FY21 FY20 % 1 After Tax Profit by Segment, $M $M $M Change1 • Group Operating Earnings up 83% ; Underlying NPAT up 54%1; Life Insurance Life Insurance5 23.5 8.8 166 % contributes 98% Wealth Management 0.6 3.3 (80)% • Strong claims and improved lapse Financial
Slide 4: Participation Strategy and Rationale
Participation Strategy and Rationale ClearView’s core focus on life insurance drives the basis for participation into advice (placement) and then into superannuation & investment • Affluent but highly leveraged population • Life insurance central to • Life insurance regarded as a ClearView’s strateg
Slide 5: Business and strategy update
Business and strategy update Strategic priorities FY22 focus areas Income protection product redesign and pricing to Launch of ClearChoice product in Q2 FY22 - address industry issues sustainable product margins Life Repricing of LifeSolutions inforce portfolio Staggered price increases over a perio
Slide 6: Strong demand for life insurance products
Strong demand for life insurance products Australia has a large & growing ‘financially active’ population; relatively affluent but highly leveraged households, community awareness and recognition of need changes through different life stages Australian Population Characteristics Community Expectatio
Slide 7: Life Insurance market
Life Insurance market Significant market consolidation and disruption presents opportunity for ClearView to gain market share by being a nimble, efficient and locally focused life insurer Three market segments – Outlook • Declining adviser numbers shifting from large institutionally APRA’s IDII Clea
Slide 8: Life Insurance FY21 result
Life Insurance FY21 result • Recurring revenue base up 7%1 Life Insurance Operating Earnings Gross Premium Income ($M) (after tax)($M) • Strong underlying claims Gross premiums performance reflective of claims Operating up 7%1 earnings up management outcomes and 83%1 limited COVID-19 claims impacts
Slide 9: Wealth Management market
Wealth Management market Three segments Retail super funds Wrap Sophisticated advised clients seeking a broad array of investment options Master trust Advised, middle market clients suited to unitised super and non-super solutions, outside of the heavy technology-spend wrap platform segment. Impleme
Slide 10: Wealth Management FY21 result
Wealth Management FY21 result Wealth Management Operating FUM ($B) • FUM up 22%1, driven by positive net flows and Earnings (after tax) ($M) investment performance • Fees down 4% given margin compression, transition of wrap business to HUB24 and 3.39 4.8 0.16 reduction of FUM in model portfolios (ne
Slide 11: Financial advice
Financial advice • Subsequent to year end, Board initiated a strategic review to seek out inorganic opportunities - led to Efficiency Centrepoint Alliance transaction • Provides immediate scale with a strong and effective management team and capability to develop a market Platform leading position •
Slide 12: ClearView and Centrepoint Alliance (CAF): Transaction
ClearView and Centrepoint Alliance (CAF): Transaction Majority of value in merger between CVW5 and CAF is in strategic value, synergies and creation of a platform and capability to further consolidate the market • Sale proceeds of $15.2m made up of $3.2m in cash and a 25% strategic equity stake1 • D
Slide 13: Financial advice FY21 result
