More annual reports from ClearView:
2023 ReportAnnual Report
2023
Contents
4 Chairman’s address
7
9 Directors’ report
16 Operating and financial
38 Operating segment review
50 Remuneration report
review
76 Auditor’s independence
declaration
Managing Director’s report 78 Financial report
167 Directors’ declaration
168 Independent auditor’s report
176 Shareholders’ and Note
178 Directory
holders’ information
Financial calendar
Annual General Meeting
9 November 2023
Half year end
31 December 2023
Year end
30 June 2024
Annual Report
August 2024
Half year result announcement
February 2024
Dates are subject to change.
Chairman’s
address
Geoff Black
On many fronts, 2023 was an exciting and challenging
year for ClearView.
Uncertainty around the economic outlook, rising
interest rates and the high cost of living dominated
the headlines in 2023, creating challenges for
governments, corporates and households.
While ClearView continues to grow strongly and build
market share, the business is not immune to global
economic challenges including inflation which remains
stubbornly high in Australia. This is placing pressure on
household budgets which has been painful for many
customers and, more generally, consumers.
For our customers, indexation is a key benefit,
ensuring that their insurance benefits keep pace with
the rising cost of living so they are able to meet their
financial obligations and cover expenses, in the event
of a sudden accident, illness or premature death.
Pleasingly, in FY23 we did not see signs of related
economic stress in our portfolio. This was likely driven
by Australia’s relatively low unemployment rate and
the fact that a significant portion of the life insurance
portfolio is funded from superannuation. In FY24,
we will continue to closely monitor the direction of
interest rates and their impact on household budgets.
ClearView will also continue to focus on customer
retention and claims management.
As a life insurance company, ClearView has been a
beneficiary of rising interest rates, earning higher
yields on our capital and investments. The majority of
insurance policies are also inflation indexed, resulting
in higher gross premiums.
The successful positioning of the group’s flagship
product series, ClearView ClearChoice, and ongoing
repricing of parts of the existing portfolio has
delivered another significantly improved financial
result. The Group achieved a 41% increase in
Underlying NPAT of $36.5 million for the year to 30
June 2023.
ClearView’s outperformance reflected ongoing
improvements in claims management and policy
retention. This contributed to a further improvement in
underlying NPAT margin to 12.4% of gross premium.
In addition to solid growth in inforce premiums and
strong investment returns, IFA support for ClearView
ClearChoice is building.
In FY23, new business annualised premium increased
25% to $25.2 million, boosting ClearView’s share
of the retail life insurance market to 9.2%. This is a
very strong result, particularly since new business
premiums across the market declined over the same
period, due to Australians having limited access to
good advice and the declining the number of financial
advisers providing risk advice.
To make it more attractive for experienced advisers
to stay in the industry and encourage new entrants,
ClearView is highly supportive of reforms designed to
simplify the advice process and reduce the compliance
burden on advice providers. We continue to partner
with industry bodies to make advice accessible and
affordable to more Australians.
Spotlight on sustainability
ClearView has embraced sustainability measures in
its product development and product management,
particularly in Individual Disability Income Insurance.
ClearView ClearChoice was launched in September
2021, as part of broad changes to ensure life insurance
products are fit-for-purpose, fair and sustainable.
Early data suggests that ClearView ClearChoice is
successfully addressing the sustainability problems
encountered in the industry under previous product
offerings.
In response to the positive FY23 results, plans are
underway to increase ClearView’s exposure to
underwriting risk, thereby reducing reinsurance
4
ClearView Annual Report 2023
Directors’ report costs. This move reflects ClearView’s confidence
in the product sustainability measures that have
been implemented and the strong risk management
disciplines in place. Across the business, there is a
strong risk culture and broader capabilities have been
developed including data management, which will lead
to further improvements in profit margins over time.
Ongoing simplification and
transformation
As previously announced, ClearView is in the process
of transitioning into a pure life insurance business. Our
focus is on optimising the business from our existing
position, with improved efficiencies and margin
management.
The group’s strategic review, which concluded in
November last year, determined that ClearView should
exit Wealth Management, given the Wealth business’
limited growth options in an industry where scale is
vital to succeed. Despite good progress in recent years
to simplify and streamline the Wealth Management
business, the Board recognised a need for dedicated
focus and investment to achieve the requisite scale. It
determined that the divestment of the wealth business
would deliver the best long-term outcomes for all
stakeholders.
The divestment is expected to complete in FY24. Upon
completion, ClearView will be a simpler business with
a sharp focus on becoming a significant player in the
Australian life insurance market.
Dividends and capital
The Board has declared a final fully franked dividend
of 3cps for FY23, up from 2cps in FY22.
The net surplus capital position of the group above
internal benchmarks was $27.5 million, as at 30
June 2023, and is stated prior to the FY23 final cash
dividend.
ClearView’s capital position is strong and future
growth plans will be funded by positive cashflows
from the group’s inforce portfolio and the exit
of Wealth Management. This will also offset the
full impact of the group’s ongoing investment in
technology including upgrades to the new policy
administration platform.
AASB 17
Effective 1 July 2023, ClearView is required to comply
with accounting standard, AASB 17. This new standard
will materially change the way life insurance contracts
are accounted for. The purpose of this change is to
enable better comparability between companies. It
does not impact the fundamental economics of the
business but profit variability over the life of individual
contracts could result in there being an increased
volatility of profit for the business from year to year.
The first reported year under AASB17 will be FY24.
Smooth leadership transition
Simon Swanson, ClearView’s founder and Managing
Director, retired on 30 June 2023 after 13 years in
the role. Simon’s energy, persistence and vision
built ClearView into the organisation it is today. He
leaves a business that is well positioned to flourish
and grow in the years ahead. Over the years, Simon
has been an avid campaigner for higher financial
literacy, stronger consumer protections and reforms to
underpin a vibrant life insurance industry. I would like
to acknowledge and thank Simon for his significant
contribution.
I am delighted with the appointment of Nadine
Gooderick as Managing Director. As ClearView focuses
on its core business of life insurance, Nadine will bring
a very disciplined approach focusing on operational
excellence and strategy execution. Being an internal
appointment, Nadine will ensure ClearView retains its
unique cultural strengths and the momentum behind
the group’s transformation program is not disrupted.
Acknowledgements
Sadly, the past year was also tinged with sadness.
Susan Young, who served as a Non-executive Director
on the Board of ClearView Wealth Limited from
2016 until March 2023, as well as several sub-boards,
passed away shortly after her retirement from the
ClearView Board. Susan was an incredibly intelligent,
generous and dedicated director, who had a warm
and approachable personality. Her contribution to
ClearView was very much appreciated by her fellow
Board directors and members of the leadership team.
I would also like to thank ClearView’s broader
executive leadership team for their ongoing
commitment to executing the group’s strategy, in the
midst of change and challenging market conditions.
Similarly, the Directors of ClearView’s subsidiary
boards have managed a heightened workload in the
past year, as a number of necessary transformation
initiatives were implemented. The additional time
demands placed on the Directors related to these
entities has been significant and their continuous
commitment is much appreciated.
Finally, I would like to thank my fellow Directors on
the ClearView Board for their support throughout the
year and welcome the newest board member, Edward
Fabrizio.
ClearView Wealth Limited
5
Directors’ report Edward joined the Board on 28 June 2023 and is a member of all Board committees and the
Chair of the audit committee. As an actuary and former Australian Chief Executive Officer of
a global reinsurer, his professional experience and deep understanding of the life insurance
industry will be invaluable as ClearView positions itself as a dedicated Australian life insurance
company.
Geoff Black
Chairman
6
ClearView Annual Report 2023
Directors’ report
Managing
Director’s report
Nadine Gooderick
I am excited and honoured to lead ClearView having
taken the reins from Simon Swanson on 1 July 2023.
The outlook for the life insurance market is positive
as the industry seeks to grow by offering customer
focused, sustainable products which meet the needs
of Australians when they most need support.
ClearView is a robust and nimble life insurance
company. The group’s strong FY23 result reflects
material growth across every key metric, against
the backdrop of improving life insurance market
conditions. Our refreshed strategy is focused on
leveraging our competitive advantage in life insurance
to achieve our goal of becoming a top player in the
Australian market.
Our decision to re-set and transform the business in
early 2020 by simplifying and investing in our systems,
processes and technology, as well as expanding our
people capability, is starting to deliver efficiencies,
productivity gains and scale benefits. Critically, it is
future-proofing our business.
Since joining ClearView in 2020 as General Manager,
Transformation, and more recently stepping into the
role of Managing Director, I have seen ClearView’s
unique, collaborative and customer-centric culture at
play. The many talented people at Clearview come
together to share insights, solve problems, and serve
customers every day.
In FY23, this collaborative culture was demonstrated
as teams worked together to roll out enhancements
to our flagship product series, ClearView ClearChoice;
build out the functionality of our Policy Administration
System; and refresh the customer claims journey.
Other achievements included improvements in our
cyber security framework; underwriting; ongoing
customer retention and lapse management initiatives;
employee programs to boost mental health and
wellbeing; and compliance under the new international
standard for insurance contracts, AASB 17.
Strength in Life - Claims and
Product
Since joining ClearView, I have had the privilege of
meeting many of the professional financial advisers
and business partners who recommend our products
and solutions.
Learning about their businesses and hearing their
stories has only reinforced my belief that good advice
changes lives. It helps customers understand their
financial position, set goals, and develop and stick to
a plan to maximise the probability of achievement,
and critically, ensures individuals and their families
are financially protected in the unfortunate event of a
sudden accident or illness, or premature death.
In FY23, ClearView paid $127.2m in life insurance claim
entitlements to around 1030 customers.
We were there for our customers at their most
vulnerable, reflecting our claims philosophy to pay
benefits as quickly as possible and treat customers
and their families kindly and responsively.
I am pleased that ClearView’s reinvigorated executive
leadership team includes an experienced senior claims
executive in Joanne Faglioni, who joined ClearView
in 2021 as Chief Claims Officer and was elevated to
Group Executive, Operations on 1 July, 2023.
As an organisation focused on delivering operational
excellence, Joanne is the ideal person to oversee and
drive improvements across the core life insurance
functions of underwriting, claims and rehabilitation.
Nick Kulikov has also joined the executive leadership
team as Group Executive, Product and Pricing,
with responsibility for ensuring that our product
suite remains relevant and sought after, in a highly-
competitive, fast-moving life insurance market. As an
experienced and well-rounded actuary, Nick also leads
our data and analytics team. Through data analysis
and the sharing of deep insights, our goal is to ensure
ClearView Wealth Limited
7
Directors’ report that ClearView can swiftly identify and capitalise on
growth opportunities arising from structural change.
These new additions round out an already strong
executive leadership team that has continuity of
knowledge, particularly in the areas of financial
management, risk, compliance and legal.
The executive leadership team changes are designed
to deliver on our new strategy while ensuring clearer
lines of accountability. It strengthens our focus on
the key success driver of ‘Managing the Margin’ by
bringing underwriting, pricing, product, data analytics
and distribution closer together and then ensuring
stronger collaboration with claims, operations and the
retention management teams to deliver the highest
standard of service to our customers.
Simplification and operational
excellence leading to sustainable
growth
Recently, the executive leadership team and I shared
ClearView’s refreshed strategy and priorities to around
50 of the group’s key leaders. We also listened to
their experiences, observations and ideas. Across the
business, there is a sense of purpose, optimism and
excitement about ClearView’s single-minded focus on
life insurance and the opportunities to better serve our
customers.
We are supportive of the Quality of Advice
reforms, which seek to make advice affordable and
accessible to more Australians. As a proud member
of the Council of Australian Life Insurers, ClearView
will continue to advocate for public policy that
strengthens consumer protections and supports a
vibrant financial advice and life insurance industry.
We are exploring emerging opportunities beyond our
existing channels to help more Australians obtain high
quality, adequate life insurance cover.
Acknowledgements
Firstly, I would like to thank Simon Swanson for his
generous support, over the past three years and,
in particular, the last three months. He has spent
countless hours sharing information and knowledge,
and introducing me to key business partners and
industry contacts to ensure a smooth leadership
transition.
He is an inspiring leader whose understanding of the
life insurance industry is unparalleled and I wish him all
the very best in his future endeavours.
I would also like to thank the executive leadership
team for their support and encouragement. They have
provided invaluable counsel and I look forward to
working more closely together to achieve our vision
to support Australians to achieve their financial and
wellbeing goals while being a positive force for our
staff, community and the environment. I would also
like to thank the staff for their dedication, hard work
and effort over FY23 and look forward to working
together to achieve our goals.
Finally, I would like to thank the ClearView Board for
trusting me to lead this dynamic company and for
supporting me to take ClearView into its next exciting
phase of growth.
Looking ahead, our three-year plan is built on the four
pillars of protect, optimise, diversify and explore.
Nadine Gooderick
Managing Director
We are focused on protecting and optimising our
existing position as a dynamic challenger in the life
insurance market that differentiates by being easy to
do business with and continuing to deliver a superior
customer experience.
To ensure ClearView continues to grow and meet
the current and future needs of our customers and
stakeholders, we must stay curious and constantly
look for opportunities to expand our offer, extend our
relationships and diversify our revenue and risk.
8
ClearView Annual Report 2023
Directors’ report Director’s
report
The Directors of ClearView Wealth Limited (ASX:CVW,
ClearView or the Company) submit their report, together
with the financial report of the consolidated entity (the
Group) for the year ended 30 June 2023 (the financial
year):
Directors
The following persons were Directors of ClearView
during the financial year and since the end of the
financial year unless otherwise noted:
• Geoff Black (Chair)
• Michael Alscher
• Gary Burg
• Edward Fabrizio (Appointed on 28 June 2023)
• Nadine Gooderick (Appointed as Managing Director
on 1 July 2023)
• Jennifer Lyon
• Simon Swanson (Resigned as Managing Director on 1
July 2023)
• Nathanial Thomson
• Eloise Watson (Alternate Director to Nathanial
Thomson, appointed on 15 December 2022)
• Susan Young (Resigned as Director on 31 March
2023)
ClearView Wealth Limited
9
Directors’ report Current directors
The biographies for the Directors of ClearView are detailed below.
Geoff Black BCom
Independent non-executive Chair
Geoff has over 30 years’ experience in life insurance and wealth
management and is currently a director of Platypus Asset Management
and was Head of Business Development at RGA Australia from 2015 until
April 2019. Prior to joining the ClearView Board he held senior executive
positions at RGA Australia, TAL Australia and was formerly Managing
Director of PrefSure Life and Lumley Life Limited. Geoff holds a Bachelor
of Commerce from the University of Canterbury, Graduate Diplomas
in Management and Financial Planning and is a Certified Practicing
Accountant.
Geoff was appointed to the Board on 25 November 2019 and appointed
as Chair of the Board on 1 July 2020. Geoff is also a member of the
Board Audit Committee, Board Risk and Compliance Committee and the
Nomination and Remuneration Committee.
Gary Burg B.ACC (Wits), MBA (Wits)
Independent non-executive Director
Gary has significant experience in building life insurance businesses in
South Africa and in Australia. Gary is Chairman of Edu Holdings Limited,
an ASX listed company and various unlisted companies including Global
Capital Holdings (Australia) Pty Limited, a company which manages
principal investments on behalf of various investors on behalf of third
parties.
Gary was appointed to the Board on 22 October 2012, and currently
serves as a member of the Board Audit Committee, the Board Risk
and Compliance Committee and the Nomination and Remuneration
Committee.
Nathanial Thomson BCom (Hons), LLB (Hons)
Non-executive Director
Nathanial is a partner of Crescent Capital Partners Management Pty
Limited. Nathanial has significant consulting experience for financial
institutions at McKinsey & Co. He is the former deputy Chairman of Cover-
More Group Limited prior to its listing on the ASX, a former Director of
Metro Performance Glass Limited, prior to its listing on the ASX, and is
currently a Director of Cardno Limited, Australian Clinical Labs Limited,
National Dental Care Limited, National Home Doctor Service Pty Limited
and Clover Insurance Pty Limited.
Nathanial was appointed to the Board on 22 October 2012 and currently
serves as a member of the Nomination and Remuneration Committee.
10
ClearView Annual Report 2023
Directors’ report Michael Alscher BCom
Non-executive Director
Michael is the Managing Partner and founder of Crescent Capital Partners
Management Pty Limited. Prior to founding Crescent Capital Partners,
Michael was a consultant at Bain International and the LEK Partnership
where he spent considerable time working across banking and insurance
clients. After leaving consulting, Michael was the Chief Operating Officer
and a Director of Gowings Bros Limited. Michael is the current Chairman of
Cardno Limited, Australian Clinical Labs Limited, National Media Services
Group Limited, National Dental Care Limited and 24-7 Healthcare Pty Ltd.
Michael is also a Director of Aurora Expeditions Holdings Pty Ltd, Emapta
Australia Pty Ltd and Green Leaves Early Learning Centres Pty Ltd.
He is also a former Chairman and Director of Cover-More Group Limited
and LifeHealthCare Group Limited, and a former Director of Metro
Performance Glass Limited, Crumpler Pty Limited and Intega Group
Limited.
Michael has served as a Non-Executive Director since 22 October 2012
and currently serves as a member of the Nomination and Remuneration
Committee.
Jennifer Lyon BSc (Maths) (Hons), FIAA, GAICD
Independent non-executive Director
Jennifer is an experienced actuary, small business owner and Director. She
was a founding owner of recruitment firm SKL Executive and served as a
Director until December 2020. Jennifer has also formerly held a number
of senior and Director positions including non-executive Director and
President of the Actuaries Institute of Australia, Managing Director of
QED Actuarial, a specialist actuarial recruitment firm, a Director of Hall &
Lyon which managed the distribution of actuarial education material, and
worked at AMP and Towers Perrin in superannuation and financial services.
Jennifer has also served on the Board of ClearView’s superannuation
trustee board, ClearView Life Nominees Pty Ltd since 1 July 2014 and
acted as Chairperson from December 2016 to July 2020. Jennifer was
appointed to the Board on 1 July 2020 and is a member and Chair of
both the Board Risk and Compliance Committee and the Nomination and
Remuneration Committee, and a member of the Board Audit Committee.
Edward Fabrizio Bec, MBA, FIAA, FAICD
Independent non-executive Director
Edward is an experienced life insurance actuary with over 30 years’
experience and has been operating his own actuarial consulting business
since 2016. Prior to joining the ClearView Board he was the Managing
Director of General Reinsurance Life Australia, a Non-Executive Director
and Council Member of the Institute of Actuaries of Australia, Director in
KPMG’s Actuarial practice as well as the Appointed Actuary for various life
insurance and reinsurance companies.
Edward was appointed to the Board on 28 June 2023, and is Chair of
the Board Audit Committee and a member of both the Board Risk and
Compliance Committee and Nomination and Remuneration Committee.
ClearView Wealth Limited
11
Directors’ report Nadine Gooderick BCom
Managing Director
Nadine was appointed as Managing Director of ClearView on 1 July 2023.
She is a proven life insurance leader with extensive experience managing
international programs and leading large diverse teams across different
functions and markets.
Nadine joined ClearView in October 2020 as General Manager,
Transformation. In August 2022, she as appointed as Group Executive
- Technology and Development, with responsibility for ClearView’s
technology, data and marketing functions.
Since joining ClearView, Nadine’s key achievements include establishing
and executing the Group’s transformation program. Nadine was
instrumental in overseeing the launch of the Group’s new enterprise policy
administration system and underwriting rules engine.
Prior to joining ClearView, Nadine spent almost 25 years at RGA
Reinsurance, including the last eight years as Chief Operating Officer
for Australia and New Zealand from 2011 to 2019. In that role, she had
responsibility for the key functions of underwriting, medical and technical
services, claims and operations as well as project management. Prior to
that, Nadine was Vice President, Asia Pacific Regional Office.
At RGA, Nadine’s career highlights include the start-up of several of RGA’s
International Offices as part of the group’s global expansion into Asia and
Europe as well as the delivery of a substantial, multi-year transformation
program for the management of disability income and TPD insurance
claims; and the delivery of an end-to-end group administration system
over two years.
Former Managing Director
Simon Swanson BEC, BBus, ANZIIF (Fellow), CIP, FCPA
Simon was the Managing Director of ClearView, from 26 March 2010 to 1
July 2023 and is the organisation’s effective founder in its current form.
He is also a director of ASX listed Centrepoint Alliance Limited (ASX:
CAF) following his appointment on 1 November 2021.
Simon is an internationally experienced financial services executive
having worked across life insurance, funds management, financial
advice, general insurance and health insurance for over 35 years. Simon
has spent half of his career in the Asia Pacific region, during which he
successfully led three of the largest life insurers (CommInsure, Sovereign
and Colonial).
Simon was previously a director of the Australian Literacy and Numeracy
Foundation and former Chairman of ANZIIF’s Life, Health and Retirement
Income Faculty Advisory Board.
12
ClearView Annual Report 2023
Directors’ report Company Secretary
Judilyn Beaumont, B.Bus, LLB joined ClearView in November 2019 as General
Counsel and Company Secretary.
Appointed a Solicitor of NSW in 2001, Judilyn has extensive legal
experience in the financial services industry acquired across private practice,
regulatory and in-house roles. These roles have encompassed life insurance,
superannuation, financial planning and investments.
From 2013-2019 Judilyn worked in-house at Suncorp, commencing as Senior
Lawyer (Suncorp Life) and most recently holding the position of Executive
Manager Legal – Insurance and Marketplace Advisory, Finance Legal & Advice
(Suncorp Group). In this role she provided end-to-end business support, from
product development to marketing and distribution.
Earlier in her career, she was a Senior Associate at Freehills in their financial
services team, a Solicitor at Blake Dawson Waldron (now Ashurst) and
earlier still, a Lawyer at the Australian Securities and Investment Commission
where she provided advice on a range of matters including large regulatory
investigations, development of regulatory policy and managed investment
schemes.
Directorships of other listed companies
Directorships of other listed companies held by Directors in the three years preceding the end of the financial year
are as follows:
Name
Gary Burg
Company
Edu Holdings Limited
Michael Alscher
Cardno Limited
Period of Directorship
24 March 2016 – current
6 November 2015 – current
Intega Group Limited
20 August 2019 – 17 December 2021
Australian Clinical Labs Limited
14 May 2021 – current
Nathanial Thomson
Cardno Limited
6 November 2015 – 28 January 2016;
and 24 May 2016 – current
Simon Swanson
Centrepoint Alliance Limited
1 November 2021 - current
Australian Clinical Labs Limited
14 May 2021 – current
ClearView Wealth Limited
13
Directors’ report Meetings of Directors
The number of meetings of the Company’s Board of Directors and of each Board Committee held during the year
ended 30 June 2023, and the number of meetings attended by each Director are as follows:
Board
Board Audit
Committee
Board Risk and
Compliance
Committee
Nomination and
Remuneration
Committee
Eligible to
attend
Eligible to
Eligible to
Eligible to
Attended
attend
Attended
attend
Attended
attend
Attended
15
15
15
15
15
13
—
15
6
15
14
9
11
15
13
—
15
5
6
6
—
—
6
5
—
—
—
6
6
—
—
6
5
—
—
—
4
4
—
—
4
3
—
—
—
4
4
—
—
4
3
—
—
—
6
6
6
6
6
4
—
—
3
6
5
2
5
6
4
—
—
1
Geoff Black
Gary Burg
Michael Alscher
Nathanial Thomson
Jennifer Lyon
Susan Young1
Edward Fabrizio2
Simon Swanson3
Eloise Watson (Alternate to
Nathanial Thomson)4
1 Resigned 31 March 2023,
2 Appointed 28 June 2023.
3 Resigned 1 July 2023.
4 Appointed 15 December 2022.
Directors’ shareholdings
The following table sets out each Director’s relevant interest in shares and rights or options in shares of the
Company or a related body corporate as at the date of this report.
Director
Geoff Black
Gary Burg
Michael Alscher1
Nathanial Thomson1
Jennifer Lyon
Edward Fabrizio
Nadine Gooderick
Fully Paid Or-
dinary Shares
Executive Share
Plan Shares
100,000
10,918,090
—
—
27,212
—
63,212
—
—
—
—
—
—
—
Performance Rights2
Restricted Rights3
FY21
FY22
FY23
FY22
FY23
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
62,481
277,777
256,410
28,745
63,756
1 Mr Alscher and Mr Thomson represent the interests of CCP Bidco Pty Limited and its Associates that non-beneficially hold 399,543,860 shares.
LTVR Performance Rights with vesting dates of 30 June 2024, 30 June 2025 and 30 June 2026.
STVR Restricted Rights with vesting dates of 30 June 2024 and 30 June 2025.
2
3
14
ClearView Annual Report 2023
Directors’ report Indemnification of Directors and Officers
During the period, the Company purchased Directors and Officers Liability Insurance to provide cover in respect
of claims made against the Directors’ and Officers’ in office during the financial period and as at the date of this
report, as far as is allowable by the Corporations Act 2001.
The total amount of insurance premium paid and the nature of the liability cover provided are not disclosed due
to a confidentiality clause within the contract.
Directors’ and Officers’ Liability Insurance contributed a proportion of the total Group professional indemnity
insurance premium.
The Company has not, during or since the financial period, indemnified or agreed to indemnify the auditor of the
Company against a liability incurred as an auditor.
Rounding of amounts
The Company is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument
2016/191, dated 24 March 2016 and in accordance with that Corporations Instrument amounts in this report, and
the financial report, have been rounded off to the nearest thousand dollars.
Auditor’s independence declaration and non-audit services
The Directors have received an independence declaration from the auditors, a copy of which is on page 76.
Non-audit services
Details of amounts paid or payable to the auditor for non-audit services provided during the year by the auditor
are outlined in section 2 to the financial statements.
The Directors are satisfied that the provision of non-audit services, during the year, by the auditor (or by another
person or firm on the auditor’s behalf) is compatible with the general standard of independence for auditors
imposed by the Corporations Act 2001.
The Directors are of the opinion that the services as disclosed in section 2.6 to the financial statements do not
compromise the external auditor’s independence, based on advice received from the Board Audit Committee, for
the following reasons:
• All non-audit services comply with the ClearView audit independence policy and have been reviewed and
approved to ensure that they do not impact the integrity and objectivity of the auditor; and
• None of the services undermine the general principles relating to auditor independence as set out in Code
of Conduct APES 110 ‘Code of Ethics for Professional Accountants’ issued by the Accounting Professional &
Ethical Standards Board, including reviewing or auditing the auditor’s own work, acting in a management or
decision-making capacity for the Company, acting as advocate for the Company or jointly sharing economic
risks and reward.
