Slide 1: ClearView Results FY23
ClearView Results FY23 30 June 2023 Investor Presentation 23 August 2023 Nadine Gooderick Athol Chiert Managing Director Chief Financial Officer
Slide 2: FY23 financial highlights and future targeted growth
FY23 financial highlights and future targeted growth ClearView achieved a record 41% growth in Underlying NPAT to $36.5m in FY23; Fully franked FY23 dividend of 3cps New Business Gross In-force Premium Life FY23 Final Market Share1,2 Premiums Market Share1 Insurance Dividend FY23 Underlying Actual $
Slide 3: FY23 financial highlights and future targeted growth
FY23 financial highlights and future targeted growth Simplification program driving operating results and growth Leads to future targeted growth – FY26 targets5 • New business up 25% to $25.2m (2H up 41% to $13.9m) • FY23 new business market share of 9.0%1,2 (up from 5.1%1,2 in FY21) • New Business
Slide 4: 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 capital insurance market with core focus on market share and transformation broadly offset position – life insuranc
Slide 5: Strategy update
Strategy update
Slide 6: Change to future proof our business
Change to future proof our business Life Insurance Simplification: enhanced customer experience • Significant capability uplift - new leaders across key business areas • Distribution: targeted and powered by data • Succession planning • Product: ClearView ClearChoice innovation • Listen, Act, Delive
Slide 7: IT transformation
IT transformation Creating strategic advantages New Oracle based IT system • ClearView is implementing a market leading SAAS IT platform • System has been live for new business from 1 October 2021 • Provides significant product flexibility and scale advantages to allow ClearView to change its produc
Slide 8: Strategically focused business on what ClearView does best: Life Insurance
Strategically focused business on what ClearView does best: Life Insurance Core Ancillary Life Insurance Ancillary • Restarted sales focus – now winning > Financial Advice 9% market share Wealth Management • Exit of direct ownership of financial • Invested in technology, systems and • Board committe
Slide 9: FY23 result
FY23 result
Slide 10: FY23 group result
FY23 group result Record FY23 result, with Underlying NPAT1 up 41% to $36.5m - reflective of business momentum Strong growth in FY23: Underlying NPAT1 by Segment, $M6 FY23 FY22 %Change4 • New Business up 25% to $25.2m Life insurance 40.4 29.2 38% • In force premiums7 up 11% to $305.9m Listed/Group c
Slide 11: FY23 financial highlights
FY23 financial highlights New Business New Business In-force Group FY23 final cash Market Share1,2 Premiums4 Underlying dividend5 $25.2m NPAT3 $305.9m $36.5m 3cps +25% 9.0% +11% +41% +50% 1. ClearView calculations based on NMG Risk Distribution Monitor Reports for Retail Advice In-force and New Busi
Slide 12: Regaining of new business market share
Regaining of new business market share 25% growth in new business in FY23 with a 9% market share1,2 Challenger in IFA market from FY12 • Sales up 25% in FY23 (41% in 2H FY23) • New business market share up to circa 9%1,2 - above prior peak in FY19 • New business market share of 11% in Q4 FY23 Advice
Slide 13: Consistent YoY growth of in-force premium
Consistent YoY growth of in-force premium In-force portfolios should trend to higher new business share (over time) which underpins the growth profile FY26 Target3: ~4.0% market share and ~$375m of gross Strong track record of in-force Advice In-force ($m) and Market Share1,2 (%) premium in premium
Slide 14: Leads to gross premium income growth
Leads to gross premium income growth Gross Premium income broadly represents the average in-force premiums between periods FY26 Target1: $400m of gross premium Gross Premium - $m in total across channels 400.0 Consistent year on year top line growth +9% Recurring revenue base 325.1 299.6 $325m 278.2
Slide 15: Drives underlying profit growth
Drives underlying profit growth Record FY23 Life Insurance Underlying NPAT1 up 38% yoy; Underlying Life NPAT margin2 of 12.4% FY26 Target3: 11% -13% Underlying Structural changes and transformation Life Underlying NPAT1 ($m) and Margin2 (%) NPAT margin3 program of work continue to support earnings g
Slide 16: 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 Net Assets - $m Net Capital Position3 - $m $485.3 $123.2 Investment in highly rated interest portfolio externally managed
Slide 17: Capital generation
Capital generation The life insurance in-force portfolios generate significant cash flows which is subsequently reinvested into new business generation ClearView is now generating circa $70m of capital (before tax) from its in-force Life Insurance Underlying Before Tax3 Capital Generation1 - $m port
Slide 18: Embedded value at 30 June 2023
Embedded value at 30 June 2023 Embedded value represents the discounted cash flow of in-force portfolio – no new business is included in the calculations Discount rate 7% 8% 9% Risk margin over risk free rate2 3% dm 4% dm 5% dm Risk free rate has been increased to ($M), (unless otherwise stated) 4%
Slide 19: AASB 17
AASB 17
Slide 20: AASB 17 implementation
AASB 17 implementation Consistent with all insurers4, ClearView is implementing the new insurance accounting standard, AASB 17 - Insurance Contracts, effective 1 July 2023. Represents a material change in the accounting of life insurance contracts AASB 17 does Key changes Stepped premium 30 June 202