Financial advice FY21 result We are a national financial advice business with a strong platform and growing footprint - but is currently sub-scale MPS/ Total '$M FY20 FY21 State CFA LaVista ARs Revenue1 18.1 13.1 2 ARs AFSL ARs Costs (15.7) (11.9) ACT 10 1 2 12 Business unit 2.5 1.2 NSW 75 8 24 99 o
Slide 14: Balance Sheet strength
Balance Sheet strength • $75m Tier 2 capital raising in November 2020 Net Assets • Asset concentration risk addressed in medium term1 FY18 FY19 FY20 FY21 • Life insurance superannuation transfer to HUB24 Net assets ($m) 444.3 439.1 452.7 459.4 completed November 2020 - addresses tax credit issue Net
Slide 15: Business outlook
Business outlook We have a set of clear targets for the continued transformation of our life insurance business in FY22, with outcomes to be determined by the successful implementation of the new IT platform, launch of ClearChoice and risks associated with the repricing of the LifeSolutions Business
Slide 16: Financial outlook
Financial outlook Reinstatement of FY21 fully franked cash dividend - represents just under 30% of Operating Earnings and reflects an element of conservatism due to recent COVID-19 events Forecast capital Strong Balance Surplus capital generation allows Ultra low interest Embedded Value Final fully
Slide 17: Glossary
Glossary AFSL Australian Financial Service Licence; AR is an authorised representative Operating Earnings or Operating Earnings (after tax) represents the Underlying NPAT of the business segments before underlying investment Operating Earnings After Tax income and interest costs associated with corp
Slide 18: For further information, please contact:
For further information, please contact: Investor inquiries Media inquiries Trevor Franz Leng Ohlsson Principal, Catapult Partners Head of Marketing and Corporate Affairs M: 0406 882 736 T: (02) 8095 1539 M: 0409 509 516 E: trevorfranz@catapultpartners.com.au E: leng.ohlsson@clearview.com.au 18
Slide 19: Appendix Additional Financial Information
Appendix Additional Financial Information 19
Slide 20: Consolidated FY21 results: Shareholder view
Consolidated 12 Months to June 2021 ($M) Gross life insurance premiums ¹ 1H 104.7 2018 2H 110.5 FY18 215.2 1H 120.5 2019 2H 122.6 FY19 243.1 1H 129.0 2020 2H 131.0 FY20 260.0 1H 138.4 2021 2H 139.8 FY21 278.2 % Change2 7% FY21 results: Fund management fees Financial advice fees Other Income 18.0 8.8
Slide 21: Life Insurance
Life Insurance 2018 2019 2020 2021 % ¹ 12 Months to June 2021 ($M) 1H 2H FY18 1H 2H FY19 1H 2H FY20 1H 2H FY21 Change2 Gross life insurance premiums 104.7 110.5 215.2 120.5 122.7 243.1 129.0 131.0 260.0 138.4 139.8 278.2 7% Other income — — — — — — — — — — 0.2 0.2 NA Net claims incurred (16.9) (16.0
Slide 22: Wealth Management
Wealth 12 Months to June 6 Months 2021 ($M) to December Fund management fees ¹ 2020 ($M)¹ 1H 2018 1H 2H 18.0 2018 2H FY18 18.2 FY18 1H 36.2 2019 1H 2H 17.7 2019 2H FY19 16.7 FY19 1H 34.4 2020 1H 2H16.7 2020 FY20 2H 15.7 2021 FY20 1H 32.5 % 1H Change² 15.5 2021 2H 15.5 FY21 Change2 31.0 (4%) % Manage
Slide 23: Financial Advice
Financial 12 Months to June 2021 ($M)¹ 1H 2018 2H FY18 1H 2019 2H FY19 1H 2020 2H FY20 1H 2021 2H FY21 % Change2 Advice Net financial planning fees 8.8 8.5 17.4 8.8 8.4 17.2 8.8 9.4 18.1 7.1 6.0 13.1 (28%) Other Income — — — 0.2 — 0.2 — — — — — — NM Operating expenses (7.6) (7.7) (15.3) (9.1) (7.2)
Slide 24: Listed/Group Segment
Listed/ 2018 2019 2020 2021 % Group 12 Months to June 2021 ($M)¹ Operating expenses BU Operating NPBT 1H (0.7) (0.7) 2H (0.5) (0.5) FY18 (1.2) (1.2) 1H (0.7) (0.7) 2H (0.6) (0.6) FY19 (1.2) (1.2) 1H (0.6) (0.6) 2H (0.7) (0.7) FY20 (1.4) (1.4) 1H (0.7) (0.7) 2H (0.4) (0.4) FY21 Change2 (1.2) (1.2) (1