Annual Corporate Governance Statement
ClearView is committed to achieving high corporate governance standards. In accordance with the 4th edition
ASX Corporate Governance Council’s Principles and Recommendations, the Company’s annual Corporate
Governance Statement, as approved by the Board, is published and available on the Company’s website at:
https://www.clearview.com.au/governance.
ClearView Wealth Limited
15
Directors’ report Operating and
Financial Review
The Board presents its FY23 operating and financial review to provide shareholders with an overview of the
Company’s operations, business strategy, financial position and prospects for the future. This review complements
the financial report and has been prepared to provide useful and meaningful information.
ClearView Wealth Limited (ClearView or the Company) is an APRA-registered non-operating holding company
(NOHC) of regulated wholly owned subsidiaries that offer life insurance, superannuation and investments
products and services as at the date of this report.
The Group’s subsidiaries hold a number of licences enabling them to operate across two business segments:
• Life Insurance: ClearView Life Assurance Limited (CLAL) manufactures ClearView life insurance products under
a retail life insurance Australian Financial Services (AFS) licence.
• Wealth Management: ClearView Financial Management Limited (CFML), ClearView Life Nominees Pty
Limited (CLN) and CLAL manufacture these investment and retirement solutions (managed investments and
superannuation) under AFS licences and a registrable superannuation entity (RSE) trustee licence.
During the year, the Board initiated a strategic review in the wealth management segment to seek out and pursue
opportunities to reset and simplify the business with the ambition of retaining its core focus on being a life risk
insurance provider. The Board is committed to the exit of the wealth management business given its lack of scale
and limited growth options. Further details are provided later in the report.
ClearView strategy
ClearView’s vision is to support Australians to achieve their financial and well-being goals while being a positive
force for its staff, community and the environment.
ClearView is a strategically focused business on what ClearView does best: Life Insurance.
ClearView, within its core life insurance business, is focused on building on its existing capabilities whilst
concurrently diversifying its distribution channels and product offerings. ClearView’s future focus to achieve long-
term sustainable growth is based on:
• Remain a dynamic challenger
• Focus on operational excellence and strategy execution
• Divestment of advice and wealth management businesses to focus on life insurance
• A reliable and trusted brand
• Digital tools and AI options
• Exploring further growth opportunities
Protect
Optimise
Diversify
Explore
16
ClearView Annual Report 2023
Directors’ report ClearView commenced investing in a business transformation program in FY21 during the periods of change and
industry uncertainty (COVID-19 and industry structural issues).
FY22 reflected the overall shift in focus of ClearView back to growth, in line with the inflection point of the
industry, with the strong FY23 result reflecting the benefits of this transformation strategy and investment.
The aim of ClearView’s business transformation program has been to:
• Provide a better customer experience;
• Build a scalable foundation for future growth in the business;
• Align the business to the structural and regulatory changes in the market; and
•
Improve business efficiency and thereby improve margins.
The record FY23 financial performance is being driven by the transformation and simplification program as
outlined below:
Core
Life Insurance
• Restarted sales focus – now winning > 9% market share
Invested in technology, systems and processes – from
•
FY25 operational efficiencies are expected to start to flow
• Capability continues to be uplifted with a data and
analytics focus - deeper insights
• New product suite with sustainable pricing aligned to
industry structural changes
• Confidence to increase underwriting risk retention on new
product - key step change in business
Ancillary
Financial Advice
• Exit of direct ownership of
financial advice (Centrepoint
Alliance merger)
• Shifted from 100% ownership of
dealer groups (circa 230 ARs1) to
24.5% holding in scale operation
with over 500 ARs1 and support
services to a further 190
self-licenced adviser practices
• Strategic benefits, reduced
regulatory risk and profitability
achieved
Ancillary
Wealth Management
• Board committed to exit of wealth
business given lack of scale and
growth options
• Trustee considering options for
superannuation fund that will
inform roadmap and timing for
overall exit
• Strategic benefits, reduced
regulatory risk and removal of
drag on earnings
• ClearView is now a robust life focused business:
• Expected to support double digit Underlying NPAT growth
off AASB 17 FY24 base2
• Dividend policy 40%- 60% of Underlying NPAT - range to
be reviewed post completion of IT transformation and
wealth exit to reflect shift to a cash generation position
Key outcomes of the program of work have been as follows:
• Exit of the direct ownership of financial adviser networks with the sale of the businesses to Centrepoint
Alliance Limited (Centrepoint Alliance) in November 2021. The merger resulted in a minority holding in a
scaled, profitable business with over 500 ARs and support services to a further 190 self-licenced adviser
practices.
• Divestment of the wealth management business - the Board is committed to the exit of the wealth
management business including divestment of the funds management business. The superannuation
fund trustee, ClearView Life Nominees Pty Limited is, at the same time, considering a number of options
and the best way forward for the superannuation fund, ClearView Retirement Plan. The outcome of these
considerations will inform the roadmap and timing for the overall exit of the wealth management business.
Post exit of the wealth management business, ClearView will be a simplified and less complex business with a
focus on life insurance.
1
2
ARs are authorised representatives.
FY26 goals based on AASB 17 FY24-26 business plan forecasts – currently aligned to implementation program of work and subject to change. Stated prior to any
AIACF impairment charges on stepped premium business or loss recognition on level premium business.
ClearView Wealth Limited
17
Directors’ report • Launch of ClearView ClearChoice in October 2021 that includes a variety of sustainable new life insurance
products that are appropriately priced to earn a long term target return on capital (ROC). The product has
been well received by the market with new business market share of the IFA market increasing to circa 9% in
the year and new business up 25% to $25.2 million. ClearView has established a diversified distribution network
with over 900+ dealer groups comprised of 4,000+ advisers and remains well positioned to continue to
increase its new business market share.
• The repricing of the in-force portfolios (across the industry) remains a long term structural driver to
appropriately price for risk and experience (claims and reinsurance impacts) that should lead to in-force
growth and profitability. In January 2023, ClearView commenced a new repricing cycle on the ClearView
LifeSolutions portfolio to cover the cost of the reinsurance premium rate increases.
• Further development of the life insurance Policy Administration System (PAS) (launched in October 2021) with
the enhancement and build out of the technology platform continuing and tracking to plan. The program of
work initially prioritised the delivery of the adviser facing experience. The focus in the year has continued to
build out and enhance the back end functionality of the technology platform. The migration of the in-force
policies onto the functional new platform will allow for the achievement of operational efficiencies that are
expected to start flowing through from FY25.
• Continued investment in capabilities and people, with a data and analytics focus to assist deeper insights and
decision making. A significant capability uplift is ongoing with new leaders appointed across key business
areas.
• Plans are underway to increase ClearView’s exposure to underwriting risk for new business, thereby reducing
reinsurance costs and increasing sum insured retained that will result in higher new business profit over
time. This confidence to increase the underwriting risk exposure is due to the increased size of the in-force
portfolios, improved industry profitability and product sustainability measures seen in the Group’s performance
this year; and
• Continued improvement in the risk maturity profile of the business.
The pathway has now been established to grow to a life insurance FY26 target of circa $400 million of in-force
premiums at a target FY26 Underlying Life Insurance NPAT margin of 11%-13%1. ClearView has transitioned into a
robust life insurance focused business that is expected to support double digit Underlying NPAT growth off the
AASB 17 FY24 base.
The FY23 actual life insurance key performance indicators and FY26 goals are outlined below:
FY23
Actual
FY26
Goals
New Business
Market Share2,3
9.0%
Gross
Premiums
$325.1m
+9%
In-force Premium
Market Share2,3
3.2%
New Business
Market Share2
Gross
Premiums
In-force Premium
Market Share2
12-14%
$400m
~4%
Life Insurance
Underlying
NPAT Margin5,6
12.4%
Life Insurance
Underlying
NPAT Margin4
11-13%
FY23 Final
Dividend
54%
of Underlying NPAT5
Dividend
Policy
40-60%
of Underlying NPAT5
1
FY26 goals based on AASB 17 FY24-26 business plan forecasts – currently aligned to implementation program of work and subject to change.
2 ClearView calculations based on NMG Risk Distribution Monitor Reports for Retail Advice In-force and New Business Analysis for relevant periods – NMG Market NB
includes total of ‘Retail’ consistently applied (that is, IFA, Bank Advice and Aggregator channels)
3
4
FY23 new business market share based on NMG Risk Distribution Monitor Reports for Retail Advice New Business Analysis for the year ended 30 June 2023.
Is calculated as Life Insurance Underlying NPAT divided by Gross Premium Income. Under AASB 17 basis and stated prior to any AIACF impairment charges on
stepped premium business or loss recognition on level premium business.
5 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 activities. Includes amortisation of capitalised software and leases, underlying investment income and interest costs associated with
corporate debt and Tier 2 Capital. Costs associated with the incurred claims treaty are reflected as part of reinsurance costs.
6
Is calculated as Life Insurance Underlying NPAT divided by Gross Premium Income. FY23 based on accounting standards on issue – the margin on services approach
under AASB 1038.
18
ClearView Annual Report 2023
Directors’ report Key focus areas to drive the financial performance of
the business are as follows:
further consultation will be required on certain
matters.
• Acquisition cost improvements thereby further
increasing new business margins;
• Maintenance cost improvements thereby increasing
in-force margins;
• Higher interest rate environment thereby
increasing profitability on capital held to support
new business and the in-force portfolios;
• Continued market outperformance in profitable
segments including further market share gains; and
• Further repricing of in-force retail income
protection portfolios to realign pricing to risk and
experience which would further improve in-force
margins.
The significant further growth opportunities for the
business, post simplification, include but are not
limited to:
• Entering into new customer channels to support its
core IFA market channels; and
• Other opportunities that support this overall life
insurance focused strategy.
Regulatory environment
The financial services industry continued to face
significant regulation, scrutiny and disruption, due to
shifting customer and regulator expectations.
Throughout the next few years, regulators are
expected to increase their supervision and
enforcement activities to ensure appropriate design
and distribution of products, accurate disclosure
on sustainability, consideration of cyber risk,
management of claims handling and complaints
processes.
The Council of Australian Life Insurers (CALI), of
which ClearView is a foundation member, has been
established to act as a progressive voice for the
Australian life insurance industry and is committed
to improving customer outcomes and implementing
higher standards as well as promoting financial
sustainability of the life insurance industry.
The Financial Accountability Regime reform, once
implemented, is expected to strengthen accountability
obligations on directors and senior executives in
financial services.
The Quality of Advice Review was completed in
December 2022 and contained 22 recommendations
covering several aspects of financial services,
including the removal of red tape and the
opportunities for new channels for advice. The
Government’s initial response in June 2023 accepted
a number of the recommendations and suggested
Regulatory reform
ClearView has implemented several regulatory and
legislative industry reforms over the course of the
financial year period and continues to progress
those that will come into force in 2023. The reforms
implemented include the changes to fees and costs
disclosure requirements and enhanced transparency
measures for superannuation trustees. The updated
Life Insurance Code of Practice commences from
1 July 2023 and introduces additional consumer
protections with a view to improve consumer
confidence in life insurance.
AASB 17 implementation
ClearView is in the process of finalising its
implementation of AASB 17 – ‘Insurance Contracts’
which is effective from 1 July 2023. AASB 17 –
‘Insurance Contracts’ is the Australian equivalent
of the International Accounting Standards IFRS 17
Insurance Contracts and will represent a material
change in the accounting of life insurance contracts,
previously accounted for under the margin on services
approach in Australia, in accordance with AASB 1038
Life Insurance Contracts. Key messages from the
AASB 17 changes are as follows:
• AASB 17 does not impact the fundamental
economics or underlying cash flows of the business
– there is no change to financial strength, claims
paying ability, or dividend capacity.
• The key changes include the adoption of an explicit
risk adjustment, the reporting at a significantly
more detailed level of granularity of cohorts (and
related onerous contract testing) and the overall
timing and pattern of profit release.
• The changes to the timing and pattern of profit
release predominantly impacts the stepped
premium business as it is treated as a short term
contract boundary under AASB 17 (as opposed to
the level premium business and reinsurance that
continue to be treated as a long term contract
boundary under the new accounting standards).
The stepped premium business is circa 75% of
ClearView’s in-force portfolio at the reporting date.
• For the stepped premium business, its profit
release is now driven largely by the cash flow
profile of a policy (other than deferred acquisition
costs that are explicitly asset tested for impairment
at each reporting period). The level premium and
reinsurance remains largely unchanged.
ClearView Wealth Limited
19
Directors’ report • For in-force business, as at the transition date, the
30 June 2022 opening Balance Sheet has an initial
net asset reduction of $40-$80 million1 - this is then
released over time leading to a positive impact on
future profit release. The opening Balance Sheet
reduction in retained earnings also leads to a higher
return on equity.
• The Australian Taxation Office (ATO) has yet to
provide any ruling on its AASB 17 impacts and, as
such, ClearView has not been able to assess any
tax-related impact, in particular as to the treatment
of the upfront tax deduction (deferred tax asset
versus tax receivable).
• For new business written, higher profit margins
are earned in the first year, followed by the slower
in-force profit release in subsequent years. Overall,
the same profits should be earned over the life of a
stepped premium contract3.
• Under AASB 17 a lower quantum of acquisition
costs can be deferred (90% of acquisition costs2).
For stepped premium policies, there is an explicit
asset related to the insurance acquisition cash flows
(AIACF) and the onerous contract (and related
impairment) testing is more granular and may lead
to increased profit volatility.
Further details are provided in Note 9.6.
Environment, Social and
Governance (ESG)
Our ESG Roadmap
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 People, Community, Customers &
Partners, Environment and Shareholders.
Our ESG priorities and commitments are aligned to
these pillars and are called our ‘CSR Agenda’ and
integral to ClearView’s strategy and corporate vision.
For the calendar year 2023, our CSR Committee
(CSRC) was drawn from the executive leadership
team. The CSRC oversees and supports ClearView’s
commitment to sustainability including ESG
monitoring and reporting.
Materiality process
This year we completed our first materiality
assessment following a robust 4-step process to
identify and assess our most material priorities.
Annually we will review our priorities; and at each tri-
annual period we will conduct an in-depth materiality
assessment to ensure we are responding to ESG
issues, risks and opportunities of greatest significance
to our stakeholders and the long-term sustainability of
our business.
A comprehensive approach to progressing our CSR
Agenda ensures we stay abreast of regulator priorities
and industry trends and respond to matters of
significance.
ESG priorities which present with the highest level of
importance form the basis for our annual CSR Agenda.
The steps involved in identifying those priority areas
are as follows:
Step 1 – Identify
We identify a list of issues gathered from stakeholders.
At least every three years we consider emerging ESG
trends both locally and internationally, emerging
megatrends, and the Australian regulatory landscape
including ESG priorities announced by the Australian
Prudential Regulation Authority (APRA), the
Australian Securities and Investments Commission
(ASIC), and the Australian Securities Exchange (ASX).
At least every three years we consider developments
within the Sustainable Accounting Standards Board
(SASB) standards which provide disclosure guidance
on financially material sustainability information
relevant to the insurance industry.
Step 2 – Assess
Issues identified at Step 1 are grouped under common
themes and mapped onto a materiality matrix as
shown here.
Most material
l
s
r
e
d
o
h
e
k
a
t
s
r
u
o
o
t
t
n
a
t
r
o
p
m
I
Important
Material
Important to our business
1 After tax; 1 July 2022 opening Balance Sheet impact on net assets. The Deferred Tax Asset (DTA), representing timing difference between liabilities for tax and
accounting purposes, will change in response to potential deductibility of opening Balance Sheet adjustment. This is still under consideration
2 Compared to 100% of acquisition costs are deferred under the Margin On Services approach under AASB 1038
3 Compared to the Margin On Services approach under AASB 1038
20
ClearView Annual Report 2023
Directors’ report
scholarship program sees our people directly
supporting Lifeline Australia with crisis
support volunteers.
ClearView continues to support those charities
nominated by our employees, and as part of
ClearView’s Philanthropic Giving Program,
we made donations to our key charities
including Sony Foundation Australia, Australia
Kookaburra Kids Foundation and CancerCare
Australia.
Environment
ClearView obtained certification from Climate
Active under the Carbon Neutral Standard for
Organisations for the financial years ending
June 2021 and 2022.
Over the coming year, and as part of our own
carbon reduction strategies, we will prioritise
reducing the carbon emissions from our own
business operations and seek to find ways to
reduce our reliance on paper.
The CSRC assess the level of importance to
our business and to our stakeholders in light of
ClearView’s strategic priorities.
Step 3 – Prioritise
Issues presented as ‘most material’ form the basis
of the CSR Agenda for the upcoming financial year.
The CSRC may also decide that other ‘material’ and
‘important’ issues form part of the CSR Agenda.
The CSRC agree to specific goals and set targets.
These quantifiable metrics are tracked and published
internally and are relied upon to measure ClearView’s
overall ESG performance.
Step 4 – Action
A CSR Sub Committee is responsible for delivering on
each set goal and to report its progress to the CSRC
on a frequent and regular basis.
CSR Agenda
Each priority area of our CSR Agenda is backed by
clear goals and measurable targets.
Some of the highlights for the year included:
Customers and Partners
Seeking to deliver better outcomes for our
customers during claims time, we provide
support through their recovery journey by
offering holistic rehabilitation support to
empower them to return to life and work. This
service supports customers through exercises,
career counselling, and business coaching
including executive business coaching. Our
goal is to provide a highly valued service
that can be tailored to meet our customers
individual needs.
Community
Providing opportunities for our employees to
volunteer their time to participate in activities
with a charitable purpose is key to our vision
of supporting Australians to achieve their
wellbeing goals.
As part of our community commitments,
this year we launched ClearView’s Lifeline
Australia Scholarship Program which supports
our employees with paid community service
leave up to 92 hours per calendar year. Our
ClearView Wealth Limited
21
Directors’ report Our pursuit for impactful change
In 2015, the United Nations founded 17 Sustainable Development Goals (SDGs) as a blueprint to end poverty,
protect the planet and ensure prosperity for all by 2030. The below goals are the most relevant to ClearView and
based on where we have the greatest opportunity to influence impactful change and generate positive outcomes.
SDG goals
UN target
What ClearView is doing
Ensure healthy lives and
promote mental health and
well-being (3.4)
• Make flexibility business as usual by providing employees
choice in where they work (hybrid workplace).
• Support employee mental health and wellbeing through
the ClearView ClearMind Program.
Ensure women’s full
participation and equal
opportunities for leadership
at all levels of decision making
(5.5)
Achieve full and productive
employment and decent
work for all women and men,
including for young people and
persons with disabilities, and
equal pay for work of equal
value (8.5)
Ensure equal opportunity and
reduce inequalities of outcome,
including by eliminating
discriminatory laws, policies
and practices and promoting
appropriate legislation, policies
and action in this regard (10.3)
Take urgent action to combat
climate change and its impacts
(13.3)
Develop effective, accountable
and transparent institutions at
all levels (16.7)
Encourage and promote
effective public, public-private
and civil society partnerships,
building on the experience
and resourcing strategies of
partnerships (17.7)
• Support customers through rehabilitation to help
customers return to life and work goals.
• Offer free flu vaccinations to all employees.
• Ensure we equitably attract, retain, develop and pay all
our employees, irrespective of gender.
• Ensure our Board always includes one female director;
the proportion of women in management roles must
be at least 40%; and female representation of the total
workforce must be benchmarked to industry standards.
• Seek ways to better improve the experiences and
outcomes for our customers. Customer satisfaction will
be reflected in our Net Promoter Score.
• Address any gender pay gaps thereby ensuring women
and men performing the same role are paid the same
amount.
• Convert our motor vehicle fleet to 100% hybrid vehicles.
• Call on our employees to find ways to reduce our
customers dependence on paper notices and statements.
• We will put into action ways to reduce carbon emissions
by 20% by 30 June 2030 from within our own business
operations.
• Ensure transparency in all we do including board
oversight across our ESG reporting obligations.
• Ensure our progress towards achieving our CSR Agenda
targets are communicated. This means being transparent
and letting our employees know when things don’t go
right.
• Ensure ClearView’s Philanthropic Giving Program
commits to donate $45,000 each year to charities
chosen by our employees. Our chosen charities are the
Sony Foundation Australia, Australian Kookaburra Kids
Foundation and CancerCare Australia.
• Through our Lifeline Australia Scholarship Program,
ensure ClearView pays the tuition for up to 10 staff to
be trained as accredited crisis supporters. Employees
receive 92 hours paid community leave as a Lifeline Crisis
Support Volunteer.
22
ClearView Annual Report 2023
Directors’ report ClearView’s Vision and Business
Objectives
Details on ClearView’s appetite and tolerance for risk
to these objectives are contained in the Risk Appetite
Statement (RAS).
ClearView’s corporate vision is:
Risk management
Our risk landscape continues to evolve, with ongoing
change in economic conditions, the competitive
landscape, stakeholder (including regulatory)
expectations and financial performance pressures.
Risk has clear prioritisation from the Board and
executive leadership as well as from the business. Our
risk management framework supports ClearView to
manage the risks facing the business and achieve its
objectives. The Board and Management are focused
on a combination of existing and emerging risks within
our financial and non-financial risk exposures.
ClearView regards the skills, experience and focus
of its staff as vital assets in managing material risks
across the organisation. The competence of staff is
complemented by a structured Risk Management
Framework (RMF) consisting of systems, processes
and human capital to manage both financial and
non-financial risks. The RMF supports the Board and
management’s oversight of these risks. The RMF
incorporates the requirements of APRA’s prudential
standard on risk management (CPS / SPS 220 Risk
Management) and is subject to an independent review
every three years.
The following diagram illustrates the key elements of
the RMF.
To support the corporate vision, ClearView has
articulated its key focus objectives as:
• Customer Outcomes – Support Australians to
achieve their financial and wellbeing goals;
• Earnings – Provide a stable, reliable return on
capital and pay a regular dividend;
• Capital Adequacy – Instil confidence in our ability to
deliver on all our obligations through a conservative
approach to capital adequacy;
• Growth/Economic Value – Grow the economic value
of the company, reflected in share price, through
revenue growth, margin and capital stability;
• Employee Outcomes – Be an employer of choice
through the positive culture and collegiate
atmosphere at ClearView;
• Business Partner Outcomes – Be fair and
transparent with business partners to support long
term business relationships; and
• Community Impact – Be a positive force for the
community and the environment.
Risk Governance
Risk Management Approach
• Policies and guidelines
• Boards and board committees
• Management committees
• Reporting
• Performance measurement
• Training and awareness
• Risk Appetite Statement (RAS)
• Risk Management Strategy (RMS)
• Material Risk Categories (Strategic
/ Operational / Credit / Market and
Investment / Liquidity / Insurance /
Compliance)
• Capital (ICAAP / ORFR)
Risk Culture
Risk Management Process
Risk Management Accountability
Identification
•
• Assessment
• Management
• Monitoring
• Attestation / Assurance
• Stress and scenario analysis
•
1st line – own the risk
• 2nd line – advisory, challenge and
oversight
• 3rd line – independent assurance
ClearView Wealth Limited
23
Directors’ report The RMF is described by Board-approved documents,
including (but not limited to):
risk management policies and reports regularly to the
relevant Boards on its activities.
• The Risk Appetite Statement (RAS) articulates the
material risks that the Group is exposed to and
specifies the type and level of risk ClearView is
willing to accept in pursuit of strategic, business
and financial objectives, giving consideration to the
interests of members and policyholders.
• The Risk Management Strategy (RMS) describes
the Group’s strategy for managing current and
emerging material risks, including an outline of risk
management policies and processes and the risk
governance structure.
• The Risk Culture Framework (RCF) describes the
Group’s shared values and behaviours, and makes
clear the expectation of all ClearView staff to
consider, identify, understand, discuss, and manage
current and emerging risks.
The Group Business Plan identifies and considers the
material risks associated with ClearView’s strategic
objectives on a rolling three-year basis.
An Internal Capital Adequacy Assessment Process
(ICAAP) is a key element of the RMF. An integrated
approach to capital adequacy and risk management
is adopted to ensure ClearView holds adequate levels
of capital appropriate to the Group’s risk profile and
risk appetite. This involves risk management practices
such as stress testing to understand, manage and
quantify the Group’s risks in extreme circumstances.
The outcomes of the testing is used to inform risk
decisions, set capital buffers and assist in strategic
planning.
ClearView has adopted a three lines of risk
responsibility model to risk management, whereby
all employees are responsible for identifying and
managing risk and operating within the Group’s risk
profile and appetite. The first line comprises the
business units which have ownership of risks and
are responsible for day-to-day risk management
decision-making involving risk identification,
assessment, mitigation, monitoring and management.
The second line is the Group’s Risk and Compliance
(GRC) function which assists the Board, the Board
Risk and Compliance Committee (Risk Committee)
and executive leadership team (ELT) in the ongoing
development and maintenance of the RMF to support
the company in operating within its approved risk
appetite. The third line is the internal audit function
that provides independent assurance to the Board,
regulators and other stakeholders on the effectiveness
of risk management, internal controls and governance.
The Group’s Board has overall responsibility for
the establishment and oversight of the Group’s risk
management framework. The Risk Committee is
responsible for developing and monitoring the Group’s
The Risk Committee oversees how management
monitors compliance with the Group’s risk
management policies and procedures, and reviews
the adequacy of the risk management framework in
relation to the risks faced by the Group. The Board
Audit Committee (Audit Committee) is assisted in
its oversight role by internal audit. Internal audit
undertakes both regular and ad hoc reviews of risk
management controls and procedures, the results of
which are reported to the Audit Committee.
Management of Material Risks
The RMF outlines ClearView’s material risks from a
strategic, customer, business and financial perspective.
For each material risk and associated sub-categories
the RMF articulates the mitigation strategy as well as
the policy, governance elements and responsibilities
for management.