Slide 21: Outlook
Outlook
Slide 22: Business outlook
Business outlook ClearView is expected to benefit from operating in an improving (growing) market and continuing to outperform its peers – business now reflects a growth profile post a period of investment and simplification of the business Increasingly Simplified Leadership Continued Seeking to Res
Slide 23: Financial outlook
Financial outlook Record FY23 result, with Underlying NPAT up 41% to $36.5m - reflective of business momentum. FY23 final cash dividend of 3cps, up 50% Near-term Strong balance Consistent with all FY23 result Further growth Inflation-linked economic outlook sheet and capital insurers1, reflects in n
Slide 24: FY24 outlook
FY24 outlook Key FY24 focus areas Key FY24 operational objectives • Continued focus on life insurance and business simplification • Continued capability uplift - new leaders across key business areas • Completion of exit from wealth management business • Technology transformation – workflow and port
Slide 25: Glossary
Glossary AFSL Australian Financial Service Licence; AR is an authorised representative Underlying NPAT Underlying NPAT consists of consolidated profit after tax excluding amortisation, the effects of changing discount rates on policy liabilities and costs considered unusual to the Group’s ordinary a
Slide 26: 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 26
Slide 27: Appendix ESG
Appendix ESG
Slide 28: Our approach to ESG
Our approach to ESG Our vision is to support Australians to achieve their financial and wellbeing goals, and be a positive force for our staff, community and the environment. This vision lies at the heart of our Corporate Social Responsibility (CSR) strategy which reinforces our commitment to our Pe
Slide 29: Our CSR priorities
Our CSR priorities Aligned to the United Nations sustainable development goals relevant to our business operations. SDG Goal UN targets What ClearView is doing Our Environmental actions Take urgent action to combat climate change and its impacts (13.3) • Convert our motor vehicle fleet to 100% hybri
Slide 30: Appendix Additional Financial Information
Appendix Additional Financial Information
Slide 31: Consolidated FY23 results: Reconciliation of Underlying NPAT to Reported NPAT
Consolidated FY23 results: Reconciliation of Underlying NPAT to Reported NPAT1 2020 2021 2022 2023 % Consolidated Profit or Loss¹ 1H 2H FY20 1H 2H FY21 1H 2H FY22 1H 2H FY23 Change2 Gross life insurance premiums 129.0 131.0 260.0 138.4 139.8 278.2 147.6 152.1 299.6 160.0 165.2 325.1 9% Interest and
Slide 32: FY23 Result - Life insurance
FY23 Result - Life insurance 2020 2021 2022 2023 % Life Insurance Profit or Loss 1H 2H FY20 1H 2H FY21 1H 2H FY22 1H 2H FY23 Change1 Gross life insurance premiums 129.0 131.0 260.0 138.4 139.8 278.2 147.6 152.1 299.6 160.0 165.2 325.1 9% Interest Income 1.0 1.3 2.3 0.9 1.2 2.1 0.7 1.6 2.3 4.2 5.8 10
Slide 33: FY23 Result - Life insurance
FY23 Result - Life insurance 2020 2021 2022 2023 % Analysis of Profit ($M) 1H 2H FY20 1H 2H FY21 1H 2H FY22 1H 2H FY23 Change2 Expected Underlying NPAT1 15.5 15.3 30.8 14.3 13.0 27.3 13.7 13.5 27.2 17.9 18.2 36.1 33% Claims experience (4.7) (7.8) (12.5) 3.2 1.0 4.2 0.5 2.9 3.4 0.8 1.5 2.3 -32% Lapse
Slide 34: FY23 Result - Listed/Group Segment
FY23 Result - Listed/Group Segment 2020 2021 2022 2023 % Listed Profit or Loss 1H 2H FY20 1H 2H FY21 1H 2H FY22 1H 2H FY23 Change1 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 -6% Interest on debt & facility fees (0.4) (0.6) (0.9) (1.0) (1.8) (2.8) (1.9) (2.0) (3.8) (2.6) (2.8) (5
Slide 35: FY23 Result - Wealth Management – Discontinued Operation
FY23 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 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 -29% Interest Income 0.3 0.2 0.5 0.1 0.3 0.4 0.0 0.0 0
Slide 36: Balance Sheet, Embedded value and capital position at June 2023
Balance Sheet, Embedded value and capital position at 30 June 2023
Slide 37: Balance sheet as at 30 June 2023
Balance sheet as at 30 June 2023 Consolidated Balance Sheet (shareholder view)1 Commentary2 FY23 FY22 Net Asset and Capital Position Assets • Net assets (pre-ESP loans) of $485.3m, prior to $19.8m FY23 cash Cash and cash equivalents 123.2 119.0 dividend Investments 393.7 385.1 • Stated prior to IFRS
Slide 38: Embedded Value movement analysis
Embedded Value movement analysis Embedded Value1,2 Waterfall: FY22-FY23 ($M) Restatement of wealth management EV to net assets has a -$19.3m impact 1. Embedded Value at 4% discount rate margin, including a value for future franking credits, accrued franking credits and Employee Share Plan (ESP) loan
Slide 39: EV movement analysis @ 4% DM by segment at 30 June 2023
EV movement analysis @ 4% DM by segment at 30 June 2023 MOVEMENT ANALYSIS @ 4% dm Life Wealth Other Total EV - 30 June 2022 @ 4% dm (As Published) incl Franking Credits and ESP Loans 541.9 46.1 17.0 605.0 Restatements/modeling difference 2.1 (19.2) — (17.2) Dividends paid — — (13.0) (13.0) Capital t
Slide 40: EV sensitivity analysis @4% DM
EV sensitivity analysis @4% DM1 EV Sensitivity Analysis - Life @ 4% dm ($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 41: 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 42: End
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