Clearview Wealth Limited · ASX:CVW
Clearview Wealth — Investor Presentation (February 2024)
46 slides from Clearview Wealth's investor presentation, Feb 22, 2024
Slide 1: ClearView Results HY24 Investor Presentation
ClearView Results HY24 Investor Presentation 22 February 2024 Nadine Gooderick Athol Chiert Managing Director Chief Financial Officer
Slide 2: HY24 financial highlights and FY26 goals
HY24 financial highlights and FY26 goals ClearView achieved a 37% growth in Group Underlying NPAT5 to $17.3m in HY24 under new accounting standard AASB 17; introduction of interim HY24 cash dividend of 1.5cps New Business Gross In-force Premium Life Fully franked Market Share1,2 Premiums Market Shar
Slide 3: Simplified business focused solely on life insurance
Simplified business focused solely on life insurance Our Strategy Key Highlights Support FY26 Target4 Outcomes • New business up 55% to $17.5m • Current trajectory, product and channel focus driving growth - new Driving business • New business market share of 10.9% 1,2 (up from 9.2% 1,2 in FY23) bus
Slide 4: ClearView has adopted AASB 17 for first time
ClearView has adopted AASB 17 for first time HY24 are the first results that ClearView is providing under the new accounting standard AASB 17 – it does not impact the economics of our business, financial strength, claims paying ability or dividend capacity – it impacts the timing of recognition of i
Slide 5: ClearView overview and strategy
ClearView overview and strategy
Slide 6: ClearView is now a strategically focused business
ClearView is now a strategically focused business on what it does best: Life Insurance Core Focus Life insurance Life insurance business is now positioned to: • Support double digit Underlying NPAT3 growth off AASB 17 FY24 base2 • Dividend policy of 40%- 60% of Underlying NPAT3 - range to be reviewe
Slide 7: ClearView is gaining new business market share in a growing market
ClearView is gaining new business market share in a growing market 55% growth in new business in HY24 with a 10.9% market share1,2 Challenger in IFA market IFA New Business ($m) and Market Share1,2 (%) FY26 Target3: • Sales momentum and growth has continued into HY24 12%-14% target • New sales of $1
Slide 8: ClearView market positioning – top of mid tier
ClearView market positioning – top of ‘mid tier’ • The retail advice life industry continues to New business sales: July – December 2023 ‘settle’ after years of unprecedented change1 • ClearView has established itself as an accessible challenger brand in the IFA market • ClearView has created a dive
Slide 9: Consistent YoY growth of in-force premium
Consistent YoY growth of in-force premium since entry in IFA market In-force portfolios should trend to higher new business share (over time) which underpins the growth profile FY26 Target3: Strong track record of in-force premium growth ~4.0% market since entry into retail market in FY12 share and
Slide 10: Market and ClearView drivers
Market and ClearView drivers Increasingly Simplified Strong growth in Structural Inflation-linked Strong balance attractive life business model premiums, changes and premiums sheet and insurance market with core focus market share and transformation broadly offset capital position – on life insuranc
Slide 11: HY24 result
Ri ClearView HY24 result
Slide 12: HY24 group result – AASB 17 basis
HY24 group result – AASB 17 basis FY23 Underlying NPAT restated on AASB 17 basis – impacts driven by interest rate effects, timing and pattern of profit release (remains unchanged over life of contract) HY24 result reflects increased rates, strong growth and business momentum. Life insurance busines
Slide 13: HY24 financial highlights
HY24 financial highlights New Business New Business In-force Group HY24 interim Market Share1,2 Premiums3 Underlying dividend5 $17.5m NPAT4 $359m 1.5cps $17.3m +55% 10.9% +10% +37% 57% of Underlying NPAT4 1. ClearView calculations based on NMG Risk Distribution Monitor Reports for Retail Advice In-f
Slide 14: Strong track record of top line growth
Strong track record of top line growth HY24 growth in gross premiums driven by market share gain and new business flows and inflation linked premiums. Gross premium for period broadly reflects average in-force premiums FY26 Target1: $400m of gross premium in total Gross Premium - $m across channels
Slide 15: With a focus on profitable growth
With a focus on profitable growth HY24 Life Insurance Underlying NPAT1 up 32% on a AASB 17 basis to $19.4m; Underlying Life NPAT margin2 of 10.9% – improved margin reflects interest rate changes, strong business momentum and performance (benefits of transformation program). Improving target margin (