The material risk categories for ClearView are as
follows:
• Financial
• Strategic
•
Insurance
• Operational
• Legal and Regulatory (Compliance)
For each material risk, ClearView has set out the
following:
• The maximum level of risk (risk tolerance) that
it is willing to operate within, expressed as a risk
limit and based on its risk appetite, risk profile
and capital strength. Risk tolerances translate risk
appetite into operational limits for the day-to-day
management of material risks, where possible;
• The process for ensuring that risk tolerances are
at an appropriate level, based on an estimate of
the impact if risk tolerance is breached, and the
likelihood that each material risk is realised; and
• The process for monitoring compliance with each
risk tolerance and for taking appropriate action if it
is breached; and the timing and process for review
of the risk appetite and risk tolerances.
The Board and management remain committed to
continuously improving the Group’s RMF to ensure
robust risk management practices are in place across
ClearView supported by a strong risk culture. The
Group Risk and Compliance function maintains and
executes an annual workplan which enables the
business to focus on specific areas of activity to
continue to improve our maturity.
24
ClearView Annual Report 2023
Directors’ report Risk Culture in ClearView
ClearView considers a strong risk culture as the
foundation of good risk management, ClearView’s
risk culture is an integral part of its corporate values
and underpins the RMF. ClearView’s interpretation of
risk culture aligns with APRA’s expectation citing: ‘the
norms of behaviour for individuals and groups within
an organisation that determine the collective ability
to identify, understand, openly discuss and act on the
organisation’s current and future risk’. Risk culture
is recognised as not static, but rather a continuous
process, which repeats and renews itself. ClearView
aspires to a risk culture that considers:
“Managing risk is integral to our business and
demonstrated in our actions and decisions of our
people, executive leadership team (ELT) and Board.
Our people and customers are at the centre of our risk
culture and we commit to ongoing communication,
escalation, constructive challenge and making
considered decisions to manage risk consciously.
Where there is ambiguity, ClearView will firstly ask
“Should we?” and then “Can we?”.
To enable the effective facilitation, embedding and
maintenance of a sound risk culture, ClearView has
outlined and described a series of key attributes
including (but not limited to) speaking-up, leadership,
accountability & responsibility, risk frameworks and
performance management & incentives to strike a
balance between behavioural and structural elements.
In addition to the broader RMF workplan, the Group
Risk and Compliance function also maintains and
executes an annual workplan of activities to support
the ongoing maturity of risk culture across ClearView.
ClearView Wealth Limited
25
Directors’ report FY23 Results overview
The ClearView Group achieved the following results for the year ended 30 June 2023.
The discussion of operating performance in the operating and financial review section of this report is presented
on a management reported basis unless otherwise stated. Management reported results are non-IFRS financial
information and are not directly comparable to the statutory results presented in other parts of this financial
report. ClearView’s statutory and management reported profit after tax are the same.
After Tax Profit by Segment, $M
Life Insurance
Listed/Group costs
Group Underlying NPAT before equity accounted interest4
Financial advice – 24.4% share of Centrepoint5/Discontinued
operation
Wealth management – Discontinued operation
Group Underlying NPAT2
Policy liability discount rate effect
Financial Advice divestment
Impairments
Wealth Management divestment
Strategic Review/restructure costs
Other costs
Reported NPAT
FY23
$M
40.4
(3.9)
36.5
0.7
(2.7)
34.5
(14.0)
—
—
(0.8)
(1.1)
(1.4)
17.1
FY22
$M
29.2
(3.3)
25.9
(0.2)
(0.1)
25.7
(11.3)
11.5
(0.8)
—
(2.4)
(1.4)
21.2
%
Change3
38%
18%
41%
Large
Large
34%
24%
N/A
N/A
N/A
(52)%
—%
(19)%
The strong FY23 operating results and growth prospects are driven by the ongoing business simplification. The
Group’s refreshed strategy is focused on leveraging its competitive advantage in life insurance to achieve the goal
of becoming a top player in the Australian market. In conjunction with this, ClearView has set itself some key
goals that it is looking to achieve by FY26. The FY23 actual life insurance key performance indicators and FY26
goals are outlined below:
FY23
Actual
FY26
Goals1
New Business
Market Share6,7
9.0%
Gross
Premiums
$325.1m
+9%
In-force Premium
Market Share6,7
3.2%
New Business
Market Share6
Gross
Premiums
In-force Premium
Market Share6
12-14%
$400m
~4%
Life Insurance
Underlying
NPAT Margin2,9
12.4%
Life Insurance
Underlying
NPAT Margin8
11-13%
FY23 Final
Dividend
54%
of Underlying NPAT2
Dividend
Policy
40-60%
of Underlying NPAT2
1
FY26 goals based on AASB 17 FY24-26 business plan forecasts – currently aligned to implementation program of work and subject to change. Stated prior to any
AIACF impairment charges on stepped premium business or loss recognition on level premium business.
2 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 activities. Includes amortisation of capitalised software and leases, underlying investment income and interest costs associated with
corporate debt and Tier 2 Capital. Costs associated with the incurred claims treaty are reflected as part of reinsurance costs.
3 % change FY22 to FY23.
4
From continuing operations; Underlying NPAT before equity accounted interest includes Life Insurance business unit and the listed segment; excludes the wealth
management business (discontinued operation) and the equity accounted earnings of Centrepoint Alliance from the date of completion (1 November 2021) or the
contribution of the Financial Advice business until the date of sale in the prior comparable period. No adjustments have been made in each relevant period for
stranded costs or other internal charges as a result of the exit of the financial advice and wealth management businesses.
5 Net of impairment of $1.6m in FY23.
6 ClearView calculations based on NMG Risk Distribution Monitor Reports for Retail Advice In-force and New Business Analysis for relevant periods – NMG Market NB
includes total of ‘Retail’ consistently applied (that is, IFA, Bank Advice and Aggregator channels)
7
8
9
FY23 new business market share based on NMG Risk Distribution Monitor Reports for Retail Advice New Business Analysis for the year ended 30 June 2023.
Is calculated as Life Insurance Underlying NPAT divided by Gross Premium Income. Under AASB 17 basis and stated prior to any AIACF impairment charges on
stepped premium business or loss recognition on level premium business.
Is calculated as Life Insurance Underlying NPAT divided by Gross Premium Income. FY23 based on accounting standards on issue – the margin on services approach
under AASB 1038.
26
ClearView Annual Report 2023
Directors’ report Key financial metrics
New business
In-force premiums1
Life Underlying NPAT margin (%)2
Underlying investment income (after tax)3
Interest expense on corporate debt and Tier 2 (after tax)
Reported diluted EPS (cps)
Underlying diluted EPS (cps)
FY23
$M
25.2
305.9
12.4
7.6
(5.7)
3.27
5.81
FY22
$M
20.2
276.5
9.7
2.3
(4.0)
1.79
4.15
%
Change4
25%
11%
+270bps
Large
Large
83%
40%
Revenue from continuing operations
The Group’s revenue base in the year was predominantly generated from premiums charged to life insurance
policyholders. ClearView provides life insurance protection products through its wholly owned subsidiary
ClearView Life. These products are designed to allow policyholders to receive (in the case of an eligible claim)
either a one off payment (lump sum products) or recurring benefits (ongoing monthly payments) over a specified
period, typically a certain number of years, or up to a specific age (income protection products).
There is strong momentum in the underlying business fundamentals:
• Gross premiums increased by 9% to $325.1 million;
• New business increased by 25% to $25.2 million;
• New business market share increased to circa 9% (up from 7% in FY22);
• Advice in-force premiums increased 11% to $305.9 million; and
• Total in-force premiums increased 9% to $339.3 million.
The increase in gross life insurance premiums to $325.1 million (+9%) was driven by premiums in force that rose
from $311.4 million in FY22 to $339.3 million in FY23 (+9%). Core in-force premium growth (advice channel)
primarily reflects the net impact of new business flows, lapses and age, CPI and premium rate increases.
New business (sales) is driven solely by the ClearView ClearChoice product suite as the LifeSolutions, Non-Advice
and Legacy portfolios are closed to new business.
1
In-force premiums are the annualised premium in-force at balance date for the advice products (LifeSolutions and ClearChoice) and excludes the closed direct
products no longer marketed to new customers. Total in-force premiums of $339.3m as at 30 June 2023.
2
Is calculated as Life Insurance Underlying NPAT divided by Gross Premium Income.
3 Underlying investment income includes the portfolio carry yield on the Pimco portfolio and interest rate earned on physical cash holdings. Interest cost on corporate
debt includes Tier 2 subordinated debt costs and costs on the bank debt facility. Excludes interest income on discontinued operations
4 % change FY22 to FY23.
ClearView Wealth Limited
27
Directors’ report This is discussed in further detail below:
Chart 1: Regaining of new business market share
Advice New Business ($m) and Market Share (%)
40.3
42.4
8.6%
39.3
34.7
7.6%
FY26 Target1:
12%-14% target
market share
9.0%
Launch of
technology
platform for
new business
27.5
6.3%
23.6
5.2%
16.9
4.0%
3.1%
2.1%
3.7
0.5%
5.9%
24.2
6.6%
25.2
5.1%
16.3
20.2
FY12A
FY13A
FY14A
FY15A
FY16A
FY17A
FY18A
FY19A
FY20A
FY21A
FY22A
FY23A
Advice New Business
NB Mkt Share
Linear (NB Mkt Share)
ClearView’s sales increased by 25% to $25.2 million in FY23 and it is now achieving a circa 9% market share in the
IFA market, up from 5% in FY21. ClearView achieved an 11% market share in the last quarter of FY23, the highest
new business market share that it has achieved since entering the IFA market in FY12.
ClearView has a strong presence and reputation in the IFA market, having previously reached a peak of circa
8% market share and $40 million of sales in FY18 and FY19. However, a number of factors have resulted in
new business premiums (in dollar terms) declining, including that new business sales in the market overall have
reduced materially (over time). Recognising sustainability issues, ClearView was one of the first life insurers to
initiate material premium rate increase for its disability product in or around FY19. This initiative has underpinned
recent years profit improvements, but at the time resulted in an initial decline in new business sales. Over this
period, the business intentionally focused on retaining and supporting customers, and that ultimately flowed
through to higher in-force premiums with improved margins.
For the industry more broadly, factors such as regulatory change (the tightening of conduct settings and
implementation of education standards), a reduction in adviser numbers, premium rate increases and Covid-19
impacts contributed to a decline in market new business sales. In more recent times, the life insurance market has
started to show signs of revival including an improved regulatory outlook and a return to industry profitability,
largely driven by the structural reforms that have focused on sustainability.
ClearView commenced investing in a business transformation program from FY21, during the periods of change
and uncertainty (COVID-19 and industry issues). FY22 reflected the overall shift in focus of ClearView back to
growth, in line with the inflection point of the industry.
ClearView has established a diversified distribution network with over 900+ dealer groups comprising of 4,000+
advisers.
These factors and the strong adviser support of the ClearView ClearChoice product has business well positioned
to achieve its goal of 12%-14% market share of new business by FY26.
1
FY26 goals based on AASB 17 FY24-26 business plan forecasts – currently aligned to implementation program of work and subject to change.
28
ClearView Annual Report 2023
Directors’ report Chart 2: Consistent YoY growth of in-force premium
Advice (In-force) ($m) and Market Share (%)
FY26 Target1:
~4.0% market
share and
~$375m of gross
premium in
advice market
375
3.2%
2.6%
2.8%
2.9%
3.0%
305.9
276.5
254.5
2.2%
234.9
214.8
1.8%
184.2
1.4%
146.1
1.0%
105.7
0.7%
45.2
71.0
0.3%
19.0
0.1%
3.5
FY12A
FY13A
FY14A
FY15A
FY16A
FY17A
FY18A
FY19A
FY20A
FY21A
FY22A
FY23A
FY26 Target
Chart 3: Gross premium income growth
CVW Advice IF
IF Mkt Share
Gross Premium - $m
FY26 Target1:
$400 of
gross premium
in total across
channels
400.0
325.1
299.6
278.2
260.0
243.1
215.2
177.7
138.3
105.2
76.8
55.2
40.9
FY12A
FY13A
FY14A
FY15A
FY16A
FY17A
FY18A
FY19A
FY20A
FY21A
FY22A
FY23A
FY26 Target
1
FY26 goals based on AASB 17 FY24-26 business plan forecasts – currently aligned to implementation program of work and subject to change.
ClearView Wealth Limited
29
Directors’ report
In line with its new business market share gains,
ClearView has a strong track record of in-force
premium growth in the financial adviser channel since
entry in 2012.
It has an in-force market share of circa 3.2% of
the IFA market, with in-force premiums up 11% to
$305.9 million for the advice business (total in-force
premiums of $339.3 million as at 30 June 2023).
The overall growth in the life insurance industry is
underpinned by a number of longer term sustainable
factors, including:
• Population growth: As the population grows, the
insurable market size increases and demand for life
insurance policies are expected to increase.
• Ageing population: Consumers generally maintain
their life insurance policies for a longer period of
time as age expectancy increases. The pricing
of policies typically also increases with older
individuals’ higher health risk profiles.
• Household wealth, income and debt: As individuals
increase their incomes or take on more debt, the
sum insured required to maintain that individual’s
quality of life increases. A higher sum insured
generally results in higher life insurance premiums;
and
•
Inflation: Most life insurance premiums are
index-linked to inflation, meaning that inflation
drives nominal increases in life insurance risk
in-force premiums.
The repricing of the in-force portfolios (across the
industry) remains a long term structural driver to
appropriately price for risk and experience (claims
and reinsurance impacts) that should lead to in-force
growth and profitability. In January 2023, ClearView
commenced a new repricing cycle on the ClearView
LifeSolutions portfolio to cover the cost of the
reinsurance premium rate increases.
The in-force portfolios should also trend to the
higher new business market share (over time) which
underpins the growth profile given that in-force
premium is the key driver of profitability.
Gross Premium income broadly represents the average
in-force premiums between periods.
ClearView has a FY26 in-force market share target of
circa 4% and in-force premium target of $400 million.
Group result - continuing operations
Underlying NPAT (from continuing operations)1 reflects
the underlying performance of the life insurance and
listed segments and has been adopted by the Board
as its key measure of Group profitability and basis for
dividend payment decisions.
Underlying NPAT (from continuing operations)
increased 41% to $36.5 million (FY22: $25.9 million)
and fully diluted Underlying EPS increased 40% to 5.81
cps (FY22: 4.15 cps). Life Insurance remains the core
business and main contributor. Further details of the
performance of the life insurance business are outlined
below.
In accordance with AASB 5 Non-Current Assets Held
for Sale and Discontinued Operations, the Wealth
Management segment meets the criteria to be
classified as held for sale in the consolidated financial
statements for the year ended 30 June 2023 and is
therefore now reported as a discontinued operation.
Net interest income for the Group increased to $2.8
million in FY23, increasing from a net interest cost
of -$2.4 million in the prior year ($5.2 million swing
before tax). This was driven by a material increase
in the underlying earning rate on the investment
portfolio2 and interest income on physical cash,
partially offset by the increased costs on the Tier 2
subordinated debt and amounts settled under the
terms of the incurred claims reinsurance arrangements.
Group operating expenses (from continuing
operations) increased to $64.9 million in FY23 (FY22:
$61.9 million), up 5%. The increase in the cost base was
predominantly driven by investment into key areas of
the business as follows:
•
•
•
IT infrastructure and cyber security uplift;
investment in the IT transformation program (and
related increased software amortisation charge);
investment in business capability as outlined earlier
in the report;
• normalised discretionary spend such as travel
and entertainment due to the opening up post
COVID-19 restrictions; and
• an increased FY23 STVR bonus provision (relative
to FY22) given the strong business performance.
1
2
Before equity accounted earnings of Centrepoint Alliance.
Portfolio carry yield on the Pimco portfolio based on Pimco reports.
30
ClearView Annual Report 2023
Directors’ report Reconciliation of operating expenses to reported operating expenses per financial statements
$M
Operating expenses
Depreciation and amortisation expenses
Stamp duty
Medical costs
Depreciation (right of use assets)
PAS transformation and duplication costs
PIMCO mandate fee
Reinsurance technology costs
Strategic review/restructure costs
Other expenses
Operating Expenses per financial statements
FY23
64.9
(2.4)
13.5
2.2
(3.2)
2.4
0.6
0.2
2.5
0.7
81.4
FY22
61.9
(1.7)
11.9
1.4
(3.3)
1.4
0.5
0.6
2.4
1.0
76.3
ClearView has achieved a strong FY23 performance underpinned by the transformation strategy and investment
in the business.
Life Insurance result
The Life Insurance result is outlined in the tables below:
12 Months to June 2023 ($M)1
Gross life insurance premiums
Interest income
Interest expense on Tier 2
1H
147.6
0.7
(0.9)
2022
2023
%
2H
FY22
1H
2H
FY23
Change2
152.1
299.6
160.0
165.2
1.6
(1.0)
2.3
(1.9)
4.2
(1.3)
5.8
(1.4)
325.1
10.0
(2.7)
Claims incurred (gross)
(71.6)
(101.7)
(173.3)
(66.2)
(68.2)
(134.4)
Reinsurance recoveries
50.5
77.5
128.0
46.6
48.3
94.9
Reinsurance premium expense
(58.0)
(60.5)
(118.6)
(61.3)
(61.9)
(123.2)
Commission & other variable costs
(29.8)
(29.9)
(59.7)
(33.4)
(35.3)
(68.7)
Operating expenses
(29.3)
(31.1)
(60.4)
(30.5)
(33.2)
(63.7)
Movement in policy liability
Income tax (expense) / benefit
Life Insurance Underlying NPAT
Analysis of Profit ($M)
Expected Underlying NPAT3
Claims experience
Lapse experience
Expense experience
Other4
Actual Underlying NPAT before claims
assumptions
Claims Assumptions Changes
Long COVID/reopened claims
Actual Underlying NPAT
9.6
(5.5)
13.3
1H
13.7
0.5
0.2
(1.1)
0.1
13.3
—
—
13.3
15.5
(6.5)
16.0
2022
2H
13.5
2.9
4.0
(1.7)
1.8
20.5
(2.5)
(2.1)
16.0
25.1
(12.1)
29.2
FY22
27.2
3.4
4.2
(2.8)
1.7
33.7
(2.5)
(2.1)
29.2
9.5
(8.3)
19.4
1H
17.9
0.8
1.7
(1.3)
1.0
20.1
—
(0.7)
19.4
11.1
(9.4)
21.0
2023
2H
18.2
1.5
3.2
(2.1)
0.6
21.4
(1.3)
0.9
21.0
9%
Large
41%
(22%)
(26%)
4%
15%
6%
(18%)
47%
38%
%
20.6
(17.7)
40.4
FY23
Change2
36.1
2.3
4.9
(3.4)
1.6
41.5
(1.3)
0.2
40.4
33%
(32)%
17%
22%
(7%)
23%
N/A
Large
38%
1
Inter-segment revenues/expenses are not eliminated in the managements view.
2 % change represents the movement from FY22 to FY23.
3
Expected Underlying NPAT of $36.1m reflects expected profit margins on in-force portfolios based on actuarial assumptions. Includes changes made to assumptions at
30 June 2022. Reported under margin on services approach.
4 Other predominately relates to an increase in net interest rates earned and commission, reinsurance, volume and pricing variances to expected.
ClearView Wealth Limited
31
Directors’ report The Life Insurance Underlying NPAT increased by 38% to $40.4 million with an Underlying NPAT margin of 12.4%.
The record performance of the Life Insurance business in FY23 is driven by:
• overall positive underlying claims and lapse performance (relative to the assumptions adopted as at 30 June
2022);
• updating of actuarial assumptions (in prior periods) to align with the overall environment;
• repricing of the LifeSolutions in-force portfolios to take into account the impacts of increased reinsurance
costs and related material changes made to the income protection claims assumptions;
• continued positive response to the ClearView ClearChoice product range at sustainable margins. The product
has been well accepted with increased new business flows (and market share);
• benefits of transformation strategy starting to flow through; and
• an increasing interest rate environment.
The performance of the business (over time), is represented graphically below:
Chart 4: Life Insurance Underlying NPAT profit growth
Life Underlying NPAT1 ($m) and Margin3 (%)
17.7%
15.2%
14.1%
14.5%
14.0%
24.5
24.9
12.1%
26.1
15.3
10.8
8.4
29.2
9.7%
24.1
8.7%
22.0
9.0%
10.4
4.0%
FY26 Target:
11%-13%
Underlying
NPAT margin2
40.4
12.4%
FY13A
FY14A
FY15A
FY16A
FY17A
FY18A
FY19A
FY20A
FY21A
FY22A
FY23A
Life Underlying NPAT
Life Underlying NPAT %
Linear (Life Underlying NPAT)
1
2
3
32
Life Insurance 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 activities. Includes amortisation of capitalised software and leases, underlying investment income and interest costs
associated with corporate debt and Tier 2 Capital. Costs associated with the incurred claims treaty are reflected as part of reinsurance costs.
Is calculated as Life Insurance Underlying NPAT divided by Gross Premium Income. Calculated under margin on services approach.
FY26 goals based on AASB 17 FY24-26 business plan forecasts – currently aligned to implementation program of work and subject to change. Stated prior to any
AIACF impairment charges on stepped premium business or loss recognition on level premium business.
ClearView Annual Report 2023
Directors’ report The strong FY23 result aligns with a broader improved industry financial performance. Key factors that have
influenced the performance of the business (over time) are as follows:
• FY19 - industry structural and sustainability issues with the first phase of repricing of back books;
• FY20 result included poor claims experience and related strengthening of assumptions (including COVID-19
allowances);
• FY21 - Transformation strategy in place with improved performance albeit lower interest rate environment;
• FY22 - Further back book staggered price increases in line with industry sustainability measures; and
• FY23 - Impacts of regulatory changes, increased interest rate environment, repricing, growth shift and
improved industry profitability.
Claims Performance
There was an underlying claims experience profit of $2.3 million in FY23 (FY22: $3.4 million), compared to the
best estimate assumptions, and this can be broken down by product type as follows:
• Advice lump sum portfolio had an underlying experience profit of $1.8 million (FY22: $0.8 million);
• Advice income protection portfolio had an underlying experience profit of $0.2 million (FY22: $1.6 million); and
• Direct portfolios (closed to new business) had an underlying experience profit of $0.3 million (FY22: $1.0
million).
ClearView’s claims performance is outlined in the chart below:
Chart 5: Claims Experience ($M)1
(3.1)
(1.8)
(5.2)
(0.3)
FY19
(1.5)
(7.2)
(3.9)
(5.9)
(18.5)
FY20
1.3
1.0
2.7
0.5
(2.9)
1.0
1.6
0.8
(2.5)
(2.1)
(1.2)
0.4
0.2
0.2
1.2
1.8
(1.3)
FY21
FY22
FY23
AdviceLump Sum
Advice Income Protection
Non-advice
Long COVID/reopened claims
Change in Assumption
1
Relative to the assumptions adopted in the relevant period (including allowances for COVID-19 where applicable).
ClearView Wealth Limited
33
Directors’ report ClearView’s underlying income protection claims performance has continued to be positive driven by the
investment in claims capability, rehabilitation programs and other initiatives to support return to work outcomes.
The claims performance is also relative to the material changes that were made to the actuarial claims
assumptions (in prior periods) to allow for the structural issues (for income protection products) that were driven
by underpricing and generous benefits that did not keep up with societal trends. Certain assumption changes
were made at 30 June 2023 in particular in relation to delays in the reporting of incurred claims. The overall net
adverse impact of assumption changes was $1.1 million in FY23.
ClearView ClearChoice deals with the sustainability issues required by APRA on income protection products. From
a claims perspective, it is too early in the portfolio’s lifecycle to make any assessment of its performance to date.
ClearView’s claims performance is consistent with the improved financial performance of the life insurance
industry over recent years. While industry profit on risk products for the year ended 31 March 2023 was slightly
down on the previous year, the result is encouraging recording a profit of $872.4 million (FY22: $973.3 million)1.
This result was predominantly driven by Individual lump sum and income protection products which recorded a
profit of $762.3 million, compared to $1.143 billion in the previous year. Group products returned improved results
in comparison to the prior year, noting that ClearView only participates in the Individual risk market.
A cautious approach continues to be adopted with claims reserves continuing to be held to cover the potential for
re-opens and to a lesser extent long COVID-19 claims eventuating in the portfolio. These provisions will continue
to be monitored and re-assessed at each reporting period.
The direct portfolios (closed to new business) retain more risk than the ClearView advice based products. The
portfolio has historically reflected claims profits over a longer period of time, albeit with some volatility between
periods.
Lapse Performance
The FY23 result includes a lapse experience profit of $4.9 million (FY22: $4.2 million), compared to the best
estimate assumptions (including an allowance for shock lapses due to the repricing of the in-force portfolios).
The following charts reflect the overall lapse performance by product type:
Chart 6: Lapse Experience ($M)2
3.7
2.2
2.6
(1.1)
4.2
1.4
4.4
(1.5)
4.9
1.1
3.6
0.2
(0.2)
0.6
(1.7)
(1.3)
FY20
FY21
FY22
FY23
Advice Lump Sum
Advice Income Protection
Non-advice
(2.9)
(2.0)
(0.6)
(5.5)
FY19
1 APRA Quarterly Life Insurance Performance Statistics March 2023.
2 Relative to the assumptions adopted in the relevant period.
34
ClearView Annual Report 2023
Directors’ report The FY23 lapse experience can be broken down as follows:
• Advice lump sum portfolio had an underlying experience profit of $3.6 million (FY22: $4.4 million);
• Advice income protection portfolio had an underlying experience profit of $0.2 million (FY22: -$1.5 million
experience loss); and
• Direct portfolios (closed to new business) had an underlying experience profit of $1.1 million (FY22: $1.4 million)
For the year, lapses have been lower than assumptions including allowances for the re-pricing of the portfolio.
The shock lapses related to the further premium rate increases on the LifeSolutions portfolio appear materially
lower than expected (price increases are predominantly on level premium income protection business).
Industry participants continue to increase prices on their in-force portfolios. ClearView is currently repricing its
LifeSolutions in-force portfolio.
There does not appear to be significant evidence of lapses due to economic stress in FY23. Superannuation is
a significant funding source of life insurance and the relatively low unemployment rate has supported the lapse
performance of the business. The interest rate increases and impacts on household budgets will continue to be
closely monitored in FY24. ClearView continues to focus on lapse management and retention.