Slide 25: Balance Sheet, Embedded value and capital position at June 2021
Balance Sheet, Embedded value and capital position at 30 June 2021 25
Slide 26: Balance sheet as at 30 June 2021
Balance sheet as at 30 June 2021 Commentary2 Consolidated Balance Sheet (shareholder view)1 Net Asset and Capital Position FY21 FY20 • Net assets (pre-ESP loans) of $459.4m Assets • Surplus capital above internal benchmarks of $14.3m6 Cash and cash equivalents 158.7 272.0 Cash, debt and investments
Slide 27: Capital position at 30 June 2021
Capital position at 30 June 2021 Commentary Group Capital Position Bridge - $m 459.4 • Net capital position above internal benchmarks of $14.3m (30.3) • Intangible adjustment includes the removal from the capital position of goodwill ($12.5m), intangibles ($7.7m), CRP receivable ($8.5m) and Tier 2 c
Slide 28: Embedded Value as at 30 June 2021
Embedded Value as at 30 June 2021 Risk margin over risk free rate2: ($M), 3% dm 4% dm 5% dm 701.1 (unless otherwise stated) 624.1 661.9 31.0 672.6 643.4 640.4 31.6 32.8 Life insurance 495.1 461.7 431.7 Wealth management 46.2 43.8 41.7 533.3 541.9 518.2 Value of In Force (VIF) 541.2 505.4 473.3 467.6
Slide 29: Embedded Value movement analysis
Embedded Value movement analysis Embedded Value1 Waterfall: FY20-FY21 ($M) • Key assumption changes at 30 June 2021 included in EV calculations: • Claims assumptions include the adoption of the new IDII tables and an updated assessment of potential impacts from COVID-19 29.7 3.7 5.7 2.4 • Shock laps
Slide 30: EV movement analysis @ 4% DM by segment at 30 June 2021
EV movement MOVEMENT ANALYSIS @ 4% dm Life Wealth Advice Other Total EV - 30 June 2020 @ 4% dm (As Published) incl Franking Credits and ESP Loans 539.1 61.0 10.3 33.1 643.4 analysis @ 4% DM Restatements/modeling difference EV - 30 June 2020 @ 4% dm (Restated) (1.0) 538.1 (0.5) 60.5 — 10.3 — 33.1 (1.
Slide 31: EV sensitivity analysis @4% DM
EV sensitivity analysis @4% DM 1 EV Sensitivity Analysis - Total @ 4% dm ($mil) Inflation -0.5%;+0.5% -6.0 6.3 Risk-free rate +1%;-1% -19.8 22.5 FUMA -10%;+10% -4.4 4.3 Expenses +10%;-10% -16.1 16.1 Discontinuance Rates +1%;-1% -21.5 24.1 Claims +10%;-10% -26.8 27.6 -30 -20 -10 0 10 20 30 EV Sensiti
Slide 32: Group net assets and capital analysis at 30 June 2021
Group net assets and capital analysis at 30 June 2021 Group Capital Position as at Life Wealth Other APRA Wealth Financial ASIC All Regulated NOHC⁶/ Other Group 31 June 2021 ($M) Regulated Advice Regulated Entities Entities Entities Net assets at 30 June 2021¹ 441.2 10.2 4.1 455.5 8.7 11.4 20.1 475.
Slide 33: Impact of ESP Shares
Rg ClearView Impact of ESP Shares
Slide 34: Impact of Employee Share Plan (ESP) shares
Impact of Employee Share Plan (ESP) shares Per share calculations Year ended 30 June 2021 FY21 • Accounted for as an option in accordance with AASB 2 Number of shares on issue (m) 631.2 • Limited recourse loan not reported as a receivable on balance sheet ESP shares on issue (m) 38.2 • Loan repaid w
Slide 35: Disclaimer
Disclaimer Important notice and disclaimer Summary information Pro-forma financial information This investor presentation (Presentation) contains summary information about ClearView ClearView uses certain measures to manage and report on its business that are not Wealth Limited (ACN 106 248 248) and
Slide 36: End
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