Slide 16: Non-IFRS Financial Information
Non-IFRS Financial Information Underlying NPAT continues to be key measure of profitability and basis on which dividends are determined – considered to be a non-IFRS measure given that it excludes certain items not considered relevant to Group’s performance or are considered unusual to ordinary acti
Slide 17: Balance sheet strength
Balance sheet strength Net assets are backed by cash and highly rated securities - balance sheet provides strong downside protection due to its high level of net tangible assets. Upon implementation and transition to AASB 17, financial position is presented as though AASB 17 has always applied, with
Slide 18: Capital generation
Capital generation The life insurance in-force portfolios generate significant cash flows which is subsequently reinvested into new business generation Life Insurance Underlying Before Tax3 Capital Generation1 - $m 69.3 ClearView continues to generate capital from its in-force portfolios1 prior to r
Slide 19: Embedded value at 31 December 2023
Embedded value at 31 December 2023 Embedded value (EV) represents the discounted cash flow of in-force portfolio – no new business is included in the calculations. EV has been prepared on a consistent basis - no changes from AASB 17 have been allowed for, in particular from a change in timing of tax
Slide 20: Outlook
Ri ClearView
Slide 21: FY24 outlook
FY24 outlook Focus on Life Insurance Continue Transformation Enhance Customer Experience • Business simplification leads to core • Implementation of IT transformation • Enhance customer experience – focus on life insurance strategy data driven, automation improvements, tele-claims, • Enhancement and
Slide 22: For further information, please contact
For further information, please contact: Investor inquiries Media inquiries Trevor Franz Leng Ohlsson Principal, Catapult Partners Head of Corporate Affairs E: trevorfranz@catapultpartners.com.au E: leng.ohlsson@clearview.com.au 22
Slide 23: Appendix Additional Financial Information
Appendix Additional Financial Information – AASB 17
Slide 24: AASB 17 Detailed Summary and Financial Information
AASB 17 Detailed Summary and Financial Information
Slide 25: No change to underlying business economics
No change to underlying business economics AASB 17 does not impact the economics of our business, financial strength, claims paying ability, or dividend capacity. It is an accounting standard change under International Financial Reporting Standards that impacts the timing of recognition of insurance
Slide 26: Consolidated HY24 results reconciliation
Consolidated HY24 results (AASB 17): Reconciliation of Underlying NPAT to Reported NPAT1 2023 2024 % Consolidated Profit or Loss¹ 1H 2H FY23 1H Change2 Gross life insurance premiums 160.0 165.2 325.1 178.0 11% Interest and other income 4 4.6 6.4 10.9 7.2 58% Gross Income 164.6 171.5 336.1 185.2 13%
Slide 27: HY24 Result - Life insurance management view
HY24 Result (AASB 17) - Life insurance management view 2023 2024 % Life Insurance Profit or Loss 1H 2H FY23 1H Change1 Gross life insurance premiums 160.0 165.2 325.1 178.0 11% Interest Income 4.2 5.8 10.0 6.4 51% Interest on Tier 2 (1.3) (1.4) (2.7) (1.5) 23% Claims incurred (gross) (66.2) (66.6) (
Slide 28: HY24 Result - Life insurance key statistics
HY24 Result - Life insurance key statistics 2020 2021 2022 2023 HY24 Key Statistics And Ratios ($M) 1H 2H FY20 1H 2H FY21 1H 2H FY22 1H 2H FY23 1H New Business 14.2 10.1 24.2 8.4 7.9 16.3 10.4 9.8 20.2 11.3 13.9 25.2 17.5 LifeSolutions 14.2 10.1 24.2 8.4 7.9 16.3 8.9 1.1 10.0 — — — — ClearChoice — —
Slide 29: HY24 Result - Listed/Group Segment
HY24 Result - Listed/Group Segment 2020 2021 2022 2023 % Change 1 Listed Profit or Loss 1H 2H FY20 1H 2H FY21 1H 2H FY22 1H 2H FY23 HY24 Interest Income 0.1 0.1 0.2 0.1 0.0 0.1 0.1 0.9 1.0 0.4 0.6 0.9 0.8 Large Interest on debt & facility fees (0.4) (0.6) (0.9) (1.0) (1.8) (2.8) (1.9) (2.0) (3.8) (2
Slide 30: HY24 Result - Wealth Management
HY24 Result - Wealth Management – Discontinued Operation 2020 2021 2022 2023 % Wealth Management Profit or Loss1 1H 2H FY20 1H 2H FY21 1H 2H FY22 1H 2H FY23 HY24 Change2 Fund management fees 16.7 15.7 32.5 15.5 15.5 31.0 16.0 13.9 29.9 10.9 10.5 21.3 10.0 (8%) Interest Income 0.3 0.2 0.5 0.1 0.3 0.4
Slide 31: Balance sheet as at 31 December 2023
Balance sheet as at 31 December 2023 (AASB 17) Commentary2 Net Asset and Capital Position • Net assets (pre-ESP loans) of $369.8m, post $19.8m FY23 cash dividend • Stated after AASB 17 Opening Balance Sheet net of tax adjustment of $83.6m • Surplus capital above internal benchmarks of $18.9m7 Cash,
Slide 32: Balance Sheet 1 July 2022 - Restated