Reinsurance
Increases in the reinsurance expense between periods reflects changes to reinsurer pricing and the costs
associated with the incurred claims treaties. Incurred claims treaties are in place to protect reinsurance recoveries
for both lump sum and income protection claims to manage the counterparty risk. ClearView’s LifeSolutions and
ClearChoice product ranges are substantially reinsured with Swiss Re Life and Health Australia (Swiss Re).
Plans are underway to increase ClearView’s exposure to underwriting risk for new business, thereby reducing
reinsurance costs and increasing sum insured retained that will result in higher new business profit over time.
This confidence to increase the underwriting risk exposure is due to the increased size of the in-force portfolios,
improved industry profitability and product sustainability measures seen in the Group’s performance this year.
Listed/Group result
The Listed/Group Underlying NPAT3 of the listed/group segment decreased by 10% to a loss of $3.2 million (from
a loss of $3.6 million in FY22):
12 Months to June 2023 ($M)1
Interest Income
Interest on debt & facility fees
Operating expenses
Income tax (expense) / benefit
Listed Underlying NPAT
Financial Advice discontinued
operation/ Equity accounting for
Centrepoint Alliance
2022
2H
0.9
(2.0)
(0.8)
0.4
(1.4)
1H
0.1
(1.9)
(0.7)
0.7
(1.9)
2023
%
FY22
1.0
(3.8)
(1.6)
1.1
(3.3)
1H
0.4
(2.6)
(0.8)
0.9
(2.1)
2H
0.6
(2.8)
(0.4)
0.9
(1.8)
FY23
Change2
0.9
(5.4)
(1.2)
1.8
(3.9)
(6)%
41%
(24)%
63%
16%
(0.5)
0.2
(0.2)
1.7
(1.0)
0.7
Large
Underlying NPAT post financial advice/
equity accounting
(2.3)
(1.2)
(3.6)
(0.4)
(2.8)
(3.2)
(10)%
1
Inter-segment revenues/expenses are not eliminated in the managements view.
2 % change represents the movement from FY22 to FY23.
3 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 activities. Includes amortisation of capitalised software and leases, underlying investment income and interest costs associated with
corporate debt and Tier 2 Capital.
ClearView Wealth Limited
35
Directors’ report The Company manages capital at the listed entity
level in accordance with its Internal Capital Adequacy
Assessment Process (ICAAP) policy.
The listed/ group segment earns interest on its
physical cash holdings that was offset, in the year
under review, by higher interest rates on corporate
debt (in particular changes in Bank Bill Swap Rates).
Corporate debt includes the loan establishment and
interest costs on the Debt Funding Facility and the
$75 million subordinated, unsecured Tier 2 notes.
The costs associated with maintaining a listed entity
have remained broadly consistent period to period,
albeit the FY23 result included the benefits of certain
accrual reversals. These costs include directors fees,
investor relations expenses, insurance, audit fees and
other related costs. Listed expenses recognised for the
year was $1.2 million (FY22: $1.6 million).
Investment in Associate
The financial advice businesses were sold on 1
November 2021 to Centrepoint Alliance, in exchange
for $3.2 million in cash and the acquisition of a
strategic 24.4% stake in Centrepoint Alliance.
The Centrepoint Alliance transaction has been
equity accounted, contributing $0.7 million in FY23
(FY22: $0.5 million). The equity accounted FY23
result is reflected net of an impairment charge of
$1.5 million (given the recent Centrepoint share price
performance) partially offset by a deferred tax benefit
of $1.1 million relating to tax losses.
The business has been able to achieve significant
operating leverage and scale post the transaction,
including the achievement of anticipated cost
synergies.
FY23 Reported NPAT
Reported NPAT, decreased by 19% to $17.1 million
(FY22: $21.2 million) and reported diluted EPS
decreased 24% to 2.67 cps (FY22: 3.32 cps).
Reported NPAT in the prior period was positively
impacted by the gain on sale of the financial advice
business.
The FY23 Reported NPAT has been adversely
impacted by changes in the long-term discount rates
used to determine insurance policy liabilities, which
is separately reported below the line and explained in
further detail below.
Items that have been identified by the Board as not
representative of underlying business performance are
not included in Underlying NPAT. The determination
of these items was made after consideration of their
nature and materiality and is applied consistently from
period-to-period.
Items not included in Underlying NPAT primarily
result from costs relating to major restructuring
initiatives, impacts on policy liability and disabled lives
incurred claims reserves from changes in discount
rates, impairments of assets (excluding investment
in Centrepoint Alliance), amortisation of acquired
intangibles and other transactions outside the ordinary
course of business.
The following items impacted the reported NPAT and
comprised the items outlined in the table on page 26:
Reconciling items ($M)
FY23
FY22
Policy liability discount rate
effect
Financial Advice divestment
Impairments
(14.0)
(11.3)
—
—
11.5
(0.8)
—
Wealth Management divestment
(0.8)
Strategic Review/restructure
costs
Other costs
Total
(1.1)
(2.4)
(1.4)
(17.3)
(1.4)
(4.4)
Policy liability discount rate effect
The policy liability discount rate effect is the result
of changes in the long-term discount rates used to
determine insurance policy liabilities and the incurred
income protection claims reserves.
The life insurance policy liability (based on AIFRS) and
income protection incurred disabled lives reserves are
discounted using market discount rates that typically
vary at each reporting date. ClearView separately
reports this movement (consistently period to period).
For the life insurance policy liability, this represents a
timing difference in the release of profit and has no
impact on underlying earnings over the life cycle of
a policy. The net impact of the changes in long-term
discount rates on policy liability in the year ended 30
June 2023, caused a decrease in after-tax profit of
-$10.7 million (FY22: -$8.3 million).
For the incurred income protection disabled lives
claims reserves, this represents a change in the claims
costs given the discounting of the incurred claims
reserves at market discount rates (including taking
into account changes in inflation).
ClearView has contracted PIMCO to assist it with its
asset liability management. The mandate is to manage
the shareholder funds that match the insurance
liabilities (including inflation), claims and capital
reserves and surplus capital in the life company.
The extent that the investments impacted earnings
from changes in market values has also been reported
below the line (underlying earning rate on the
portfolio1 is reported as part of underlying NPAT).
36
ClearView Annual Report 2023
Directors’ report An overall net loss of -$3.3 million after tax was made
in the year ended 30 June 2023 (FY22: -$3.0 million).
Impairment of the ClearView head office lease
right of use asset
In FY22, the business materially reduced its headcount
as part of the Financial Advice transaction. The Group
completed an impairment assessment on the Head
Office lease right of use asset and recognised an
impairment charge of $0.8 million after-tax in relation
to floor space no longer utilised.
Costs unusual to ordinary activities
Other costs include $1.7 million (after tax) expensed in
relation to the Life Insurance IT transformation project,
that are considered costs unusual to the ordinary
activities (FY22: $1.0 million).
These costs relate to duplicate system costs
associated with the implementation of the new PAS.
The costs of migration will be incurred as the platform
development continues. Further details on the PAS
project will be provided as it progresses.
Strategic review/restructure costs
Further costs of $0.4 million (after tax) (FY22: $2.4
million) were recognised in FY23 in relation to the
strategic review, predominantly related to vendor
due diligence and legal costs incurred to support the
overall review. This was offset by a tax benefit related
to the deductibility of the costs incurred for the review
(+$0.7 million).
A restructure cost of $1.4 million (after tax) was
incurred in FY23 given changes to the leadership
team and restructure of the business to focus on life
insurance.
Wealth management divestment
Costs of $0.8 million (after tax) (FY22: nil) were
recognised in FY23 in relation to the divestment
from the wealth management business. These costs
relate to legal fees, advisory and consulting costs
and redundancies (incurred to date) related to the
divestment of the wealth management business.
Sale of Advice Business
The financial advice businesses were sold on 1
November 2021 to Centrepoint Alliance.
The Group recognised a gain on sale of $11.5 million
on the transaction (net of costs related to the sale
including shared redundancy costs, legal fees,
employee, consultancy and professional indemnity
insurance run off cover).
$0.2 million of transactions costs were incurred in
relation to the acquisition of the 24.5% interest in
Centrepoint Alliance and were separately accounted
for.
1
Portfolio carry yield on the Pimco portfolio as per Pimco reports.
ClearView Wealth Limited
37
Directors’ report Operating
Segment Review
Discontinued operations - Wealth Management
The Wealth Management result is outlined in the table below:
12 Months to June 2023 ($M)1
Funds management fees
Interest Income
Commission and Other External2
Funds management expenses
Operating expenses
Income tax (expense) / benefit
Wealth Management Underlying NPAT
Wealth Management Revenue
2022
2023
%
1H
16.0
—
(2.2)
(4.2)
(8.1)
(0.3)
1.1
2H
13.9
—
(1.9)
(3.9)
(9.8)
0.4
(1.2)
FY22
29.9
—
(4.1)
(8.1)
(17.9)
0.2
(0.1)
1H
10.9
0.5
(1.4)
(2.8)
(8.5)
0.5
(1.0)
2H
10.5
0.2
(1.4)
(2.8)
(8.9)
0.7
(1.7)
FY23
Change3
21.3
0.7
(2.8)
(5.6)
(17.4)
1.2
(2.7)
(29%)
Large
(31%)
(31%)
(3%)
Large
Large
Funds management fee income decreased from $29.9 million in FY22 to $21.3 million in FY23 (-29%).
Fee income was impacted by the decline in fee margins from the continued change in the FUM mix
including the transition of the Master Trust (traditional) product to the lower margin contemporary product
(WealthFoundations) in May 2022. The clients were transferred to effectively simplify the product suite and enable
clients to reengage with a contemporary product. FUM balances reduced from $2.71 billion in FY22 to $2.67 billion
in FY23 (-1%).
As previously announced to the market, the Board initiated a strategic review in the wealth management segment
to seek out and pursue opportunities to reset and simplify the business with the ambition of retaining its core
focus on being a life insurance risk provider. The Board is committed to the exit of the wealth management
business given its lack of scale and limited growth options.
ClearView entered into a share sale agreement (on 22 February 2023) for the sale of CFML to Human Financial,
subject to the completion of certain conditions precedent.
The superannuation fund trustee, ClearView Life Nominees Pty Limited is, at the same time, considering a number
of options and the best way forward for the superannuation fund, ClearView Retirement Plan. The outcome of
these considerations will inform the roadmap and timing for the overall exit of the wealth management business.
1
Shareholder view excludes the life investments contracts (i.e. unit linked business) and deconsolidates retail unit trusts and reflects fees earned by the shareholder less
expenses incurred. Inter segment revenues/expenses are not eliminated in the shareholder view.
2 Commission and other external expenses include the platform fee payable on WealthSolutions and the intra fund advice fee (payable to Centrepoint Alliance from
1 November 2021) on the Master Trust (traditional) product in the relevant period. The intra fund advice fee ceased on transition of the traditional product to the
WealthFoundations product in 2H FY22.
3 % change represents the movement from FY22 to FY23.
38
ClearView Annual Report 2023
Directors’ report Discontinued operations - Wealth Management
The Wealth Management result is outlined in the table below:
12 Months to June 2023 ($M)1
Funds management fees
Interest Income
Commission and Other External2
Funds management expenses
Operating expenses
Income tax (expense) / benefit
Wealth Management Underlying NPAT
2022
2023
2H
13.9
—
(1.9)
(3.9)
(9.8)
0.4
(1.2)
FY22
29.9
—
(4.1)
(8.1)
(17.9)
0.2
(0.1)
1H
10.9
0.5
(1.4)
(2.8)
(8.5)
0.5
(1.0)
2H
10.5
0.2
(1.4)
(2.8)
(8.9)
0.7
(1.7)
1H
16.0
—
(2.2)
(4.2)
(8.1)
(0.3)
1.1
%
(29%)
Large
(31%)
(31%)
(3%)
Large
Large
21.3
0.7
(2.8)
(5.6)
(17.4)
1.2
(2.7)
Post exit of the wealth management business, ClearView will be a simplified and less complex business with a
focus on life insurance. However, given the trustee considerations, the timing remains uncertain but is expected to
be within the FY24 financial year.
In accordance with AASB 5 Non-Current Assets Held for Sale and Discontinued Operations, the wealth
management segment meets the criteria to be classified as held for sale in the consolidated financial statements
for the year ended 30 June 2023. As such it is now reported as a discontinued operation. See note 8.5 for further
details.
Statement of financial position
The Group’s statement of financial position, which is set out on page 80, reflects the key metrics below.
Net assets at 30 June 2023 increased to $485.3 million (30 June 2022: $481.1 million) and net asset value per
share (including ESP loans)1 of 75.4 cents per share (30 June 2022: 74.5 cents per share). The increase in net
assets is reflected net of the payment of a $13 million fully franked FY22 final dividend in September 2022.
ClearView is capitalised with Common Equity Tier 1 capital and Tier 2 capital. The shareholder view of the Balance
Sheet at 30 June 2023 reflects:
• Shareholder cash and investments position of $516.9 million – shareholder capital is conservatively invested in
the large institutional Australian banks and a specialist fixed interest investment mandate with PIMCO.
• Net cash and investments position of $426.7 million, with $16 million drawn down under the Debt Funding
Facility and $74.2 million Tier 2 subordinated debt (net of costs).
• The equity accounted investment in Centrepoint Alliance, with a carrying value of $13.4 million (net of the
FY23
Change3
FY23 impairment charge of $1.5 million).
• Goodwill of $4 million arising on the acquisition of Matrix was allocated to the Life Insurance cash generating
unit. The amount allocated to the Wealth Management cash generating unit ($8.5 million) is now included in
assets held for sale as at the Balance Sheet date. The goodwill recognised is tested for impairment triggers
using the embedded value methodology by comparing the carrying value of goodwill to the in-force portfolios
written to date.
•
Intangibles of $27.0 million (FY22: $17.4 million) related to capitalised software costs, of which ClearView has
to date, recognised $20.8 million as intangible assets in respect of customisation and configuration costs
incurred in implementing SaaS arrangements for the PAS. These intangible assets are amortised on a straight-
line basis with the new PAS being amortised over the useful life of 10 years.
• The life insurance policy liability includes the change in interest rate effects between periods and settlement of
liabilities under the incurred claims treaties.
• Past policy acquisition costs of $386.9 million (FY22: $370.9 million) are reflected on Balance Sheet and this
asset converts to cash as future premiums are collected (subject to lapse risk).
1
ESP loans are a non-recourse loan that is accounted for as an option and not reported as a receivable on the Balance Sheet as at the reporting date. Based on the 90
day VWAP share price of 48.3 cents per share at 30 June 2023, of the remaining 16.6 million ESP shares on issue (and included in the total shares on issue of 659.5
million), 0.8 million ESP shares are considered to be in the money with a ESP loan recoverable balance of $0.3 million. 15.8 million out of the money ESP shares would
therefore be bought back and cancelled at the lower of the issue price or the ESP loan value, thereby reducing the shares on issue to 643.7 million shares. As such,
$0.3 million of ESP loans have been added to the net assets and 643.7 million shares on issue have been used for the purposes of calculating the net asset value per
share. On a fully diluted basis, net of treasury shares, a further 11.4 million performance and restricted rights can be converted into ordinary shares - these have been
excluded for the purposes of the calculation.
ClearView Wealth Limited
39
Directors’ report Capital position
The following table reflects the net capital position of the Group as at 30 June 2023:
APRA
ASIC
All
Regulated
Regulated
Regulated
NOHC4/
Life Wealth
Other
Entities Wealth
Entities
Entities
Other
Group
$M
458.7
$M
10.3
— (2.9)
$M
4.4
—
$M
473.4
(2.9)
$M
6.7
—
$M
6.7
—
$M
480.0
$M
5.3
$M
485.3
(2.9)
(25.4)
(28.3)
458.7
7.4
4.4
470.5
6.7
6.7
477.2
(20.1)
457.0
(386.9)
—
— (386.9)
(2.1)
(0.1)
30.0
99.6
—
7.4
—
—
4.4
(2.2)
30.0
111.4
—
—
—
6.6
— (386.9)
— (386.9)
—
—
6.6
(2.2)
30.0
118.0
(0.1)
45.0
24.7
(2.3)
75.0
142.8
Net assets at 30 June 20231
Intangible adjustments2
Net assets after intangible
adjustments
Capital Base Adjustment:
Deferred Acquisition Costs
(DAC)
DTA adjustments
Tier 2 Capital5
Regulatory Capital Base
Prescribed Capital Amount
(18.6)
(3.5)
(3.2)
(25.2)
(5.0)
(5.0)
(30.2)
—
(30.2)
Available Enterprise Capital
Risk Capital3
Net capital position
81.0
3.9
(68.1)
(2.7)
13.0
1.2
1.2
—
1.2
86.2
1.6
(70.8)
(1.2)
15.4
0.5
1.6
(1.2)
0.5
87.8
24.7
112.5
(72.0)
(13.0)
(85.0)
15.9
11.7
27.5
1
2
Net Assets as at 30 June 2023 excluding Employee Share Plan Loans. Net assets include the deferred acquisition costs (DAC) component of insurance policy liabilities
and right of use asset arising from leases.
Intangible adjustments relate to goodwill, acquired intangibles and capitalised software (excluding 50% of the capitalised software held in the administration entity). It
also includes the removal of $0.8 million of capitalised costs in relation to the Tier 2 capital raising.
3 As at 30 June 2023, risk capital is held in regulated entities at 97.5% probability of adequacy (POA). Risk capital at 99% POA is held in the NOHC.
4 NOHC is a non operating holding company regulated by APRA under the Life Insurance Act.
5 ClearView raised $75m of Tier 2 subordinated notes in November 2020.
40
ClearView Annual Report 2023
Directors’ report Chart 7: Capital position as at 30 June 2023 ($M)
485.3
(28.3)
75.0
142.8
(389.2)
(115.3)
27.5
Net assets1
as at
30 June
2023
Less:
intangible
adjustments
Less:
capital base
adjustments
Tier 2
capital
Regulatory
capital base
Less:
reserved
capital2
Net capital
position
The net surplus capital position of the Group above internal benchmarks is $27.5 million at 30 June 2023 and
represents an increase of $1.7 million since 30 June 2022, predominantly driven by the change in methodology
for the treatment of capitalised software and regulatory/ ICAAP reserve changes, net of the payment of the FY22
final dividend.
The capital position is stated prior to any potential capital release from the exit of the wealth management
business and the capital utilisation from the declaration of the FY23 cash dividend.
The capital position reflects:
• The net assets of $485.3 million as outlined above.
• Under the APRA capital standards, adjustments are made to the capital base for various asset amounts that
are deducted from the Group net asset position.
•
Intangible adjustments of $28.3 million are deducted from the net assets and relate to Goodwill ($12.5 million),
Capitalised Software ($14.9 million) and costs associated with Tier 2 raising ($0.8 million). Given that the
capitalised software is now held in the shared services entity, 50% of its carrying value is deducted for capital
purposes.
• Capital base adjustments remove the deferred acquisition costs ($386.9 million) and deferred tax assets ($2.4
million) that are included in the net asset position but are not permitted to be counted in the regulatory capital
base under the APRA capital standards;
• The Tier 2 subordinated debt is incorporated into the capital base in accordance with the APRA capital
standards ($75 million). The costs associated with the raising have been deducted as part of the Intangible
adjustments.
• This results in a Group regulatory capital base, calculated in accordance with the APRA capital standards of
$142.8 million.
• Reserved capital includes the APRA supervisory adjustment for CLAL as required by APRA as part of the IDII
sustainability measures. APRA continues to engage with institutions with regard to the implementation of their
IDII action plans and potential implications on the supervisory adjustment for CLAL.
1
Net Assets as at 30 June 2023 excluding ESP Loans. Net assets include the deferred acquisition costs (DAC) component of insurance policy liabilities.
2 Reserved capital includes the minimum regulatory capital, APRA supervisory adjustment for ClearView Life as part of IDII sustainability measures and risk capital
which is additional capital held to address the risk of breaching regulatory capital
ClearView Wealth Limited
41
Directors’ report • ClearView has implemented an incurred claims treaty for lump sum and income protection business which
reduces the concentration risk exposure. There is no Asset Concentration Risk charge under LPS 117 relating to
the Swiss Re exposure as at 30 June 2023.
• As a result of limits under the incurred claims treaty, as previously reported, ClearView has re-implemented the
irrevocable letter of credit issued by a major Australian bank on behalf of Swiss Re. ClearView has increased
the dollar limit on the letter of credit back to $70 million (with effect from 30 June 2022), as an additional risk
mitigation over the medium term to further reduce any likelihood of concentration risk exposure.
• Fitch assigned ClearView a Long-term Issuer Default Rating (IDR) of ‘BBB’. At the same time, Fitch assigned
ClearView’s operating subsidiary, ClearView Life, an Insurer Financial Strength Rating (IFS) of BBB+. The
outlooks for both ratings are stable and were reaffirmed as ‘stable’.
The following graphs reflects the underlying (before tax) capital generation since FY15:
Underlying Before Tax Capital Generation1 - $m
59.6
50.4
66.4
66.8
48.2
43.3
50.3
35.5
-13.3
-7.2
-5.3
3.5
9.2
8.1
13.8
11.5
69.3
26.4
-48.8
-57.6
-64.9
-62.8
-57.6
-29.5
-40.1
-38.8
-42.9
FY15
FY16
FY17
FY18
FY19
FY20
FY21
FY22
FY23
New Business Captial Utilisation
Underlying NBPT and In-force Generation
Net Generation Before Tax
Linear (Underlying NBPT and In-force Generation)
• ClearView is now generating circa $70 million of capital1 from its in-force portfolios prior to reinvestment in
new business.
• New business capital utilisation is predominantly related to the upfront policy acquisition costs – the capital
strain varies between periods dependent on new business volumes. Each year, these acquisition costs2 are
recovered via premiums and is repaid over life of the policy (subject to lapse risk).
• The in-force capital generation reflects a combination of the Underlying NPBT achieved and policy acquisition
costs released (collected) from the in-force portfolios in a particular financial year.
1
Excluding costs considered unusual to ordinary activities in each relevant financial year as disclosed as part of full year results, tax and growth in regulatory and ICAAP
reserves. Excluding capital expenditure investment.
2 Deferred acquisition costs are the upfront costs associated with policy acquisition that are collected via the premiums from policyholders over the life of the policy.
42
ClearView Annual Report 2023
Directors’ report • The decrease in capital generation in FY20 and FY21 was driven by the timing of the staggered price changes
on the in-force LifeSolutions portfolios (relative to the cash timing of reinsurance price increases), COVID
overlays and the overall performance of the business.
• The surplus capital position and future business capital generation is anticipated to fund the net capital
expenditure impacts of the investment in the PAS.
• ClearView also has access to the Debt Funding Facility, to the extent further funding is required. The Debt
Funding Facility is repayable on 1 August 2026.
• The Group has a PCA capital coverage ratio of 4.7 times at 30 June 2023, reflecting the strength of the overall
capital position of the Group
Chart 8: Group Regulatory Capital Coverage ($M)
PCA ratio
of 4.7x
30.2
142.8
Prescribed Capital Amount
Regulatory Capital Base
Dividends and On-market 10/12 limit share buyback
The Board seeks to pay dividends at sustainable levels with a target payout ratio of between 40% and 60% of
Underlying NPAT1. The dividend policy has been set (subject to available profits and financial position) to consider
regulatory requirements and available capital within the Group.
The annual dividend program was reinstated from FY21 after a period of rebuilding and reinvestment into the
business.
ClearView’s ability to pay a franked dividend depends upon factors including its profitability, the availability of
franking credits and its funding requirements which in turn may be affected by trading and general economic
conditions, business growth and regulation.
The Board continues to seek to:
• Pay dividends at sustainable levels;
• Maximise the use of its franking account by paying fully franked dividends; and
• Seek transparent communication to the market around Embedded Value estimation and its relationship to the
prevailing share price.
A FY22 fully franked final cash dividend of 2 cents per share was paid in September 2022 and represented an
increase of 100% on the prior year.
A FY23 fully franked final cash dividend of 3 cents per share has been declared on 23 August 2023, with a record
date of 7 September 2023 (FY23 dividend is payable on 22 September 2023). This represents an increase of 50%
on the prior year and a dividend yield of 6.2% based on a 90 day VWAP share price at 30 June 2023 of $0.483
per share. The FY23 payout ratio is 54% of Underlying NPAT, the mid point of the target payout ratio.
1
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 activities. Includes amortisation of capitalised software and leases, underlying investment income and interest costs associated with
corporate debt and Tier 2 Capital. Costs associated with the incurred claims treaty are reflected as part of reinsurance costs. Excludes the equity accounted earnings
of Centrepoint Alliance.
ClearView Wealth Limited
43
Directors’ report The payment of an interim (and a final dividend) from FY24 is under consideration (coupled with a reinstatement
of the dividend reinvestment plan). Furthermore, it is intended that the target payout ratio of 40%-60% will be
reviewed post completion of the IT transformation investment and wealth management exit, to reflect the shift in
the underlying business to a cash generation position.
10/12 limit on market buy back
ClearView does not currently have a Board approved 10/12 limit on market buy-back program in place. The
previous share buy-back program expired on 19 December 2022, and no shares were bought back and cancelled
under the program in the year ended 30 June 2023. Since January 2014, the total number of shares bought back
and cancelled under the program was 1,208,824.
Employee buy-back of Executive Share Plan shares
There was no buy-back of Executive Share Plan shares from employee participants in the year ended 30 June
2023.
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.
As noted earlier in the report, the wealth management segment meets the criteria to be classified as held for
sale in the consolidated financial statements for the year ended 30 June 2023. As such it is now reported as a
discontinued operation, and therefore the EV for the wealth management business has been reflected at net asset
value as at 30 June 2023 (included in the net worth).
In light of the changed interest rate environment, a risk free rate of 4.0% has been adopted for the purposes of
the EV calculations at 30 June 2023 (30 June 2022: 3.5%).
Overall the EV was $587.1 million including franking credits or 91.2 cents per share.
The Life Insurance EV increased 8% in the year to $558.7 million including franking credits and net of capital
transfers. The net assets of the wealth management segment included in the net worth was $17 million and the
Listed segment value of $11.4 million included accrued franking credits and ESP loans.
The EV is discussed in further detail below.
EV calculations at a range of risk discount margins (DM) is shown below.
Discount rate
Risk margin over risk free rate
($M), (unless otherwise stated)
Life insurance
Wealth management
Value of In Force (VIF)
Net worth
Total EV
ESP Loans
Total EV including ESP Loans
Franking Credits @ 70%:
Life Insurance
Net worth (accrued franking credits)
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)
7%
8%
9%
3% dm
4% dm
5% dm
504.6
—
504.6
24.9
529.6
0.3
529.9
78.2
14.0
92.2
622.1
82.3
96.6
474.1
—
474.1
24.9
499.0
0.3
499.4
73.8
14.0
87.8
587.1
77.6
91.2
446.8
—
446.8
24.9
471.7
0.3
472.0
69.8
14.0
83.8
555.8
73.3
86.4
44
ClearView Annual Report 2023
Directors’ report Chart 9: EV movement waterfall
605.0
91.8
8.0
(17.2)
(13.0)
33.0
1.2
574.7
(0.6)
3.0
1.0
1.6
594.2
(9.6)
(10.1)
(7.2)
91.8
8.0
91.8
8.0
587.1
87.8
0.3
505.1
474.9
494.4
499.0
EV
ESP Loan
Franking Credits
E V - 3 0 J u n 2 0 2 2 @ 4 % d m
Divid e n d s P aid
E V - 3 0 J u n e 2 0 2 2 @ 4 % d m (restate d)
E V - 3 0 J u n e 2 0 2 3 @ 4 % d m prior to E S P lo a ns,
E ff e ct of c h a n g e in disc o u nt rates,
I m p act of Disc o ntin u a n ce E x p erie n ce
V alu e of N e w B usin ess A d d e d
M ainte n a n ce E x p e nse E x p erie n ce
E x p e cte d G ain
I m p act of Clai m s E x p erie n ce
C h a n g es in E S P L o a ns, Fra n kin g C re dits a n d O th er
E V - 3 0 J u n e 2 0 2 3 @ 4 % d m
Interest o n c orp orate d e bt, listin g a n d oth er c osts
In v est m e nt In c o m e E x p erie n c e
C PI a n d relate d tax i m p acts
Fra n kin g C re dits
The key movements in the EV between 30 June 2023
and 30 June 2022 are described in detail below.
30 June 2022 Restatement (-$17.2 million)
• Overall adverse impact of -$19.3 million from
the change in methodology to report the wealth
management business at net assets as outlined earlier
in the report.
• Partially offset by restatements made to the life
insurance segment due to modelling changes (+$2.1
million).
FY22 Final Dividend (-$13.0 million)
• The EV is reduced by the final FY22 cash dividend
(-$13.0 million) that was paid in September 2022,
representing an increase of circa 100% over the FY21
final dividend.
• The EV is stated prior to the declaration of the final
FY23 cash dividend (-$19.8 million) that will be paid
in September 2023, representing an increase of circa
50% over the FY22 final dividend.
Expected Gain (+$33.0 million)
• Expected gain predominantly represents the
expected unwind of the discount rate within the
value of the life insurance in-force portfolio and the
investment earnings on net worth.
•
It also includes the earnings of the wealth
management business over the year and those from
the interest in Centrepoint Alliance which were equity
accounted.
ClearView Wealth Limited
Value of New Business (-$0.6 million)
• The life insurance value of new business (VNB) in
FY23 is broadly neutral and implies it has earned an
8% return (based on the EV discount rate adopted).
• The VNB is suppressed by the acquisition costs
incurred relative to the new business volumes
achieved.
• New business volumes over the last few years have
been adversely impacted by broader market trends as
noted earlier in the report.
• The ClearView ClearChoice product is benefiting from
the broader reset of the industry, an increased focus
on sustainability and improved margins on the income
protection product.
• The profitability of income protection business for the
industry as a whole is expected to improve given the
launch of new products from October 2021 in line with
the APRA IDII sustainability measures.
• ClearView commenced investing in a business
transformation program in FY21 during the periods
of change and uncertainty (COVID-19 and industry
issues) in order to prepare for the projected rebound
in the life insurance market.
• FY22 reflected the overall shift in focus of ClearView
back to growth, in line with the inflection point of the
industry.
• ClearView’s sales increased by 25% to $25.2 million in
FY23 and is now achieving a circa 9% market share in
the IFA market, up from 7% in the prior year.
• ClearView has established a diversified distribution
network with over 900+ dealer groups comprising of
4,000+ advisers.
45
Directors’ report • Historically, ClearView has a strong historical track
record with a FY26 target to capture 12%-14% new
business market share.
• The VNB is therefore expected to improve (over
time) given increased new business volumes,
improved income protection margins from the
product redesign and pricing, coupled with cost
efficiencies (as the further development of the PAS
is implemented).
Life Insurance Claims (+$1.2 million)
• Continued positive underlying claims performance
(relative to assumptions) was achieved in FY23.
• An uplift in claims capability – a new team
structure, education pathways and capability
framework have been put in place.
• Material changes to the claims assumptions were
made in prior periods given the historical poor
performance of income protection claims across
the industry.
• The new product, ClearView ClearChoice,
addresses the sustainability issues required by
APRA on income protection products. As a result,
the claims experience on new income protection
products is expected to improve across the
industry, but it is too early in product life cycle to
determine experience to date on the new product.
• See further commentary on claims experience for
the year on page 33.
Lapses (+$3.0 million)
• For the year, lapses have been lower than
assumptions including allowances for the re-pricing
of the portfolios.
• There does not appear to be significant evidence
of lapses due to economic stress in FY23.
Superannuation is a significant funding source of
life insurance and the relatively low unemployment
rate has supported the lapse performance of the
business. The interest rate increases and impacts
on household budgets will continue to be closely
monitored in FY24.
• See further commentary on lapse experience on
page 34.
Maintenance Expenses (+$1.0 million)
• The key focus is on the successful implementation
of the PAS and obtaining the efficiencies from
the IT transformation, as and when the further
development of the platform is rolled out.
• The migration of the in-force portfolios and
related automation and simplification of back end
processes should lead to operating efficiencies
and improved in-force margins. These benefits are
expected to start to flow through from FY25.
• The actual maintenance overrun benefit is reflected
relative to the expected overruns that have been
included in the EV calculations.
Investment Experience (+$1.6 million)
• This reflects the investment return benefit relative
to underlying earning rate of 3.5% adopted in the
EV calculations.
• The increasing interest rate environment resulted
in the achievement of a higher underlying earning
rate on the investment portfolio and interest on
physical cash in FY23 (versus the long term earning
rate in the EV calculations).
Other Expense Impacts (-$10.1 million)
Overall adverse net expense impact that is not allowed
for in the EV calculations are as follows:
• The Group’s listed overhead costs for the year
(-$0.8 million after tax);
•
Interest costs on corporate debt of -$5.7 million
(amounts drawn down under the debt facility and
the Tier 2 subordinated notes); and
• Costs considered unusual to the ordinary activities
including those recognised in relation to the
strategic review, wealth management exit and
duplicate IT system costs (-$3.4 million).
Franking credit and ESP loan changes (-$7.2
million)
• The franking credit movement effectively reflects
the impact of movements in value of future tax
payments, noting the reduction in the franking
account balance due to the payment of the final
FY22 fully franked dividend and the restatement
of the wealth management segment at net asset
value.
• Given non-recourse nature of the ESP loans, $0.3
million is considered as part of the EV calculations
at 30 June 2023 (ESP loans have been valued at
issue price per ESP share)1.
1
ESP loans are a non-recourse loan that is accounted for as an option and not reported as a receivable on the Balance Sheet as at the reporting date. Based on the 90 day
VWAP share price of 48.3 cents per share at 30 June 2023, of the remaining 16.6 million ESP shares on issue (and included in the total shares on issue of 659.5 million),
0.8 million ESP shares are considered to be in the money with a ESP loan recoverable balance of $0.3 million. 15.8 million out of the money ESP shares would therefore be
bought back and cancelled at the lower of the issue price or the ESP loan value, thereby reducing the shares on issue to 643.7 million shares. As such, $0.3 million of ESP
loans have been added to the net assets and 643.7 million shares on issue have been used for the purposes of calculating the net asset value per share. On a fully diluted
basis, net of treasury shares, a further 11.4 million performance and restricted rights can be converted into ordinary shares - these have been excluded for the purposes of
the calculation.
46
ClearView Annual Report 2023
Directors’ report Other (-$9.6 million)
• Other includes the net impact from the change in discount rates, CPI and other related tax impacts, modelling
changes, enhancements and related items in FY23. The key driver is the increase in the risk free rate from 3.5%
to 4% given the material increase in interest rates over the year.
Chart 10: Embedded Value sensitivity analysis @ 4%DM
Inflation -0.5%;+0.5%
-3.8
3.6
Risk-free rate +1%;-1%
-19.4
Expenses +10%;-10%
-12.6
12.6
Discontinuance Rates +1%;-1%
-16.3
Claims +10%;-10%
-25.9
21.6
18.0
25.9
-30
-20
-10
00
10
20
30
Economic, Industry and Operational Outlook
•
Inflation in Australia is the highest it has been since the early 1990s.
• Higher inflation and materially increased interest rates are putting pressure on household budgets.
• Some households had built up large financial buffers but these are being used and the impacts from the
unwind of fixed rate mortgages is yet to flow through the economy.
• The Australian life insurance market is increasingly attractive with improving industry profitability driven by
structural reforms and a significant, and increasing, underinsurance gap with strong demand for life insurance
products.
• There is an improved regulatory outlook (in line with the changes to design and pricing of income protection
policies).
• There has also been significant market consolidation.
• New business volumes over the last few years have been adversely impacted by broader market trends
including the disruption in the adviser market (due mainly to regulatory factors), aggressive pricing strategies
from ClearView’s competitors, COVID-19 and ClearView’s focus on customer retention initiatives during this
period.
• ClearView’s strategic focus has shifted back to new business sales, 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.
• Plans are underway to increase ClearView’s exposure to underwriting risk for new business, thereby reducing
reinsurance costs and increasing sum insured retained that will result in higher new business profit over
time. This confidence to increase the underwriting risk exposure is due to the increased size of the in-force
portfolios, improved industry profitability and product sustainability measures seen in the Group’s performance
this year.
• ClearView has implemented a leadership change with a focus now on operational excellence and strategy
execution. ClearView continues to uplift capability with a data and analytics focus allowing for deeper insights.
• 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 FY25.
ClearView Wealth Limited
47
Directors’ report • 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
substantially offset cost inflation pressures.
• ClearView is in a strong position and is regaining
new business share, seeking to optimise insurance
margins. Continued outperformance in profitable
segments is a key initiative.
• The divestment from the wealth management
segment in FY24 remains a core focus to achieve
strategic benefits and reduce regulatory risk.
• ClearView is now a strategically focused business of
what it does best: Life Insurance.
• Consistent with all insurers globally, ClearView
is preparing for the implementation of the new
insurance accounting standard, AASB 17 - Insurance
Contracts, effective 1 July 2023. This will represent
a material change in the accounting of life insurance
contracts, previously dealt with under a margin on
services approach. Refer to page 19 and Note 9.6
for further details.
Financial Outlook
• The FY23 record life insurance result reflects
improving margins and the benefits of the
transformation and simplification program that has
been implemented since FY21.
• Further growth in new business market share to
9.2% was achieved in the year (up from 5.1% in
FY21), with new business up 25% to $25.2 million.
• Life Underlying NPAT margin of 12.4% was achieved
in FY23, which is operating within the FY26 target
Underlying NPAT margin range of 11% - 13%.
lapse rates remained subdued in FY23, noting
superannuation is a significant funding source of life
insurance.
• ClearView has a strong Balance Sheet and capital
base that remains resilient to various stress
scenarios. The net assets are backed by cash and
highly rated securities.
• The net surplus capital position of the Group above
internal benchmarks is $27.5 million at 30 June 2023
and is stated prior to any potential capital release
from the wealth management business or payment
of the FY23 final cash dividend of $19.8 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 multi year
transformation period.
• The forecast capital generation allows for
progressive increased new business generation (and
market share) and staggered price increases of the
LifeSolutions in-force portfolio (the next phase of
the current pricing cycle commencing in January
2023).
• A final fully franked FY23 final dividend of 3 cents
per share was declared (up 50% on the prior
comparable period). The Group’s dividend policy
remains unchanged at 40%-60% of Underlying
NPAT. The target payout ratio is intended to be
reviewed post completion of the IT transformation
investment and wealth exit to reflect the shift
in the business to a cash generation position.
Considerations are also underway to commence
paying an interim dividend (as well as a final
dividend) from FY24.
• An increase in interest rates is, overall, for a business
• The near-term economic outlook remains cautious
given pressures on household budgets. Overall
like ClearView a net positive - inflation-linked
premiums broadly offset cost inflation pressures.
48
ClearView Annual Report 2023
Directors’ report • Key FY26 Life insurance targets are as follows:
FY26
Goals4
New Business
Market Share1
Gross
Premiums
In-force Premium
Market Share1
12-14%
$400m
~4%
Life Insurance
Underlying
NPAT Margin2
11-13%
Dividend
Policy
40-60%
of Underlying NPAT3
• A pathway has now been established to grow to ~$400m of in-force premiums. Based on the FY26 target
market shares for new business (12%-14%) and in-force (~4.0%), the FY26 target closing in-force premium is
~$400m.
• No FY24 direct guidance has been provided given the implementation of the new accounting standard - AASB
17. The FY24 Underlying NPAT base year will be impacted by implementation of AASB 17 given the material
change to accounting standards.
• ClearView is in the process of finalising its AASB 17 implementation but in the medium term, AASB 17 is not
expected to impact fundamental economics including underlying cash flows, growth rates and end point of
earnings in FY26.
• Underlying NPAT is targeted to continue to grow at double digits off the FY24 AASB 17 Underlying NPAT base
at its target FY26 Underlying NPAT margin of 11% -13%.
Changes in state of affairs
Other than noted elsewhere in this report, there were no other significant changes in the state of affairs of the
Group, during the year ended 30 June 2023.
Subsequent events
FY23 Final Dividend
A final fully franked FY23 cash dividend of 3 cents per share or $19.8 million has been declared subsequent to
year end. This represents an increase of 50% on the prior year. The FY23 payout ratio is 54% of Underlying NPAT,
the mid point of the target payout ratio.
Centerpoint Alliance dividend declaration
Subsequent to year end, Centerpoint Alliance has declared a fully franked ordinary dividend of 2.0 cents per share
will be payable. The record date will be 15 September 2023 and the payment date will be 29 September 2023.
1 ClearView calculations based on NMG Risk Distribution Monitor Reports for Retail Advice In-force and New Business Analysis for relevant
2
periods – NMG Market NB includes total of 'Retail' consistently applied (that is, IFA, Bank Advice and Aggregator channels)
Is calculated as Life Insurance Underlying NPAT divided by Gross Premium Income. Under AASB 17 basis and stated prior to any AIACF
impairment charges on stepped premium business or loss recognition on level premium business.
3 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 activities. Includes amortisation of capitalised software and leases, underlying investment
income and interest costs associated with corporate debt and Tier 2 Capital. Costs associated with the incurred claims treaty are reflected as
part of reinsurance costs.
4 FY26 goals based on AASB 17 FY24-26 business plan forecasts – currently aligned to implementation program of work and subject to change.
ClearView Wealth Limited
49
Directors’ report Remuneration
Report
This Remuneration Report for the year ended 30 June 2023 forms part of the Directors’ Report. It has been
prepared in accordance with the Corporations Act 2001 (Cth) (the Act), the Corporations Regulations 2001 (Cth)
and AASB 124 Related Party Disclosures and audited as required by the Act. It also includes additional information
and disclosures that are intended to enable a deeper understanding by shareholders of ClearView’s remuneration
governance and practices.
50
ClearView Annual Report 2023
Directors’ report 1. People covered by this report
This report covers Directors and Key Management Personnel (KMP) which are defined as those who have the
authority and responsibility for planning, directing and controlling the activities of ClearView Wealth Limited
(ClearView).
Name
Position1
Non-Executive Directors
Geoff Black
Independent Non-Executive Chairman
Michael Alscher
Non-Executive Director
Gary Burg3
Jennifer Lyon
Independent Non-Executive Director
Independent Non-Executive Director
Nathanial Thomson
Non-Executive Director
Eloise Watson4
Non-Executive Director (Alternate to
Nathanial Thomson)
Edward Fabrizio5
Independent Non-Executive Director
Susan Young2
Executives
Independent Non-Executive Director
Simon Swanson7
Managing Director
Athol Chiert
Chief Financial Officer
Christopher Blaxland-
Walker
Group Executive, Distribution
Cloe Reece
Chief Risk Officer
Deborah Lowe9
Group Executive, Wealth Management and
Chief People Officer
Gerard Kerr9
Group Executive, Life Insurance
Hicham Mourad10
Chief Technology Officer
Judilyn Beaumont
Group Executive, General Counsel and
Corporate
Justin McLaughlin6
Chief Investment Officer
Nadine Gooderick8
Managing Director
Joanne Faglioni11
Group Executive, Operations
Nick Kulikov12
Group Executive, Product and Pricing
✓ = Member, C = Chair
Term as
KMP1
Audit
Nomination &
Remuneration
Risk & Com-
pliance
✓
C
✓
Full year
Full year
Full year
Full year
Full year
Part year
Part year
Part year
C
C
✓
✓
✓
C
✓
✓
✓
✓
✓
✓
C
✓
✓
Full year
Full year
Full year
Full year
Full year
Full year
Full year
Full year
Part year
Full year
-
-
1
Position shown as the KMP’s last held position. If an individual did not serve as a KMP for the full financial year, all remuneration is disclosed from the date the
individual was appointed as a KMP to the date they ceased as a KMP unless otherwise specified.
2 Resigned as a Non-Executive Director effective from 31 March 2023.
3 Chair of the Audit Committee from 1 April 2023 to 28 June 2023.
4 Appointed as Alternate Non-Executive Director to Nathanial Thomson effective from 15 December 2022.
5 Appointed as Independent Non-Executive Director and Chair of the Audit Committee effective from 28 June 2023.
6 Ceased as KMP effective from 1 August 2022 and employment on 31 March 2023.
7 Ceased as Managing Director on 30 June 2023. Employment continues in a a different role until 31 August 2023.
8 Appointed as Managing Director effective from 1 July 2023. Previously was Group Executive, Technology and Development.
9 Ceased as KMP on 30 June 2023. Deborah Lowe’s employment continues until the exit of the wealth management business is substantially completed. Gerard Kerr’s
employment continues for a 6-month period effective 1 July 2023. A one month notice period for both parties will apply to terminate the arrangement early.
10 Position title updated to Chief Technology Officer effective from 1 July 2023. Previously was Program Director, PAS Transformation Project.
11 Appointed as Group Executive, Operations effective from 1 July 2023. Previously was Chief Claims Officer.
12 Appointed as Group Executive, Product and Pricing effective from 1 July 2023. Previously was Head of Life Insurance Product and Pricing.
ClearView Wealth Limited
51
Directors’ report 2. Remuneration Overview
2.1 ClearView’s Remuneration Framework Overview
During FY23, the remuneration structures in place were unchanged from the prior year, and the same structure is
expected to apply in the future years. ClearView’s approach to executive remuneration and the remuneration cycle
under the framework applicable to FY23 is set out below.
Fixed pay
Purpose
Delivery
FY 23
Approach
Variable remuneration
Short term variable remuneration
Long term variable remuneration
To motivate KMPs to reach or
exceed the company goals for the
financial year.
To reward the KMPs for achieving key
objectives in the long term.
60% delivered in cash, 40%
delivered in Restricted Rights
subject to a 3 year deferral period.
Performance Rights entitled to the value
of a share of ClearView, subject to LTVR
performance hurdle with a Measurement
Period of 4 years.
To pay fairly and
according to
external market
conditions for
each role.
Base Salary,
Superannuation,
and Other
Benefits.
Short term remuneration and STVR
Long term remuneration and LTVR
Opportunity as % of Fixed pay
Opportunity as % of Fixed pay
Managing
Director
Target
50%
Stretch
60%
Other executives
30%
36%
Managing
Director
Other
executives
Target
100% - 120%
50% - 70%
Weightings
2%
16%
4%
9%
50%
13%
6%
Financial Measures
Underlying Net Profit After Tax1
Non Financial Measures
Strategic development and New business market share
Risk Management, Culture and Cyber Security
Technology Transformation and Projects
Lapse and Claims Management
Wealth Strategy
Shareholder Engagement
Underpinned by gate openers being risk management,
culture and values with the 2023 deferral component
settled on 30 June 2026.
Performance conditions
2023 LTVR Issue: The TSR vesting
is based upon the Company’s
performance against two equally-
weighted vesting conditions on 30 June
2026, being share price range of $0.72
– $0.78; and Embedded Value range
of $625m – $675m. The target level of
vesting is 100%.
2022 LTVR Issue: The TSR vesting
condition is based upon a market
capitalisation of the Company of
$483.75m on 30 June 2025. The target
level of vesting is 100%.
2021 LTVR Issue: The TSR vesting
condition is based upon an annual
growth rate of 25% over the
Performance Period – this equates to a
market capitalisation of the company
of $450m on 30 June 2024. The target
level of vesting is 100%.
Malus and
Clawback
In the event that the Board forms the opinion that a Participant has committed an act of fraud,
defalcation or gross misconduct in relation to the company then the Participant will forfeit all
unvested entitlements under the plan (STVR & LTVR), including all unvested rights.
1
Underlying NPAT consists of consolidated profit after tax excluding amortisation, the effects of changing discount rates on policy liabilities and costs considered
unusual to the Group’s ordinary activities. Includes amortisation of capitalised software and leases, underlying investment income and interest costs associated with
corporate debt and Tier 2 Capital. Costs associated with the incurred claims treaty are reflected as part of reinsurance costs. Includes equity accounted earnings of
Centrepoint Alliance for the relevant period.
52
ClearView Annual Report 2023
Directors’ report FY23
FY24
FY25
FY26
Remuneration Framework Timeline FY23
Fixed pay
STVR Performance
period
Audit & STVR Assessment
60% Cash Award*
40% Restricted Rights*
LTVR Performance Period - Performance Rights with a TSR Vesting Condition as well as a EV Condition.
*STVR Cash awards are generally awarded following the release of the audited Annual Report. Restricted rights will be issued in relation to the deferred portion of the
STVR and will vest three years post the measurement period (ie 30 June 2026). Subsequent to the completion of the strategic review, the Board has resolved that the
overall remuneration framework remains unchanged including the 3 year deferral period for the prior years deferred STVR components.
2.2 FY23 Company Performance At-A-Glance
The following outlines the Company’s performance in FY23, which is intended to assist in demonstrating the link
between performance, value creation for shareholders, and executive reward:
FY End
Date
30/6/2023
30/6/2022
30/6/2021
30/6/2020
30/6/2019
Net profit
after tax
($’000)
17,108
21,175
6,679
13,081
3,959
Underlying
NPAT from
Continuing
Operations2
($’000)
Share price (cents)
Start
End Change
Dividends
(Final)
(cents)
Change in
shareholders
wealth
Total
value
EV1
($m)
%
34,499
25,655
22,722
14,738
20,450
68.0
50.0
27.5
66.0
116.0
48.5
68.0
50.0
27.5
66.0
(19.5)
18.0
22.5
(38.5)
(50.0)
3.0
2.0
1.0
—
—
(16.5)
(24.3)%
20.0
23.5
40.0%
85.5%
(38.5)
(58.3)%
(50.0)
(43.1)%
587
605
640
643
673
EV per
share1
(cents)
91.2
92.2
95.7
95.3
99.4
Key achievements during the year under review include:
• upgrade and pricing realignment of the ClearView ClearChoice life insurance product suite leading to increased
market share gains and new business volumes;
•
•
•
implementing simplification and structural changes to deliver long term growth: including exit of the wealth
management business (underway) leading to a core focus on the life insurance business;
leadership changes and transition on the retirement of the Managing Director to allow for business
simplification, with further investment in capabilities and people, with a focus on the more efficient and
extensive use of data and new analytical tools in the life insurance business;
investment in sales and margin-focused initiatives, including commencing the implementation of the IT
transformation program which will improve efficiency for advisers and add flexibility to ClearView’s business
over time; and
• continued repricing of the LifeSolutions in-force portfolios aligned to industry sustainability issues.
1
Embedded Value (EV) at 4% discount rate margin, including a value for future franking credits, franking credits included in the net worth and ESP loans. Excluding
EV attributed to the financial advice business and the wealth business. Franking credits have been included in the net worth and prior periods have been restated to
reflect this. Risk free rate of 4% in FY23 (FY22: 3.5%; Prior years: 2%).
2 Consists of Underlying NPAT of consolidated profit after tax excluding UNPAT of the wealth segment which is held for sale, amortisation, the effects of changing
discount rates on policy liabilities and costs considered unusual to the Group’s ordinary activities. Includes amortisation of capitalised software and leases, underlying
investment income and interest costs associated with corporate debt and Tier 2 Capital. Costs associated with the incurred claims treaty are reflected as part of
reinsurance costs. It also includes equity accounted earnings of Centrepoint Alliance for the relevant period.
ClearView Wealth Limited
53
Directors’ report 2.3 FY23 Executive Remuneration Opportunities and Outcomes At-A-Glance
The following charts outline the remuneration opportunities under ClearView Wealth’s executive remuneration
structures, with the outcomes dependent on performance over FY23 for STVR and LTVR, and the ‘achieved’
remuneration payable in respect of the completed FY23 year and performance delivered:
MD/CEO
- Achieved
MD/CEO
- Target
Executives
- Achieved
Executives
- Target
71.43%
16.25% 10.83%
70.86%
17.48%
11.66%
77.71% 12.92% 8.61%
78.03% 13.18% 8.79%
-%
10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 110%
Fixed pay
Cash STVR
Deferred STVR
Note: “Achieved” refers to Fixed Pay received during FY23 and Cash STVR awarded in respect of FY23
performance (i.e. after the end of the year) and any LTVR vested during the year.
MD/CEO includes both current and former MD/CEO. Executives exclude MD/CEO and include Executive KMP for
the full year in FY23.
During FY23, subsequent to the completion of the strategic review, the Board has resolved that the performance
conditions for the 2020 LTIP were not met and hence all of the 2020 LTIP Performance Rights lapsed.
The table below presents remuneration paid or vested for Executive KMP in relation to FY23 and FY22 which
includes:
• Fixed pay including salary sacrificed benefits and superannuation contributions;
• The value of cash settled STVR awarded following completion of the financial year;
• The value of STVR Restricted Rights vested following the completion of the financial year; and
• The value of LTVR awarded in prior years that has vested during the financial year.