Balance Sheet 1 July 2022 - Restated AASB 17 1 July 2022 ($'000) AASB 1038 Derecognition Reclassification Recognition AASB 17 Assets Assets Cash and cash equivalent 150,735 - - - 150,735 Cash and cash equivalent Upon implementation and Investments 2,289,624 - - - 2,289,624 Investments transition to
Slide 33: Balance Sheet 30 June 2023 - Restated
Balance Sheet 30 June 2023 - Restated Consolidated Statement of Financial Positions as at 30 June 2023 AASB 17 30 June 2023 ($'000) AASB 1038 Derecognition Reclassification Recognition AASB 17 Commentary Assets Assets Cash and cash equivalent 94,522 - - - 94,522 Cash and cash equivalent Investments
Slide 34: HY23 Life Insurance Underlying NPAT Waterfall
HY23 Life Insurance Underlying NPAT Waterfall (AASB 1038 vs AASB 17) HY23 Underlying NPAT1 restated on AASB 17 basis – impacts driven by interest rate effects, timing and pattern of profit release (remains unchanged over life of contract). Impact of reduction in HY23 Underlying NPAT of $19.4m to $14
Slide 35: FY23 Life Insurance Underlying NPAT Waterfall
FY23 Life Insurance Underlying NPAT Waterfall (AASB 1038 vs AASB 17) FY23 Underlying NPAT1 restated on AASB 17 basis follows similar pattern to HY23. Underlying NPAT guidance of double-digit growth off FY24 base year remains unchanged Capitalised lapse profits are no longer treated in same way under
Slide 36: AASB 17 general model overview
AASB 17 general model overview The cash flows and basic building blocks of insurance contract liabilities (projected cash flows and discounting) remains unchanged. The estimates of cash flows include all those that directly relate to the fulfillment of the contracts and includes all cash flows withi
Slide 37: General Model – measurement on initial recognition
General Model – measurement on initial recognition Fulfilment cash flows Example 1: Profit that the insurer No gain at expects to make inception during the life of the PV of future cash PV of future Risk adjustment contract outflows cash inflows Contractual Nil service margin Fulfilment cash flows E
Slide 38: Asset for insurance acquisition cash flows
Asset for insurance acquisition cash flows (AIACF) ClearView’s underlying (gross) yearly renewable term (YRT) stepped premium business contract boundary is materially shortened from a long-term, natural expiry contract boundary under AASB 1038 to a 12-month contract boundary under AASB 17. This appl
Slide 39: AASB 17 disclosures – simplified income statement view
AASB 17 disclosures – simplified income statement view AASB 17 introduces the concept of an insurance services and investment result. Insurance service results can be divided into the difference between expected and actual claims, risk adjustment and amortization of CSM. Expected insurance claims an
Slide 40: AASB 17 Glossary
AASB 17 Glossary Contractual Service Margin A liability which is established at the outset of a contract to offset new business profits at issue. The CSM liability is gradually amortised as services are (CSM): provided. Fulfilment cash flows (FCF): An explicit, unbiased, and probability weighted est
Slide 41: Embedded value and capital position at December 2023
Embedded value and capital position at 31 December 2023
Slide 42: Embedded Value movement analysis
Embedded Value movement analysis Embedded Value1,2 Waterfall: FY23 - HY22 ($M) FY23 final cash dividend has a - $19.8m impact 1. Embedded Value at 4% discount rate margin, including a value for future franking credits, accrued franking credits and Employee Share Plan (ESP) loans. Risk free rate of 4
Slide 43: EV movement analysis by segment
EV movement analysis @ 4% DM by segment at 31 December 2023 MOVEMENT ANALYSIS @ 4% dm Life Wealth Other Total EV - 30 June 2023 @ 4% dm (As Published) incl Franking Credits and ESP Loans 558.6 17.0 11.4 587.0 Dividends paid — — (19.8) (19.8) Restatements — (6.0) 5.9 (0.2) EV - 30 June 2023 @ 4% dm (
Slide 44: EV sensitivity analysis at 4% DM
EV sensitivity analysis @4% DM1 EV Sensitivity Analysis - Life @ 4% dm ($mil) 1. Does not include the impact of management actions in response to sensitivities (for example, premium rate changes), or reinsurer response to sensitivities (for example, reinsurer rate changes). “dm” represents the disco
Slide 45: Disclaimer
Disclaimer Important notice and disclaimer Summary information Pro-forma financial information This investor presentation (Presentation) contains summary information about ClearView Wealth Limited ClearView uses certain measures to manage and report on its business that are not recognised under (ACN
Slide 46: End
é 2 8 & 1S) z
ClearView Wealth — Investor Presentation (February 2024) on 6ix