54
ClearView Annual Report 2023
Directors’ report Fixed Package (incl.
following completion of
of the financial year
completion of the
Total STVR awarded
following completion
vested following
Name
Super)
the financial year (cash)
(deferred)
measurement period/FY
Amount
($)
% of TRP
Amount
($)
% of TRP
Amount
($)
% of TRP
Amount
($)
% of TRP
Total STVR Restricted
Rights that vested
Value of LTVR that
Vested
LTVR from
change
in value
during the
vesting
period
Amount
($)
Total
Remu-
neration
Package
(TRP)
Amount
($)
S Swanson1
2023
2022
A Chiert
2023
2022
C Blaxland-Walker
2023
2022
C Reece
2023
2022
D Lowe2
2023
2022
G Kerr2
2023
2022
H Mourad
2023
2022
J Beaumont
2023
2022
N Gooderick
2023
2022
725,584
715,000
70%
188,993
71%
174,224
440,346
430,000
390,346
380,000
400,346
175,772
395,742
400,384
460,346
450,000
370,346
360,769
420,692
400,769
403,381
380,000
78%
81%
77%
81%
79%
81%
80%
80%
77%
80%
79%
81%
79%
80%
78%
81%
74,322
62,174
68,487
54,524
65,470
25,516
60,333
58,321
81,818
66,002
58,990
49,762
69,023
59,738
67,871
52,600
18%
17%
13%
12%
14%
12%
13%
12%
12%
12%
14%
12%
13%
11%
13%
12%
13%
11%
125,995
116,150
12%
12%
49,548
41,449
45,658
36,349
43,647
17,010
40,222
38,881
54,546
44,000
39,327
33,173
46,015
39,826
45,248
35,066
9%
8%
9%
8%
9%
8%
8%
8%
9%
8%
8%
7%
9%
8%
9%
7%
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—% 1,040,572
—% 1,005,374
—%
—%
—%
—%
564,216
533,623
504,491
470,873
—% 509,463
—%
218,298
—%
—%
496,297
497,586
—%
596,710
—% 560,002
—% 468,663
—% 443,704
—%
535,730
—% 500,333
—%
—%
516,500
467,666
1 As Managing Director for the full year.
2 As KMPs for the full year.
ClearView Wealth Limited
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
55
Directors’ report 3. ClearView Wealth’s Remuneration Strategy, Policy and Framework
3.1 Remuneration Policy
ClearView’s Remuneration Policy (Policy) was updated in 2023 and is compliant with the obligations set out
by the Australian Prudential Regulatory Authority (APRA) under Prudential Standards CPS 510 ‘Governance’,
CPS 511 ‘Remuneration’ and SPS 510 ‘Governance’. It also forms part of ClearView’s overall Risk Management
Framework (in accordance with the Prudential Standards). The Board has approved the Policy and retains overall
responsibility for all remuneration decisions in respect to persons relevant to each entity. The Policy is reviewed at
least once every three years to ensure ongoing compliance with regulatory changes as more information becomes
known and the changes are due to take effect.
ClearView has an established Nomination and Remuneration Committee (Remuneration Committee) which,
among other things, is responsible for overseeing the remuneration and human resource practices for the Group.
In discharging these responsibilities, the Remuneration Committee adheres to ClearView’s Remuneration Policy,
which is in place to:
• Outline employee obligations and ClearView’s obligations;
• Set out roles, responsibilities and accountabilities of the KMP;
• Set out clear reporting and controls;
• Define various terms to ensure a common understanding; and
• Clarify what happens if this policy or associated procedures are breached.
3.2 KMP Remuneration Governance Framework
The following outlines the interface between the Remuneration Governance Framework and the Risk Framework:
Board
Delegation
Delegation
Accountability
Independent Assurance
Managing Director
External
Auditors
Internal
Audit
Legal or other
professional
advice
Delegation
Accountability
Senior Management Team
Assurance,
Oversight
through
Reporting
Nomination and
Remuneration Committee
Risk and Compliance
Committee
Audit
Committee
56
ClearView Annual Report 2023
Directors’ report 3.3 Executive Remuneration - Fixed Pay (FP), Total Remuneration Package (TRP) and the Variable
Remuneration Framework
The primary objectives of the Remuneration Policy are to ensure that remuneration is competitive, aligned with
the Company’s business objectives in both the short term and the long term, and appropriate for the results
delivered by the individual. In accordance with this objective, the Company has structured remuneration packages
to provide an appropriate mix of fixed and performance based pay components which are based on both the
individual’s performance and Group performance. By adopting a robust approach to remuneration, the Group
aims to attract and retain top talent. The remuneration framework is also designed to reward prudent risk-taking,
support effective risk management and prioritise the long term financial soundness of the business and its
shareholders.
Total executive remuneration is made up of three components:
• Fixed Remuneration;
• Short Term Variable Remuneration (STVR), made up of:
• Cash; and
• Restricted Rights; and
• Long Term Variable Remuneration (LTVR) made up of Performance Rights.
Variable Remuneration is intended to balance risk and business outcomes, with a blend of ‘at-risk’ remuneration
and incentives. Metrics selected are intended to be linked to the primary drivers of value creation for stakeholders,
and successful implementation of the long term strategy over both the short and long term. Thresholds are
intended to be a near-miss of expectations, while Target is intended to be challenging but a realistically achievable
objective with a probability of around 50% to 60%. Stretch on the other hand is designed to be exceptionally
challenging with a probability of around 10% to 20%.
Fixed Remuneration is made up of base salary and superannuation. Base salary includes cash salary and any
salary sacrifice items. The Group provides employer superannuation contributions of the relevant statutory SG
rate of each executive’s base salary, capped at the relevant maximum contribution base. To ensure an employee’s
Fixed Remuneration is competitive, it is benchmarked against median salary survey results from a group of
comparable Australian financial service companies.
Fixed Remuneration is reviewed annually, following the end of the 30 June performance year, which may have
flow-on implications for variable remuneration which is expressed as a percentage of Fixed Pay.
ClearView Wealth Limited
57
Directors’ report 3.4 FY23 Short Term Variable Remuneration (STVR) Plan
A description of the STVR structure applicable for FY23 is set out below:
Purpose
Measurement
Period
Opportunity
To provide at-risk remuneration and incentives that reward executives for meeting annual goals.
The objectives chosen are intended to assist long-term shareholder value development and are
linked to the long-term strategy on an annual basis.
The financial year of the company (1 July - 30 June).
Managing Director
Other executives
Opportunity as % of Fixed Pay
Target
50%
30%
Stretch
60%
36%
Outcome
Metrics and
Weightings
For FY23, the following metrics and weightings applied:
• Financial Measure: Underlying Net Profit After Tax1 – 50%
• Non-financial Measures: Business Targets - 50% including:
• Risk management, culture and cyber security
• Lapse and claims management
• Strategic development
• New business market share
• Wealth strategy
• Technology transformation and projects
• Shareholder engagement
These metrics were selected because they were viewed by the Board as being the key drivers
of value creation, as applicable to the role, for FY23. Refer to the section “The Link Between
Performance and Reward for FY23” for additional information regarding performance outcomes
relative to target.
Gate
The following Gates apply:
• Risk Management
• Culture and Values
Award,
Settlement and
Deferral
Delisting and
Corporate
Action
Board
Discretion
Awards will be calculated and settled following the auditing of the accounts.
60% of any STVR Award is to be paid in cash, 40% of any STVR Award is to be settled in the form of
a grant of Restricted Rights subject to an exercise restriction ending on 30 June 2026. Any grant of
deferred STVR Restricted Rights will be calculated based on the 90-day VWAP leading up to the end
of the FY23 performance period.
In the event the Board determines that the Company will be subject to a de-listing, any unvested
restricted rights may be subject to an accelerated vesting date in the Board’s absolute discretion.
The Board has sole discretion to determine that some or all unvested restricted rights held by a
participant lapse on a specified date if allowing the rights to be exercised would, in the opinion
of the Board, result in an inappropriate benefit to the participant. This is intended to give effect
to the Company’s approach to Malus and Clawback.
Malus and
Clawback
In the event that the Board forms the opinion that a Participant has committed an act of fraud,
defalcation or gross misconduct in relation to the Company then the Participant will forfeit all
unvested entitlements under the STVR plan, including all unvested restricted rights.
1
Consists of Underlying NPAT 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 activities. Includes amortisation of capitalised software and leases, underlying investment income and interest costs associated with
corporate debt and Tier 2 Capital. Costs associated with the incurred claims treaty are reflected as part of reinsurance costs. It also includes equity accounted earnings
of Centrepoint Alliance for the relevant period.
58
ClearView Annual Report 2023
Directors’ report 3.5 FY23 Long Term Variable Remuneration (LTVR) Plan
A description of the LTVR structure applicable for FY23 is set out below:
Purpose
Instrument
Measurement
Period
Opportunity
Grant
Calculation,
Performance
Metric and
Vesting Scale
Re-testing
Settlement
Term
Delisting and
Corporate
Action
Cessation of
Employment
To provide at-risk remuneration and incentives that reward executives for meeting long-term
value creation targets specified by the Board at the start of the financial year, and to align
executives' interests with those of shareholders.
The LTVR is in the form of Performance Rights with a nil Exercise Price, which are subject to
performance and service vesting conditions.
1 July 2022 to 30 June 2026 (4 Years)
Managing Director
Other executives
Opportunity as % of Fixed Pay
Target
100% - 120%
50%-70%
The number of Performance Rights in a Tranche of FY23 LTVR granted for the issuance was
calculated via the application of the following formula:
Target LTVR $ ÷ Right Value
where Right Value is the share price aligned to the LTVR target market capitalisation.
Vesting is based on the Company’s performance against two equally-weighted conditions,
being share price of $0.72 - $0.78 (TSR); and Embedded Value of $625m - $675m. The TSR
target was selected to ensure that the overall remuneration framework contains a balance
of internal and external measures, such that the STVR is based on a set of internal measures
to drive business plan outcomes and the LTVR is based on longer term measures aligned
with shareholder value creation - a combined TSR and embedded value outcome has been
adopted to achieve this outcome. Nil vesting occurs if the performance condition is not met.
No re-testing facility is available under the CWL Rights Plan Rules.
The Performance Rights are “Indeterminate Rights” which may be settled in the form of a
Company Share (including a Restricted Share), or cash equivalent, upon valid exercise. It is
generally expected that Shares will be used.
Performance Rights have a term of 15 years from the grant date and if not exercised within
the term the Performance Rights will lapse.
In the event of delisting the vesting conditions set out in the invitation will cease to apply
and unvested rights will vest in accordance with the terms of the LTVR rules set out in the
CWL Rights Plan (as updated from time to time). In the event of other change of control
events, vesting conditions continue to apply and any changes will be subject to the Board’s
absolute discretion.
Vested Performance Rights will be automatically exercised. Unvested Performance Rights
will lapse except in circumstances such as death, total or permanent disability, genuine
redundancy or other circumstances determined by the Board in its discretion (Qualifying
Cessation). Performance Rights that do not lapse at the termination of employment will
continue to test for vesting at the end of the Measurement Period.
Board Discretion The Board has discretion to adjust the number of Performance Rights that ultimately vest
if it forms the view that the unadjusted outcome is not appropriate to the circumstances
that prevailed over the measurement period and/or to the contribution of a Participant to
outcomes over the measurement period.
Malus and
Clawback
In the event that the Board forms the opinion that a Participant has committed an act of
fraud, defalcation or gross misconduct in relation to the company then the Participant will
forfeit all unvested entitlements under the LTVR Plan.
ClearView Wealth Limited
59
Directors’ report
3.6 FY23 Non-Executive Director (NED) Remuneration
3.6.1 Fee Policy
The following outlines the principles that ClearView Wealth applies to governing NED remuneration:
Policy
Non-Executive Directors are remunerated by way of one base fee (inclusive of
Superannuation Guarantee) that is based on market rates for comparable companies for the
time commitment and responsibilities undertaken by Non-Executive Directors. The level of
remuneration for each Non-Executive Director is set by the Remuneration Committee, within
the total annual remuneration limits approved by the shareholders at a general meeting. Any
increase to individual Non-Executive Director remuneration must be approved by the Board
on the recommendation of the Remuneration Committee after engaging and taking advice,
where appropriate. All reasonable out of pocket expenses incurred in connection with a
Director’s duties on behalf of ClearView Wealth are reimbursed. The following outlines the
Board Fees for FY23:
Role
Chair
Member
Main Board
Audit
Remuneration
200,000
85,000
30,000
30,000
Risk
30,000
*Fees are inclusive of superannuation
Aggregate
Board Fees
The total amount of fees paid to Non-Executive Directors in the year ended 30 June 2023 is
within the aggregate amount as approved by shareholders of $1,000,000.
Non-Executive Directors are not entitled to participate in equity schemes of the Company and are not entitled to
receive performance-based bonuses. Non-Executive Directors are not entitled to retirement benefits other than in
respect of any superannuation entitlements.
60
ClearView Annual Report 2023
Directors’ report 4. The Link Between Performance and Reward in FY23
The Board views the outcomes of remuneration for FY23 performance as appropriately aligned to stakeholder
interests, given the strong group and individual performance against annual objectives and progress towards
strategic objectives made by the executive team.
4.1 FY23 STVR Outcomes
The STVR plan is designed to reward executives for the achievement against annual performance objectives set
by the Board at the beginning of the performance period. The payment of an STVR is dependent on delivery of
performance against a range of outcome metrics. The performance metrics and outcomes of assessment against
those metrics are summarised below:
Metric/Measure
Underlying Net Profit After Tax
Weight
50.0%
Achieved
60%
Outcome (% of Target)
Underlying NPAT consists of
consolidated profit after tax
excluding amortisation, the
The Group has outperformed its
financial metric targets for FY23.
ClearView’s Underlying NPAT
effects of changing discount rates
exceeded target, largely driven
on policy liabilities and costs
by favourable lapse and claims
considered unusual to the Group’s
results and a higher interest rate
ordinary activities. Includes
amortisation of capitalised
environment. This reflects the
strength of our core insurance
software and leases, underlying
business.
120%
Threshold
50%
Target
100%
Stretch
140%
investment income and interest
costs associated with corporate
debt and Tier 2 Capital. Costs
associated with the incurred claims
treaty are reflected as part of
reinsurance costs. It also includes
equity accounted earnings of
Centrepoint Alliance for the
relevant period.
ClearView Wealth Limited
61
Directors’ report 100%
Threshold
50%
Target
100%
Stretch
140%
Risk Management, Culture and
16.1%
16.1%
Cyber Security
Continued improvement in the risk
The improvement of the risk
maturity profile of the business in
maturity profile is considered to be
on track with broad achievement
of the goals over FY23. No major
cyber security incidents occurred
in FY23.
FY23.
Culture survey results, including
management to reflect continued
improvement and targets.
A set of performance metrics
and baseline expectations of risk
performance was implemented
across ClearView in FY23.
The overall goal is “leadership
of risk culture within areas
of accountability through
demonstrated achievement across
all baseline expectations and risk
management “core metrics” during
the period”.
No major cyber security incidents.
Lapse and Claims Management
4.2%
4.5%
The claims management
Claims management
transformation program continues
transformation program continues
to be implemented (including
to be implemented successfully
positive claimant experience) with
including rehabilitation programs,
the claims performance aligning
return to work outcomes
to the Business Plan. Customer
and process improvements.
focused retention initiatives.
Achievement of a lapse and claims
experience profit in FY23.
Strategic Development and New
Business Market Share
4.6%
4.6%
FY22 reflected the overall shift in
Improved market share on launch
focus of ClearView back to growth,
of ClearView ClearChoice product
in line with the inflection point of
achieved (circa 9%). New business
the industry. New business market
volumes increased by 25% in FY23
share and sales targets have been
with relaunch of growth strategy.
set.
107%
Threshold
50%
Target
100%
Stretch
140%
100%
Threshold
50%
Target
100%
Stretch
140%
62
ClearView Annual Report 2023
Directors’ report Wealth Strategy
13.9%
4.9%
Implementing the required
structural changes to enable
long term growth: including
the commencement of
Announced that ClearView will
exit the wealth management
business. ClearView entered
into a share sale agreement in
implementation of the exit of the
February 2023 for the sale of
wealth management business
CFML to Human Financial, subject
(simplification of overall line of
to certain conditions precedent.
35%
Threshold
50%
Target
100%
Stretch
140%
business structure).
The superannuation fund trustee
ClearView Life Nominees Pty
Limited is, at the same time,
considering a number of options
and the best way forward for the
superannuation fund, ClearView
Retirement Plan. The outcome
of these considerations will
inform the roadmap and timing
for the overall exit of the wealth
management business. These
considerations are ongoing.
Technology Transformation and
9.6%
6.6%
Projects
Investment in a new Policy
The PAS system was launched for
Administration System (PAS) to
improve operational efficiency
new business of the ClearView
ClearChoice product in October
and to be easy to do with with for
2021 with further development and
advisers. Implementation of AASB
investment in the functionality of
17 project for the change in the
the platform. This is considered a
69.5%
Threshold
50%
Target
100%
Stretch
140%
accounting standards.
multi year transformation project.
The first phase of the project is
expected to be completed by 31
December 2023, with planning
having commenced for the next
phase, being the migration of the
in-force policies onto the new
platform.
The implementation of the AASB
17 project is nearing completion,
with implementation of the new
standard effective 1 July 2023.
Shareholder Engagement
1.6%
0.8%
Improved shareholder
Increased shareholder engagement
communications and engagement
and education with further
in light of completion of the
investor briefings planned, investor
strategic review. Further
material continue to be refined and
simplification of the investor
improved.
materials.
50%
Threshold
50%
Target
100%
Stretch
140%
ClearView Wealth Limited
63
Directors’ report Overall the STVR outcomes for FY23, taking into account both the financial and non-financial measures as
determined through the Board’s assessment are outlined below:
Name
S Swanson1
A Chiert
C Blaxland-Walker
C Reece
D Lowe2
G Kerr2
H Mourad
J Beaumont
N Gooderick
Opportunity (as % of FP less
Super)
Max STVR
Target STVR
Total STVR
Awarded
($)
STVR Out-
come as %
of Maxi-
mum
STVR Out-
come as %
of Target
STVR For-
feited as %
of Maxi-
mum
STVR For-
feited as %
of Target
60%
36%
36%
36%
36%
36%
36%
36%
36%
50%
30%
30%
30%
30%
30%
30%
30%
30%
314,988
123,870
114,145
109,117
100,555
136,364
98,317
115,038
113,119
75%
83%
87%
81%
75%
87%
79%
81%
83%
90%
100%
104%
97%
90%
105%
95%
97%
100%
25%
17%
13%
19%
25%
13%
21%
19%
17%
10%
—%
—%
3%
10%
—%
5%
3%
—%
1
As Managing Director for the full year.
2 As KMPs for the full year.
64
ClearView Annual Report 2023
Directors’ report 5. Statutory Tables and Supporting Disclosures
5.1 Executive KMP Statutory Remuneration for FY23
The following table outlines the statutory remuneration of Executive KMP.
Short term benefits
Post em-
ployment
benefits
Long term
benefits
Other ben-
efits
Share based payments
Total
Salary &
Fees
$
STVR
Cash11
$
Other
benefits and
allowances
Super-annu-
ation
Long
Service
Leave
Perfor-
Executive
mance /
Termination
Payment12
Share
Plan13
Restricted
Rights14,15
Perform-
ance
based
$
$
$
$
$
$
%
$
Executives
N Gooderick6
2023
2022
A Chiert
2023
2022
399,167
67,871
16,809
379,426
52,600
9,681
25,373
23,634
4,025
1,836
407,539
74,322
420,227
62,174
21,377
19,325
25,373
23,634
9,880
13,262
C Blaxland-Walker
2023
2022
359,118
68,487
361,392
54,523
88,626
86,574
25,373
23,634
9,300
13,142
J Beaumont
2023
2022
H Mourad8
2023
2022
C Reece3
2023
2022
J Faglioni9
2023
N Kulikov10
2023
381,444
69,023
393,897
59,738
21,377
19,325
25,373
23,634
2,609
2,554
354,672
58,990
345,124
49,762
14,998
9,400
25,373
23,634
377,517
65,470
179,447
25,516
—
—
—
—
—
—
—
—
25,373
10,944
—
—
2,001
1,958
1,146
429
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
59,451
22.23%
572,696
47,861
19.51%
515,038
22,641
17.28%
561,132
78,470
22.79%
617,092
24,132
16.11%
575,036
65,966
19.91%
605,232
61,055
23.19%
560,881
54,151
20.58%
553,299
54,367
22.21%
510,401
47,500
20.37%
477,378
53,719
22.78%
523,225
19,047
18.93%
235,383
—
0.00%
—
0.00%
—
—
ClearView Wealth Limited
65
Directors’ report Short term benefits
Post em-
ployment
benefits
Long term
benefits
Other ben-
efits
Share based payments
Total
Salary &
Fees
$
STVR
Cash11
$
Other
benefits and
allowances
Super-annu-
ation
Long
Service
Leave
Perfor-
Executive
mance /
Termination
Payment12
Share
Plan13
Restricted
Rights14,15
Perform-
ance
based
$
$
$
$
$
$
%
$
Former
Executives
J McLaughlin4
2023
2022
265,077
—
376,139
49,332
—
—
20,428
(5,530)
262,281
23,634
14,818
S Swanson5
2023
2022
D Lowe7
2023
2022
G Kerr7
2023
2022
720,256
188,993
701,933
174,224
21,377
19,325
25,612
15,933
23,634
22,764
365,121
60,333
380,749
58,321
12,293
8,878
25,373
23,634
17,710
5,078
429,611
81,818
439,159
66,001
14,998
9,400
25,373
23,634
1,808
1,808
T Kardash1
2023
2022
—
140,185
J Myerscough2
2022
182,875
—
—
—
—
—
—
27,865
25,755
2,095
395,300
4,705
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(53,371)
(10.92)%
488,885
60,265
20.91%
524,188
39,893
22.62%
1,012,064
234,615
34.75%
1,176,495
—
23,088
16.55%
503,918
4,851
66,258
22.74%
547,769
—
—
76,747
25.15%
630,355
64,834
21.63%
604,837
— (38,000)
100.00%
(38,000)
—
—
52,691
8.18%
643,891
—
—%
187,580
1
Ceased as General Manager, Licensee Services on 27 November 2021.
2 Ceased as Interim Chief Risk Officer and KMP on 31 January 2022.
3 Appointed as Chief Risk Officer effective from 1 February 2022.
4 Ceased as KMP on 1 August 2022 and employment on 31 March 2023. The table above shows his remuneration for the FY23 year up to the cessation date of his
employment.
5
S Swanson ceased as Managing Director and KMP on 30 June 2023. His remuneration in the current year is shown for the full financial year. As his employment
continues in a different role until 31 August 2023, his remuneration from 1 July 2023 (including any termination payments, vesting, lapsing or forfeiting of any ESP
shares and restricted rights) will be included in the Remuneration Report for the year ending 30 June 2024.
6 Appointed as Managing Director effective from 1 July 2023.
7 Ceased to hold a KMP role on 30 June 2023. D Lowe’s employment continues until the exit of the wealth management business is substantially completed. G
Kerr’s employment continues for a 6-month period effective 1 July 2023. A one month notice period for both parties will apply to terminate the arrangement early.
Remunerations from 1 July 2023 will be included in the Remuneration Report for the year ending 30 June 2024.
8
Position updated to Chief Technology Officer effective from 1 July 2023.
9 Appointed as Group Executive, Operations effective from 1 July 2023. Table above shows FY23 remunerations as a KMP.
10 Appointed as Group Executive, Product and Pricing effective from 1 July 2023. Table above shows FY23 remuneration as a KMP.
11 Cash amount of the STVR payable in relation to FY23 and FY22 financial year and accrued as at 30 June 2023 and 2022 respectively. Amount to be paid, will be based
on actual earnings for the year, on approval of the results of the relevant financial year.
12 Payment in lieu of notice, which incorporates statutory notice and severance entitlements.
13 Benefit calculated under the Binomial model in respect of the future value of the ESP shares issued. ESP shares are ordinary shares issued and held under a holding
lock until vesting date.
14 Restricted and Performance Rights granted under the CWL Rights Plan covering the LTVR as well as the deferred component of the STVR respectively. Restricted and
Performance Rights can be settled in cash or equity based on the terms of each award.
15 Reflects the accruals or reversal for all previously granted Performance or Restricted Rights that remain unvested following cessation of employment up to the end
of each performance period or due to forfeiture. For the unvested LTVR awards, the accrual expense could represent brought forward expenses of awards granted in
prior years including those amounts which would otherwise have been included in future years. For forfeited rights that are not vested, accrual from prior years are
reversed in the event of an executive KMP departure or failure to meet non-market based conditions.
66
ClearView Annual Report 2023
Directors’ report 5.2 Non-executive Director (NED) KMP Statutory Remuneration for FY22
The compensation of each NED is set out below:
Year
Short term ben-
efits
Post employment
benefits
Total
Performance
based
GST / Superannua-
tion
Salary & Fees
Superannuation
$
$
$
180,996
181,887
92,500
85,000
85,000
85,000
85,000
85,000
158,371
138,687
—
19,005
18,189
200,000
200,076
—
—
—
—
—
—
16,629
13,869
—
92,500
85,000
85,000
85,000
85,000
85,000
175,000
152,555
—
Non-executive Directors
G Black
G Burg
N Thomson / E
Watson1
M Alscher1
J Lyon
E Fabrizio3
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
Former Non-executive
Director
S Young2
2023
2022
86,727
133,195
9,106
26,871
95,833
160,067
%
—
—
—
—
—
—
—
—
—
—
—
—
—
incl. Super
incl. Super
excl. GST
excl. GST
excl. GST
excl. GST
excl. GST
excl. GST
incl. Super
incl. Super
—
incl. Super
incl. Super
1 Mr Thomson / Ms Watson and Mr Alscher have agreed they will receive no fees as Directors although fees are payable to Crescent Partners Management Pty Ltd of
which they are employees.
2 Ms Young retired as a Director on 31 March 2023.
3 Appointed as an Independent Non-Executive Director effective from 28 June 2023
ClearView Wealth Limited
67
Directors’ report 5.3 Equity Interests and Changes During FY23
5.3.1 ESP Plan and financial assistance under the ESP Plan
The ESP Plan was originally established to assist the recruitment of the senior management team (and employees)
at the inception of ClearView in its current form.
It should be noted that the ESP has not been active since 2017 but some executives still hold shares from that
plan. A description of the ESP structure is set out below:
Purpose
Offers
Financial
Assistance
The Executive Share Plan (ESP) was originally established to assist in the recruitment of
the senior management team and employees (at the inception of ClearView in its current
form). This allowed for the recruitment of individuals with deep life insurance and wealth
management experience, that could execute on a core strategy. Participation in the ESP
showed ClearView’s recognition of the employees’ contribution, by providing an opportunity
to share in the future growth and profitability of ClearView. The ESP was set up in the
context of the ‘start up phase’ and the nature of the ClearView business at the time when
the scope and the timing of any future success of the business was still unknown and
uncertain.
No shares have been issued under the ESP since 14 June 2017 and Clearview does not
intend to issue equity in the future under this plan.
The Company has provided financial assistance to Eligible Employees for the purposes of
subscribing for Shares under the ESP. The financial assistance is a non-recourse loan equal
to the purchase value of the Shares and is repayable in accordance with the terms of the
accompanying Invitation or as follows:
• For Share issues prior to 14 February 2013 – within 60 days (or a longer period
determined by the Board in its discretion) after the 5th anniversary of the grant of the
financial assistance (unless it is required to be repaid at an earlier date owing to the
operation of the Rules); or
•
immediately in the event of certain ‘disqualifying circumstances’ including failure to meet
performance or vesting conditions, cessation of the Employee Participant’s employment
in circumstances defined in the ESP Rules or termination of the Participant’s contract
with a Group Company for the provision of services.
For Employee Participants, the financial assistance is secured over the shares and rights
attached to the shares. The Board has approved granting an extension to the loan term of
all Employee Participants who remain employees at the expiration of their loan term for a
period until a Change in Control of the Company (as defined in the ESP Rules). The Board
has used discretion (for a period of time) to allow a reasonable repayment period on the
departure of employees (for example on exit of the advice business). Interest is accrued on
the non-recourse loans for vested shares.
Holding Lock
The shares granted under the ESP to participants are subject to a holding lock restricting
the holder from dealing with the shares, unless otherwise provided under the Invitation.
Change of
Control
Under the ESP Rules, all performance and vesting conditions in relation to Shares held by an
Eligible Employee who is an Employee Participant are deemed to have been satisfied upon a
Change of Control unless stated otherwise in the participants Invitation Offer.
The financial assistance provided under the ESP are non recourse loans. Under AASB2, these non recourse loans
and the related ESP shares are treated as options.
68
ClearView Annual Report 2023
Directors’ report The following table outlines the 14,271,030 ESP shares issued to KMP or their related entities as at the date of this
report (2022: 15,771,030 shares) and their vesting conditions. No performance conditions are applicable to the
ESP shares issued.
S Swanson
A Chiert
C Blaxland-
Walker
D Lowe7
Share series
Series 10 1,6
Series 11 1,6
Series 12 1,3,6
Series 7 1,2,4
Series 26 5
Series 16 1,3,4
Series 43
Series 44
Series 45
Series 51a
Series 51b
Fair value at
grant date
(pre-modifica-
tion1)
Fair value at
grant date
(post-modifi-
cation1)
Exercise
price per
share ($)
Aggregate
value at
grant date
($)
0.11
0.08
0.06
0.07
0.29
0.10
0.20
0.23
0.27
0.19
0.22
0.11
0.08
0.06
0.10
n/a
0.13
n/a
n/a
n/a
n/a
n/a
0.50
0.58
0.65
0.49
0.57
0.50
1.01
1.01
1.01
0.96
0.96
224,074
323,295
241,927
98,057
289,798
127,366
16,718
19,372
21,883
49,733
57,586
Vesting
condi-
tions
Vested
Vested
Vested
Vested
Vested
Vested
Vested
Vested
Expiry date8
30/11/2023
30/11/2023
30/11/2023
Change in Control
Change in control
Change in Control
Change in Control
Change in Control
Change in Control
Change in Control
Change in Control
1 On the 14th February 2013, the Board approved a change to the rules of the ESP which changed the interest rate charged on the financial assistance granted to the
ESP Participants from the RBA official cash rate plus 25 basis points to zero percent. This resulted in changes to the inputs of the option pricing model which had an
impact on the fair value of the option at the date of the change.
2 Change of control provision was triggered on 23 October 2009 by Guiness Peat Group (GPG) increasing its shareholding above 50%. As a result, the vesting
conditions for employees that were issued shares prior to the date of change of control were accelerated.
3 Change of control provision was triggered on 26 September 2012 by CCP Bidco obtaining a shareholding above 50%.
4
5
The Board approved granting an extension of the loan term until such time as there is a change of control in the Company.
Special condition relating to shares issued to KMP in Series 26. The shares will vest on change of control and can be sold. The vested shares or the sale proceeds will
be held for in escrow for a period of 12 months.
6 Mr Swanson ceased as Managing Director on 30 June 2023. In accordance with Mr Swanson’s employment contract, Mr Swanson is entitled to a long term incentive
comprising 10 million shares in accordance with the ESP Plan Rules and vesting progressively over three years from the commencement date of his contract and all
shares have subsequently vested. The Board approved granting an extension of the loan term to 30 November 2023.
7 Ceased to hold a KMP role on 30 June 2023. Employment continues in a different role until the exit of the wealth management business is substantially completed.
Any unvested ESP shares will fully lapse on cessation of employment and the associated expense reversed in accordance with the terms of the relevant plan rules. The
outcome will be included in the Remuneration Report for the year ending 30 June 2024.
8
Expiry represents either the relevant vesting or loan term period.
ClearView Wealth Limited
69
Directors’ report 5.3.2 Movement of ESP shares under non-recourse loans
Movements in ESP shares held by executive KMP during the reporting period are set out below:
Held at
Held at
1 July 2022
Granted
Exercised
Forfeited
30 June 2023
Vested
during the
year
Vested and ex-
ercisable at 30
June 20232
No.
No.
No.
No.
No.
No.
No.
Executives
A Chiert1
C Blaxland-Walker1
Former Executives
J McLaughlin3
S Swanson4
D Lowe5
2,500,000
1,247,525
1,500,000
10,000,000
523,505
—
—
—
—
—
—
—
—
—
2,500,000
1,247,525
— (1,500,000)
—
—
—
—
—
10,000,000
523,505
—
—
—
—
—
1,500,000
1,247,525
—
10,000,000
—
1
2
Additional non-recourse loans up to a maximum of $1 per vested ESP share held in May 2017 were granted and is secured by the vested ESP shares.
Interest is charged on vested shares as resolved by the Board.
3 Ceased as a KMP on 1 August 2022 and employment on 31 March 2023.
4 Ceased to hold a KMP role on 30 June 2023. Employment continues in a different role until the exit of the wealth management business is substantially completed.
The Board approved granting an extension of the loan term to 30 November 2023 relating Mr Swanson’s vested ESP shares. The outcome will be included in the
Remuneration Report for the year ending 30 June 2024.
5 Ceased to hold a KMP role on 30 June 2023. Employment continues in a different role until the exit of the wealth management business is substantially completed.
Any unvested ESP shares will fully lapse on cessation of employment and the associated expense reversed in accordance with the terms of the relevant plan rules. The
outcome will be included in the Remuneration Report for the year ending 30 June 2024.
70
ClearView Annual Report 2023
Directors’ report 5.3.3 Performance Rights and Restricted Rights
The following outlines the accounting values and potential future costs of equity remuneration granted but not
yet exercised for executive KMP:
Grant
Type
Vesting
Conditions
Grant Date6
No. of
rights7
Total
Value at
Grant8
Value Ex-
pensed in
FY2310
Vested/
Forfeited
Max Value
to be Ex-
pensed
in Future
Years
Name
Issue
Executives
N Gooderick1
2023
LTVR
TSR and Service
29/01/23
256,410
74,538
5,999
A Chiert
C Blaxland-
Walker
2022
2022
2021
2021
2023
2022
2022
2021
2021
STVR
None9
01/02/23
63,756
35,066
— Vested
LTVR
LTVR
STVR
LTVR
STVR
LTVR
LTVR
TSR and Service
12/11/21
277,777
TSR and Service
None9
31/03/21
12/11/21
62,481
28,745
TSR and Service
29/01/23
320,512
56,167
4,374
14,332
93,173
7,606
598
— Vested
7,499
None9
01/02/23
75,361
41,449
— Vested
TSR and Service
12/11/21
347,222
70,208
TSR and Service
28/10/20
374,885
26,242
9,507
3,586
STVR
None9
12/11/21
74,686
37,238
— Vested
2020
LTIP
TSR and Service
01/09/19
—
151,515
(47,500) Forfeited
2023
2022
2022
2021
2021
LTVR
STVR
LTVR
LTVR
TSR and Service
29/01/23
256,410
74,538
5,999
None9
01/02/23
66,089
36,349
— Vested
TSR and Service
12/11/21
277,777
56,167
TSR and Service
29/10/20
299,908
20,994
7,606
2,869
STVR
None9
12/11/21
59,503
29,668
— Vested
2020
LTIP
TSR and Service
01/09/19
—
121,212
(38,000) Forfeited
J Beaumont
2023
LTVR
TSR and Service
29/01/23
256,410
74,538
5,999
2022
2022
2021
2021
2023
2022
2022
2021
2021
2023
2022
2022
STVR
None9
01/02/23
72,410
39,826
— Vested
LTVR
LTVR
STVR
LTVR
STVR
LTVR
LTVR
STVR
LTVR
STVR
LTVR
TSR and Service
12/11/21
277,777
TSR and Service
28/10/20
149,954
56,167
10,497
7,606
1,435
None9
12/11/21
68,990
34,398
— Vested
TSR and Service
29/01/23
256,410
74,538
5,999
None9
01/02/23
60,316
TSR and Service
12/11/21
277,777
33,174
56,167
TSR and Service
11/01/21
149,954
10,499
— Vested
7,606
1,435
None9
12/11/21
61,288
30,558
— Vested
TSR and Service
29/01/23
256,410
74,538
5,999
None9
01/02/23
30,927
TSR and Service
02/03/22
105,753
17,010
21,383
— Vested
4,073
H Mourad
C Reece
68,539
—
36,859
1,771
—
85,674
—
46,074
10,628
—
—
68,539
—
36,859
8,502
—
—
68,539
—
36,859
4,251
—
68,539
—
36,859
4,251
—
68,539
—
15,274
1
Appointed as Managing Director effective from 1 July 2023.
2 Ceased as a KMP on 27 November 2021.
3 Ceased as a KMP on 1 August 2022 and employment on 31 March 2023.
4 Ceased as Managing Director on 30 June 2023. Employment continues until 31 August 2023. The Board has resolved that Mr Swanson’s unvested LTVRs will fully lapse
on cessation of employment and the associated expense will reverse in accordance with the terms of the relevant rewards. Details will be included in the Remuneration
Report for the year ending 30 June 2024.
5 Ceased as a KMP on 30 June 2023. .
6
7
8
Legal grant dates. The accounting grant dates for valuation purposes can be different.
Performance Rights held at 30 June 2023 including restricted rights granted under the ClearView LTIP and ClearView Rights Plan covering the LTVR as well as the
deferred component of the STVR. Rights can be settled in cash or equity based on the terms of each award and discretion of the Board.
The fair value of the 2023, 2022 and 2021 LTVR at their respective accounting grant date of 29/01/23, 25/08/21 and 21/08/20 was $0.1934 (50% of the rights subject
to market conditions) and $0.388 (50% of the rights subject to EV conditions), $0.2022 and $0.07 respectively. The fair value was calculated using Monte Carlo
simulation method.
9 While there is no performance or service vesting conditions applicable, the malus clauses apply. The minimum value to be expensed in future years for each of the
above grants is nil. Current year STVR award will be granted following completion of the financial year. Details will be disclosed in the Remuneration Report in the next
financial year.
10 A reversal of previous years expense resulting in a negative expense may occur in the event of an executive KMP departure or failure to meet non market-based
conditions including failure for Gate Openers.
ClearView Wealth Limited
71
Directors’ report Grant
Type
Vesting
Conditions
Grant Date6
No. of
rights7
Total
Value at
Grant8
Value Ex-
pensed in
FY2310
Vested/
Forfeited
Max Value
to be Ex-
pensed
in Future
Years
Name
Issue
Former Executives
T Kardash2
2022
LTVR
TSR and Service
15/11/21
115,750
23,405
—
—
2021
2021
LTVR
STVR
TSR and Service
10/01/21
299,908
20,994
None9
12/11/21
58,506
29,171
— Vested
2020
LTIP
TSR and Service
01/09/19
—
121,212
(38,000) Forfeited
J McLaughlin3 2022
STVR
None9
01/02/23
59,796
32,888
— Vested
2022
LTVR
TSR and Service
2021
2021
LTVR
STVR
TSR and Service
12/11/21
02/11/20
—
—
56,167
(11,701) Forfeited
18,369
(8,419) Forfeited
None9
12/11/21
54,216
27,032
— Vested
2020
LTIP
TSR and Service
01/09/19
—
106,060
(33,250) Forfeited
S Swanson4
2023
2022
2022
2021
2021
LTVR
STVR
LTVR
LTVR
TSR and Service
29/01/23
1,025,641
298,154
23,998
None9
01/02/23
211,181
116,150
— Vested
TSR and Service
12/11/21
1,111,111
224,667
30,424
TSR and Service
28/10/20
1,199,632
STVR
None9
12/11/21
191,890
83,974
95,672
11,476
— Vested
D Lowe5
G Kerr5
2020
LTIP
TSR and Service
01/09/19
— 484,849 (152,000) Forfeited
2023
2022
2022
2021
2021
LTVR
STVR
LTVR
LTVR
TSR and Service
29/01/23
256,410
74,538
5,999
None9
01/02/23
70,692
TSR and Service
12/11/21
277,777
TSR and Service
15/02/21
262,420
38,881
56,167
18,369
— Vested
7,606
2,510
STVR
None9
12/11/21
70,915
35,358
— Vested
2020
LTIP
TSR and Service
01/09/19
—
106,060
(33,250) Forfeited
LTVR
STVR
LTVR
LTVR
2023
2022
2022
2021
2021
2021
TSR and Service
29/01/23
384,615
111,808
8,999
None9
01/02/23
80,001
44,001
— Vested
TSR and Service
12/11/21
416,666
84,250
TSR and Service
10/03/21
187,443
12/11/21
34,337
12/07/21
180,000
90,000
13,121
17,120
STVR
None9
Signon
None
11,409
1,793
— Vested
— Vested
—
—
—
—
—
—
—
—
—
274,156
—
147,437
34,010
—
—
68,539
—
36,859
7,440
—
—
102,809
—
55,289
5,314
—
—
1
Appointed as Managing Director effective from 1 July 2023.
2 Ceased as a KMP on 27 November 2021.
3 Ceased as a KMP on 1 August 2022 and employment on 31 March 2023.
4 Ceased as Managing Director on 30 June 2023. Employment continues until 31 August 2023. The Board has resolved that Mr Swanson’s unvested LTVRs will fully lapse
on cessation of employment and the associated expense will reverse in accordance with the terms of the relevant rewards. Details will be included in the Remuneration
Report for the year ending 30 June 2024.
5 Ceased as a KMP on 30 June 2023. .
6
7
8
Legal grant dates. The accounting grant dates for valuation purposes can be different.
Performance Rights held at 30 June 2023 including restricted rights granted under the ClearView LTIP and ClearView Rights Plan covering the LTVR as well as the
deferred component of the STVR. Rights can be settled in cash or equity based on the terms of each award and discretion of the Board.
The fair value of the 2023, 2022 and 2021 LTVR at their respective accounting grant date of 29/01/23, 25/08/21 and 21/08/20 was $0.1934 (50% of the rights subject
to market conditions) and $0.388 (50% of the rights subject to EV conditions), $0.2022 and $0.07 respectively. The fair value was calculated using Monte Carlo
simulation method.
9 While there is no performance or service vesting conditions applicable, the malus clauses apply. The minimum value to be expensed in future years for each of the
above grants is nil. Current year STVR award will be granted following completion of the financial year. Details will be disclosed in the Remuneration Report in the next
financial year.
10 A reversal of previous years expense resulting in a negative expense may occur in the event of an executive KMP departure or failure to meet non market-based
conditions including failure for Gate Openers.
72
ClearView Annual Report 2023
Directors’ report 5.3.4 Related party interests
Apart from those disclosed below, there is no other related party interest held by other KMP directly or indirectly.
The relevant interest of each Non-Executive Director and their related parties in ordinary shares and securities and
movement during the year:
Shares held at
Subordinated
notes held at
1 July 2022
1 July 2022
Net move-
ment of shares
due to other
changes
Net movement
of subordi-
nated notes
due to other
changes
Shares held at
30 June 2023
Subordinated
notes held at
30 June 2023
No.
50,000
27,212
10,918,090
83,092
No.
—
—
100
—
No.
50,000
—
—
—
No.
—
—
—
—
No.
100,000
27,212
10,918,090
83,092
No.
—
—
100
—
G Black
J Lyon
G Burg1
S Young2
1
2
Interest amount of $83,650 was paid to G Burg during FY23 in respect of the subordinated notes held.
The shares held at 30 June 2023 represent the shares held at the date S Young ceased to be a Non-Executive Director.
The relevant interest of each Executive and their related parties in ordinary shares and securities and movement
during the year:
Shares held at
1 July 2022
Shares
received on
exercise of
ESP
Shares
received on
exercise of
LTIP
Shares
received on
exercise of
LTVR, STVR
Net move-
ment of shares
due to other
changes
Shares held at
30 June 2023
No.
No.
No.
No.
No.
No.
Executives
N Gooderick
A Chiert
C Blaxland-Walker
Former Executives
J McLaughlin1
S Swanson1
D Lowe1
63,212
722,266
197,811
320,145
5,550,000
144,065
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
63,212
722,266
197,811
320,145
5,550,000
144,065
1
The shares held at 30 June 2023 represent the shares held at the date they ceased to be KMPs.
ClearView Wealth Limited
73
Directors’ report 5.4 KMP Service Agreements
5.4.1 Executive KMP Service Agreements
The following outlines current executive KMP service agreements:
Executives
N Gooderick
Term
Ongoing
A Chiert
Ongoing
Notice period by either
the employee or the
Company
Other
12 months notice
from the Company, 6
months notice from
the employee
In the case of redundancy, a severance payment
of 13 weeks' base salary (or any greater payment
required under the National Employment Standards
(NES)).
6 months notice
for the first 3 years
of employment, 3
months notice after 3
years
For all terminations after the first 3 years of
employment an additional 26 week payment is
payable.
C Blaxland-Walker
Ongoing
12 months
In the case of redundancy, a severance payment
of 13 weeks' base salary (or any greater payment
required under the National Employment Standards
(NES)).
J Faglioni, N Kulikov,
H Mourad
Ongoing
6 months notice
from the Company, 3
months notice from
the employee
In the case of redundancy, a severance payment
of 13 weeks' base salary (or any greater payment
required under the National Employment Standards
(NES)).
J Beaumont, C Reece
Ongoing
13 weeks
In the case of redundancy, a severance payment
of 13 weeks' base salary (or any greater payment
required under the National Employment Standards
(NES)).
Former Executives1
Term
Notice period by either
the employee or the
Company
Other
S Swanson
Ongoing
12 months
D Lowe
Ongoing
6 months
G Kerr
Ongoing
13 weeks
In the case of redundancy, a severance payment
of 13 weeks' base salary (or any greater payment
required under the National Employment Standards
(NES)).
In the case of redundancy, a severance payment
of 13 weeks' base salary (or any greater payment
required under the NES).
In the case of redundancy, a severance payment
of 13 weeks' base salary (or any greater payment
required under the NES).
1
Ceased as KMP effective 30 June 2023. Employment continues in a different role. Any termination benefit paid where relevant from 1 July 2023 will be disclosed in the
Remuneration Report for the year ending 30 June 2024.
*Note: Under the Corporations Act, broadly the Termination Benefit Limit is 12 months average Salary (over prior 3 years) unless shareholder approval is obtained.
74
ClearView Annual Report 2023
Directors’ report 5.4.2 Non-executive directors (NEDs) Service
Agreements
The appointment of Non-executive Directors is
subject to a letter of engagement. The NEDs are
not eligible for any termination benefits following
termination of their office, nor any payments other
than those required under law such as in respect of
superannuation. There are no notice periods applicable
to either party under this approach.
5.5 Other Statutory Disclosures
5.5.1 Other transactions
Certain directors and KMP, or their personally-related
entities (Related Parties), hold positions in other
entities that result in them having control or significant
influence over the financial or operating policies
of those entities. None of these entities entered
into material transactions with the Company or its
subsidiaries in the FY23 reporting periods. The terms
and conditions of any transactions entered into were
no more favorable than those available, or which might
reasonably be expected to be available, on similar
transactions with unrelated entities on an arms-length
basis.
Directors fees were paid to Crescent Capital Partners
Pty Limited, the manager of the parent entity’s
majority shareholder CCP Bidco Pty Limited.
Apart from those disclosed above, other transactions
with directors, executives and their related parties
are conducted on arm’s length terms and conditions,
and are deemed trivial or domestic in nature. These
transactions are in the nature of personal investment,
life insurance policies and superannuation.
5.5.2 External Remuneration Consultants
During FY23 the Board engaged approved External
Remuneration Consultants Godfrey Remuneration
Group Pty Ltd (GRG) to provide KMP remuneration
advice and other services as outlined below:
• assistance with reviewing policies and practice
including CPS 511, Clawback and Malus Policy,
update Equity Plan Rules, Remuneration Report –
$13,200 (incl. GST);
• senior executives remuneration benchmarking –
$22,000 (incl. GST)
All current Directors are subject to re-election by
shareholders at least every 3 years. All current KMP
contracts provide for an annual review of Fixed
Remuneration.
Signed in accordance with a resolution of the Board of
Directors made pursuant to s298(2) of the Corporation
Act 2001. On behalf of the Directors
Geoff Black
Chairman
22 August 2023
ClearView Wealth Limited
75
Directors’ report
Auditor’s Independence
Declaration
76
ClearView Annual Report 2023
Directors’ report Ernst & Young
200 George Street
Sydney NSW 2000 Australia
GPO Box 2646 Sydney NSW 2001
Tel: +61 2 9248 5555
Fax: +61 2 9248 5959
ey.com/au
Auditor’s Independence Declaration to the Directors of ClearView Wealth
Limited
As lead auditor for the audit of the financial report of ClearView Wealth Limited for the financial year
ended 30 June 2023, I declare to the best of my knowledge and belief, there have been:
a. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit;
b. No contraventions of any applicable code of professional conduct in relation to the audit; and
c. No non-audit services provided that contravene any applicable code of professional conduct in
relation to the audit.
This declaration is in respect of ClearView Wealth Limited and the entities it controlled during the
financial year.
Ernst & Young
Louise Burns
Partner
22 August 2023
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
ClearView Wealth Limited
77
Directors’ report
2023 financial report contents
Consolidated statement of profit or loss and other
comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the Financial Statements
1.
a)
b)
c)
d)
e)
f)
g)
h)
i)
j)
2.
2.1
2.2
2.3
2.4
2.5
2.6
2.7
3.
3.1
3.2
3.3
3.4
4.
4.1
4.2
About this report
General Information
Statement of compliance
Basis of preparation
Basis of consolidation
Business combinations
Materiality
Significant accounting policies
Critical judgements and estimates
Risk management
Coronavirus (COVID-19) impact
Results for the year
Segment performance
Earnings per share
Dividends
Fee and other revenue
Investment income
Operating expenses
Taxes
Receivables, payables and investments
Receivables
Payables
Investments
Financial Risk Management
Non-financial assets and liabilities
Goodwill and intangibles
Recoverability of intangible assets and
goodwill
4.3
Provisions
5.
5.1
5.2
Life insurance and investment contracts
Accounting for life insurance and
investment contracts
Disaggregated information by Statutory
Fund
79
80
81
83
85
86
86
86
86
87
88
88
89
89
93
94
95
99
100
100
101
102
103
108
109
110
111
113
119
120
121
123
125
126
128
5.3
5.4
5.5
5.6
5.7
6.
6.1
6.2
6.3
6.4
6.5
6.6
7.
7.1
7.2
8.
8.1
8.2
8.3
8.4
8.5
9.
9.1
9.2
9.3
9.4
9.5
9.6
9.7
Sources of profit
Policy liabilities
Capital adequacy
Actuarial methods and assumptions
Critical accounting judgements and key
sources of estimation uncertainty
Capital structure and capital risk
management
Issued capital
Movements in reserves
Shares granted under the executive
share plan
Subordinated Debt
Borrowings
Capital risk management
Employee disclosures
Key management personnel
compensation
Share based payments
131
132
133
134
138
139
140
141
142
142
143
143
145
146
146
Related parties and other Group entities 149
Equity interests in subsidiaries
Investment in associate
Transactions between the Group and its
related parties
Investment in controlled unit trusts
Discontinued operations
Other disclosures
Notes to the Consolidated Statement of
cash flows
Contingent liabilities and contingent
assets
Leases
Capital commitments
Guarantees
New accounting standards
Subsequent events
150
151
152
155
155
159
160
160
161
163
163
164
166
167
168
176
178
Directors’ declaration
Independent auditor’s report
Shareholders’ and Note holders’ information
Directory
The Financial Report was authorised for issue by the Directors on 22 August 2023.
78
ClearView Annual Report 2023
Consolidated statement of profit or loss and other
comprehensive income
For the year ended 30 June 2023
Continuing operations
Revenue from continued operations
Premium revenue from insurance contracts
Outward reinsurance expense
Net life insurance premium revenue
Fee and other revenue
Investment income
Operating revenue before net fair value gains on
financial assets
Net fair value gains/(losses) on financial assets
Share of net profit of investment in associate net of
impairment
Net operating revenue
Claims expense
Reinsurance recoveries revenue
Commission and other variable expenses
Operating expenses
Depreciation and amortisation expense
Finance costs
Change in life insurance policy liabilities
Change in reinsurers’ share of life insurance liabilities
Change in life investment policy liabilities
Profit/(Loss) before income tax expense
Income tax (expense)/benefit
Profit/(Loss) from continuing operations
(Loss)/Profit from discontinued operations
Total comprehensive income/(loss) for the year
Attributable to:
Equity holders of the parent
Earnings per share - continuing operations
Basic (cents per share)
Diluted (cents per share)
Earnings per share
Basic (cents per share)
Diluted (cents per share)
Note
Consolidated
2022
$'000
2023
$'000
Restated1
2023
$'000
Company
2022
$'000
325,131
(120,961)
204,170
72
13,313
299,621
(115,423)
184,198
690
5,414
217,555
4,189
190,302
(12,795)
666
222,410
(132,774)
94,913
(53,895)
(81,395)
(5,384)
(17,307)
(21,027)
23,083
(242)
28,382
(7,434)
20,948
(3,840)
17,108
534
178,041
(173,264)
128,042
(46,556)
(76,277)
(4,796)
(9,558)
78,727
(57,040)
64
17,383
(5,986)
11,397
9,778
21,175
—
—
—
107
24,946
25,053
—
666
25,719
—
—
—
(2,209)
—
(8,062)
—
—
—
15,448
2,923
18,371
—
18,371
—
—
—
6,739
9,047
15,786
—
534
16,320
—
—
—
(4,165)
—
(5,723)
—
—
—
6,432
1,992
8,424
—
8,424
17,108
21,175
18,371
8,424
3.27
3.27
2.67
2.67
1.80
1.79
3.34
3.32
—
—
—
—
—
—
—
—
2.4
2.5
8.2
2.6
2.6
2.6
5.4
5.4
5.4
2.7
8.5
2.2
2.2
1
The comparative consolidated statement of profit or loss and other comprehensive income has been re-presented to show the Wealth Management business, together
with the Financial Advice business, as discontinued operations separately from continuing operations.
To be read in conjunction with the accompanying Notes.
ClearView Wealth Limited
79
Consolidated statement of financial position
As at 30 June 2023
Assets
Cash and cash equivalents
Investments
Receivables
Assets held for sale
Fixed interest deposits
Reinsurers’ share of life insurance policy liabilities
Deferred tax asset
Property, plant and equipment
Right-of-use assets
Investment in associate
Goodwill
Intangible assets
Total assets
Liabilities
Payables
Current tax liabilities
Liabilities directly associated with assets held for sale
Provisions
Lease liabilities
Life insurance policy liabilities
Life investment policy liabilities
Liability to non-controlling interest in controlled
unit trusts
Deferred tax liabilities
Borrowings
Subordinated debt
Total liabilities
Net assets
Equity
Issued capital
Retained earnings/(losses)
Share based payments reserve
Profit reserve
Total equity
To be read in conjunction with the accompanying Notes.
Consolidated
30 June
2022
30 June
2023
30 June
2023
Company
30 June
2022
Note
$'000
$'000
$'000
$'000
3.3
3.1
8.5
5.4
2.7
9.3
8.2
4.1
4.1
3.2
2.7
8.5
4.3
9.3
5.4
5.4
2.7
6.5
6.4
6.1
6.2
6.2
6.2
94,522
394,885
30,457
1,926,893
150,735
2,289,624
35,003
—
22,897
56,329
7,257
647
7,839
13,440
4,011
24,107
2,897
26,367
11,915
468
10,456
13,734
12,511
17,368
13,929
443,822
9,915
11,956
—
—
291
—
—
13,440
—
—
13,369
433,278
16,037
—
—
—
462
—
—
13,734
—
—
2,583,284
2,571,078
493,353
476,880
52,181
12,550
1,908,908
8,598
8,598
16,035
325
—
585
16,000
74,200
50,297
1,425
—
6,321
11,160
(10,676)
1,295,378
645,612
606
16,000
73,857
2,486
12,550
—
28
—
—
—
—
35
16,000
74,200
2,880
1,425
—
19
—
—
—
—
114
16,000
73,857
2,097,980
2,089,980
105,299
94,295
485,304
481,098
388,054
382,585
466,843
11,769
6,692
—
466,655
7,881
6,562
—
469,250
(111,647)
4,285
26,166
469,062
(111,647)
4,155
21,015
485,304
481,098
388,054
382,585
80
ClearView Annual Report 2023
Consolidated statement of changes in equity
For the year ended 30 June 2023
Consolidated
Balance at 1 July 2021
Profit for the year
Total comprehensive income for the year
Recognition of share based payments1
Transfer from accrued employee entitlements2
Dividend paid
ESP loans settled through dividend
ESP shares vested and exercised
ESP shares vested/(forfeited)
Transfer from reserve to share capital
Balance at 30 June 2022
Profit for the year
Total comprehensive income for the year
Recognition of share based payments1
Transfer from accrued employee entitlements2
Dividend paid
ESP loans settled through dividend
ESP shares vested/(forfeited)
Balance at 30 June 2023
Share
based
payments
reserve
$'000
14,617
—
—
434
351
—
208
(3,112)
(5,936)
—
6,562
—
—
(166)
435
—
199
(338)
6,692
Share
capital
$'000
447,448
—
—
—
—
—
—
9,648
5,580
3,979
466,655
—
—
—
—
—
—
188
466,843
Retained
earnings/
(losses)
$'000
(6,611)
21,175
Attributable
to the
owners of
the parent
$'000
459,433
21,175
21,175
—
—
(6,683)
—
—
—
—
7,881
17,108
17,108
—
—
(13,220)
—
—
11,769
21,175
434
351
(6,683)
208
6,536
(356)
—
481,098
17,108
17,108
(166)
435
(13,220)
199
(150)
485,304
General
reserve
$'000
3,979
—
—
—
—
—
—
—
—
(3,979)
—
—
—
—
—
—
—
—
—
1
FY23, FY22, FY21 and FY20 Long Term Variable Remuneration (LTVR). In FY23, the true-up of FY20 LTVR reserve was recognised due to the non-market performance
conditions not being met.
2
FY22 and FY21 Deferred Short Term Variable Remuneration (STVR)
To be read in conjunction with the accompanying Notes.
ClearView Wealth Limited
81
Consolidated statement of changes in equity continued
For the year ended 30 June 2023
Company
Balance at 1 July 2021
Profit for the year
Total comprehensive income for the year
Transfer to profit reserve
Recognition of share based payments1
Transfer from accrued employee
entitlements2
Dividend paid
ESP loans settled through dividend
ESP shares vested and exercised
ESP shares vested/(forfeited)
Transfer from reserve to share capital
Balance at 30 June 2022
Profit for the year
Total comprehensive profit for the year
Transfer to profit reserve
Recognition of share based payments1
Transfer from accrued employee
entitlements2
Dividend paid
ESP loans settled through dividend
ESP shares vested/(forfeited)
Balance at 30 June 2023
Share
based
payments
reserve
$'000
12,210
—
Share
capital
$'000
449,855
—
—
—
—
—
—
—
9,648
5,580
3,979
469,062
—
—
—
—
—
—
—
188
469,250
—
—
434
351
—
208
(3,112)
(5,936)
—
4,155
—
—
—
(166)
435
—
199
(338)
4,285
Profit
Retained
reserve
losses
$'000
$'000
19,274 (111,647)
8,424
—
—
8,424
—
8,424
(8,424)
—
—
(6,683)
—
—
—
—
21,015
—
—
18,371
—
—
(13,220)
—
—
—
—
—
—
—
—
(111,647)
18,371
18,371
(18,371)
—
—
—
—
Attributable
to the
owners of
the parent
$'000
373,671
8,424
8,424
—
434
351
(6,683)
208
6,536
(356)
—
382,585
18,371
18,371
—
(166)
435
(13,220)
199
(150)
26,166
(111,647)
388,054
General
reserve
$'000
3,979
—
—
—
—
—
—
—
—
—
(3,979)
—
—
—
—
—
—
—
—
—
—
1
FY23, FY22, FY21 and FY20 Long Term Variable Remuneration (LTVR). In FY23, the true-up of FY20 LTVR reserve was recognised due to the non-market performance
conditions not being met
2
FY22 and FY21 Deferred Short Term Variable Remuneration (STVR)
To be read in conjunction with the accompanying Notes.
82
ClearView Annual Report 2023
Consolidated statement of cash flows
For the year ended 30 June 2023
Cash flows from operating activities
Receipts from client and debtors
Payments to suppliers and other creditors
Receipts from/(payments to) Group entities
Dividends and trust distributions received
Incurred claims treaty settlements
Interest received
Interest on borrowings and other costs of finance
Income taxes refund received/(paid)
Net cash generated/(utilised) by continuing
operating activities
Net cash generated/(utilised) by operating
activities - discontinued operations
Net cash generated/(utilised) by operating
activities
Cash flows from investing activities
Proceeds from the sale of subsidiaries net of
transaction costs
Payment for investment securities in subsidiary
and associates
Payments for investment securities
Dividend received from associate
Acquisition of property, plant and equipment
Acquisition of capitalised software
Fixed interest deposits (invested)/redeemed
Loans repayments received
Net cash (utilised)/generated by investing
activities - continuing operations
Net cash generated/(utilised) by investing
activities - discontinued operations
Net cash generated/(utilised) by investing
activities
2023
$'000
Consolidated
2022
$'000
Restated1
289,590
273,246
(258,286)
(241,512)
—
—
4,730
12,514
(10,130)
1,314
—
—
42,261
1,459
(3,791)
(261)
2023
$'000
—
(811)
17,343
—
—
346
(1,088)
1,314
Company
2022
$'000
—
(3,013)
2,320
7,000
—
162
(663)
(741)
39,732
71,402
17,104
5,065
22,107
258,360
—
—
61,839
329,762
17,104
5,065
—
—
—
960
(523)
(12,690)
(20,000)
50
—
—
(90,306)
240
(19)
(12,561)
67,469
104
—
2,030
(554)
(2,700)
—
960
—
—
—
—
240
—
—
—
2,913
5,635
(32,203)
(35,073)
3,319
5,205
140,301
(136,425)
—
—
108,098
(171,498)
3,319
5,205
ClearView Wealth Limited
83
Consolidated statement of cash flows continued
For the year ended 30 June 2023
Cash flows from financing activities
Repayment of lease liability
Repayment of ESP loans
Dividend paid
Interest on subordinated debt
Strategic review costs
Net cash (utilised)/generated in financing
activities - continuing operations
Net cash (utilised)/generated in financing
activities - discontinued operations
Net cash (utilised)/generated in financing
activities
Net (decrease)/increase in cash and cash
equivalents
Cash and cash equivalents at the beginning of the
financial year
Cash and cash equivalents at the end of the
financial year
Reclassification to assets held for sale (see Note
8.5(d))
Cash and cash equivalents attributable to
continuing operations at the end of the financial
year
2023
$'000
Consolidated
2022
$'000
Restated1
2023
$'000
Company
2022
$'000
(2,562)
199
(13,221)
(6,274)
(567)
(2,848)
6,744
(6,685)
(4,532)
(1,332)
—
199
(13,221)
(6,274)
(567)
—
6,744
(6,685)
(4,532)
(1,332)
(22,425)
(8,653)
(19,863)
(5,805)
(159,394)
(119,372)
—
—
(181,819)
(128,025)
(19,863)
(5,805)
(11,882)
30,239
560
4,465
150,735
120,496
13,369
8,904
138,853
150,735
13,929
13,369
(44,331)
—
—
—
94,522
150,735
13,929
13,369
1
The comparative consolidated statement of cash flows has been re-presented to show the Wealth Management business, together with the Financial Advice business,
as discontinued operations separately from continuing operations.
To be read in conjunction with the accompanying Notes.
84
ClearView Annual Report 2023
Notes to the Financial
Statements
For the year ended 30 June 2023
1. About this report
policies
88 g) Significant accounting
86 a) General information
86 b) Statement of compliance 89 h) Critical judgements and
86 c) Basis of preparation
86 d) Basis of consolidation 93 j) Coronavirus (COVID-19)
87 e) Business combinations
88 f) Materiality
89 i) Risk management
estimates
impact
ClearView Wealth Limited
85
1. About this report
a) General information
ClearView Wealth Limited (the Company or Consolidated
Entity or Parent Entity) is a limited company incorporated
in Australia. The address of its registered office is disclosed
in the Directory at the back of the Annual Report. The
principal activities of the Company and its subsidiaries (the
Group) are described in Note 2.1.
b) Statement of compliance
fair value of an asset or a liability, the Group takes into
account the characteristics of the asset or liability if market
participants would take those characteristics into account
when pricing the asset or liability at the measurement date.
Fair value for measurement and/or disclosure purposes in
these consolidated financial statements is determined on
such a basis, except for share-based payment transactions
that are within the scope of AASB 2 Share-based Payment,
leasing transactions that are within the scope of AASB
16 Leases, and measurements that have some similarities
These financial statements are general purpose financial
to fair value but are not fair value, such as value in use in
statements which have been prepared in accordance with
AASB 136 Impairment of Assets.
the Corporations Act 2001, Accounting Standards and
In addition, for financial reporting purposes, fair value
Interpretations, and comply with other requirements of the
measurements are categorised into Level 1, 2 or 3 based
law.
The financial statements comprise the consolidated
financial statements of the Group and the separate
on the degree to which the inputs to the fair value
measurements are observable and the significance of the
inputs to the fair value measurement in its entirety, which
financial statements of the parent entity. For the purpose
are described as follows:
of preparing the consolidated financial statements, the
Company is a for-profit entity. Accounting Standards
comprise Australian Accounting Standards. Compliance
with Australian Accounting Standards ensures that the
financial statements and notes of the Company and the
Group comply with International Financial Reporting
Standards (‘IFRS’).
• Level 1 inputs are quoted prices (unadjusted) in active
markets for identical assets or liabilities that the entity
can access at the measurement date;
• Level 2 inputs are inputs, other than quoted prices
included within Level 1, that are observable for the asset
or liability, either directly or indirectly; and
• Level 3 inputs are unobservable inputs for the asset or
The Company has adopted ASIC Corporations (Parent
liability.
Entity Financial Statements) Instrument 2021/195,
permitting entities to continue to include parent entity
financial statements in their financial reports. Entities
The Company is a company of the kind referred to in
ASIC Corporations (Rounding in Financial/Directors’
Reports) Instrument 2016/191, dated 24 March 2016, and
taking advantage of the relief are not required to present
in accordance with that Corporations Instrument, amounts
the summary parent entity information otherwise required
in the financial report are rounded off to the nearest
by regulation 2M.3.01 of the Corporations Regulations
thousand dollars, unless otherwise indicated.
2001.
All amounts are presented in Australian dollars, unless
The financial statements were authorised for issue by the
otherwise noted.
Directors on 22 August 2023.
c) Basis of preparation
Certain items have been reclassified from the prior
year’s financial report to conform to the current year’s
presentation basis.
The consolidated financial statements have been prepared
on the basis of historical cost, except financial instruments
d) Basis of consolidation
that are measured at revalued amounts or fair values
at the end of each reporting period, as explained in the
accounting policies below. Historical cost is generally
based on the fair values of the consideration given in
exchange for goods and services. Fair value is the price
that would be received to sell an asset or paid to transfer
a liability in an orderly transaction between market
participants at the measurement date, regardless of
The consolidated financial statements incorporate
the financial statements of the Company and entities
controlled by the Company and its subsidiaries. Control is
achieved when the Company:
• has power over the investee;
•
is exposed, or has rights, to variable returns from its
involvement with the investee; and
whether that price is directly observable or estimated
• has the ability to use its power to affect its returns.
using another valuation technique. In estimating the
86
ClearView Annual Report 2023
Notes to the Financial Statements 1. About this report continued
The Company reassesses whether or not it controls an
investee if facts and circumstances indicate that there are
changes to one or more of the three elements of control
listed above.
When the Company has less than a majority of the voting
rights of an investee, it has power over the investee when
the voting rights are sufficient to give it the practical
ability to direct the relevant activities of the investee
unilaterally. The Company considers all relevant facts and
circumstances in assessing whether or not the Company’s
voting rights in an investee are sufficient to give it power,
including:
• the size of the Company’s holding of voting rights
relative to the size and dispersion of holdings of the
other vote holders;
• potential voting rights held by the Company, other vote
holders or other parties;
• rights arising from other contractual arrangements; and
• any additional facts and circumstances that indicate that
the Company has, or does not have, the current ability
to direct the relevant activities at the time that decisions
need to be made, including voting patterns at previous
shareholders’ meetings.
Consolidation of a subsidiary begins when the Company
obtains control over the subsidiary and ceases when the
Company loses control of the subsidiary. Specifically,
income and expenses of a subsidiary acquired or disposed
of during the year are included in the consolidated
statement of profit or loss and other comprehensive
income from the date the Company gains control until the
date when the Company ceases to control the subsidiary.
Changes in the Group’s ownership interests in
existing subsidiaries
Changes in the Group’s ownership interests in subsidiaries
that do not result in the Group losing control over the
subsidiaries are accounted for as equity transactions.
The carrying amounts of the Group’s interests and the
non-controlling interests are adjusted to reflect the
changes in their relative interests in the subsidiaries.
Any difference between the amount by which the non-
controlling interests are adjusted and the fair value of the
consideration paid or received is recognised directly in
equity and attributed to owners of the Company.
When the Group loses control of a subsidiary, a gain or
loss is recognised in profit or loss and is calculated as
the difference between (i) the aggregate of the fair value
of the consideration received and the fair value of any
retained interest and (ii) the previous carrying amount
of the assets (including goodwill), and liabilities of the
subsidiary and any non-controlling interests. All amounts
previously recognised in other comprehensive income
in relation to that subsidiary are accounted for as if the
Group had directly disposed of the related assets or
liabilities of the subsidiary (that is, reclassified to profit
or loss or transferred to another category of equity as
specified/permitted by applicable Australian Accounting
Standards Board standards (AASBs)). The fair value of any
investment retained in the former subsidiary at the date
when control is lost is regarded as the fair value on initial
recognition for subsequent accounting under AASB 9
Financial Instruments, when applicable, the cost on initial
recognition of an investment in an associate or a joint
Profit or loss and each component of other comprehensive
venture.
income are attributed to the owners of the Company and
to any non-controlling interests. Total comprehensive
income of subsidiaries is attributed to the owners of the
Company and to any non-controlling interests even if this
results in the non- controlling interests having a deficit
balance.
When necessary, adjustments are made to the financial
statements of subsidiaries to bring their accounting
policies into line with the Group’s accounting policies.
e) Business combinations
Acquisitions of businesses are accounted for using the
acquisition method. The consideration transferred in a
business combination is measured at fair value which is
calculated as the sum of the acquisition-date fair values of
assets transferred by the Group, liabilities incurred by the
Group to the former owners of the acquiree and the equity
instruments issued by the Group in exchange for control
All intragroup assets and liabilities, equity, income,
of the acquiree. Acquisition-related costs are recognised in
expenses and cash flows relating to transactions
profit or loss as incurred.
between members of the Group are eliminated in full on
consolidation.
At the acquisition date, the identifiable assets acquired
and the liabilities assumed are recognised at their fair value
at the acquisition date, except that:
ClearView Wealth Limited
87
Notes to the Financial Statements 1. About this report continued
• deferred tax assets or liabilities and liabilities or
are adjustments that arise from additional information
assets related to employee benefit arrangements are
recognised and measured in accordance with AASB
112 Income Taxes and AASB 119 Employee Benefits
respectively;
•
liabilities or equity instruments related to share-based
payment arrangements of the acquiree or share-based
payment arrangements of the Group entered into to
replace share-based payment arrangements of the
acquiree are measured in accordance with AASB 2 at
the acquisition date; and
• assets (or disposal groups) that are classified as held for
sale in accordance with AASB 5 Non-current assets Held
for Sale and Discontinued Operations are measured in
accordance with that Standard.
Goodwill is measured as the excess of the sum of the
consideration transferred, the amount of any non-
controlling interests in the acquiree, and the fair value
of the acquirer’s previously held equity interest in the
acquiree (if any) over the net of the acquisition-date
amounts of the identifiable assets acquired and the
liabilities assumed. If, after reassessment, the net of
the acquisition-date amounts of the identifiable assets
acquired and liabilities assumed exceeds the sum of
the consideration transferred, the amount of any non-
controlling interests in the acquiree and the fair value of
the acquirer’s previously held interest in the acquiree (if
any), the excess is recognised immediately in profit or loss
as a bargain purchase gain.
Non-controlling interests that are present ownership
obtained during the ‘measurement period’ (which cannot
exceed one year from the acquisition date) about facts
and circumstances that existed at the acquisition date.
The subsequent accounting for changes in the fair
value of contingent consideration that do not qualify
as measurement period adjustments depends on how
the contingent consideration is classified. Contingent
consideration that is classified as equity is not remeasured
at subsequent reporting dates and its subsequent
settlement is accounted for within equity. Contingent
consideration that is classified as an asset or liability is
remeasured at subsequent reporting dates in accordance
with AASB 9, or AASB 137 Provisions, Contingent
Liabilities and Contingent Assets, as appropriate, with the
corresponding gain or loss being recognised in profit or
loss.
If the initial accounting for a business combination is
incomplete by the end of the reporting period in which
the combination occurs, the Group reports provisional
amounts for the items for which the accounting is
incomplete. Those provisional amounts are adjusted
during the measurement period (see above), or additional
assets or liabilities are recognised, to reflect new
information obtained about facts and circumstances that
existed as at the acquisition date that, if known, would
have affected the amounts recognised as at that date.
f) Materiality
interests and entitle their holders to a proportionate
Information has only been included in the financial report
share of the entity’s net assets in the event of liquidation
to the extent that it has been considered material and
may be initially measured either at fair value or at the
relevant to the understanding of the financial statements.
non-controlling interests’ proportionate share of the
A disclosure is considered material and relevant if, for
recognised amounts of the acquiree’s identifiable net
example:
assets. The choice of measurement basis is made on a
• the amount in question is significant because of its size
transaction-by-transaction basis. Other types of non-
or nature;
controlling interests are measured at fair value or, when
applicable, on the basis specified in another Standard.
Where the consideration transferred by the Group in a
business combination includes assets or liabilities resulting
from a contingent consideration arrangement, the
contingent consideration is measured at its acquisition-
date fair value.
Changes in the fair value of the contingent consideration
that qualify as measurement period adjustments are
adjusted retrospectively, with corresponding adjustments
against goodwill. Measurement period adjustments
•
•
•
it is important for understanding the results of the
ClearView group;
it helps explain the impact of significant changes in the
ClearView group; and/or
it relates to an aspect of the ClearView group’s
operations that is important to its future performance.
g) Significant accounting policies
The significant accounting policies adopted in the
preparation of the financial report are contained in the
notes to the financial statements to which they relate. All
88
ClearView Annual Report 2023
Notes to the Financial Statements 1. About this report continued
accounting policies have been consistently applied to the
current and reflect changes in the businesses operating
current year and comparative period, unless otherwise
environment and regulatory and community expectations.
stated.
h) Critical judgements and
estimates
In the application of the Group’s accounting policies, the
Directors are required to make judgements, estimates
and assumptions about carrying values of assets and
liabilities that are not readily apparent from other sources.
The estimates and associated assumptions are based on
historical experience and various other factors that are
believed to be reasonable under the circumstances, the
results of which form the basis of making the judgements.
The Group’s Board has overall responsibility for the
establishment and oversight of the risk management
strategy and framework. The Board Risk and Compliance
Committee (BRCC) supports the Board by overseeing
how risk is managed in accordance with the Group’s
risk management policies and procedures. The BRCC
also reviews the adequacy of the RMF and RMS.
The Committee reports regularly to the Board of
directors on its activities. At a management level, risk is
governed through a delegation structure, in addition to
management forums that are specifically structured to
discuss risk related matters.
Actual results may differ from these estimates.
Management information is produced that allows financial
The estimates and underlying assumptions are reviewed
on an ongoing basis. Revisions to accounting estimates
are recognised in the period in which the estimate is
revised if the revision affects only that period or in the
period of the revision and future periods if the revision
affects both current and future periods.
The critical judgements that the Directors have made in
the process of applying the Group’s accounting policies
and in the application of Australian Accounting Standards
that have a significant effect on the financial report and
estimates include:
• Life insurance policy liabilities, including the actuarial
methods and assumptions and allocation of expenses
between acquisition and maintenance costs (section
5.7);
• Assets arising from reinsurance contracts (section 5.7);
• Recoverability of intangible assets and goodwill (section
4.2);
• Deferred tax assets (section 2.7)
i) Risk management
The Group is exposed to financial and non financial risks
arising from its operations. These risks are managed
through the Risk Management Framework (RMF) and Risk
Management Strategy (RMS) that is in place and which
complies with the requirements of CPS/SPS220. These are
subject to review to ensure that they continue to remain
and non financial risk to be monitored. At a Board level,
risk reporting is provided to the BRCC in addition to
certain specific matters that are also reported to the
Board. Reporting on the effectiveness of the internal
control environment is reported to the Board Audit
Committee (BAC).
The Group operates according to a three lines of risk
responsibility model that seeks to clarify roles and
accountabilities for managing risk across material risk
types.
The Risk Appetite Statement (RAS) considers and outlines
ClearView’s material risks from a customer, capital,
earnings, growth, employee, business partner, governance,
technology, community and environment perspective.
ClearView’s RAS clearly articulates the material risks and
associated sub-categories to which ClearView is exposed
and specifies the type and level of risk ClearView is willing
to accept in pursuit of its strategic, business and financial
objectives.
The material financial and non-financial risk categories for
ClearView include:
• Financial
• Strategic
•
Insurance
• Conduct
• Operational
• Legal and Regulatory (Compliance)
ClearView Wealth Limited
89
Notes to the Financial Statements
1. About this report continued
Some of the key material risk categories includes sub-categories are discussed in more detail below.
Insurance management
The risks under the life insurance contracts written by ClearView Life are exposed to various key variables. The table
below provides an overview of the key insurance contract types and exposure variables.
Type of contract
Non-participating life
insurance contracts with
fixed terms (Term Life and
Disability)
Detail of contract workings
Benefits paid on death or
ill health that are fixed and
not at the discretion of the
issuer
Nature of compensation for
claims
Benefits defined by
the insurance contract
are determined by the
contract obligation of
the issuer and are not
directly affected by
the performance of the
underlying assets or
the performance of the
contracts as a whole
Key variables that affect
the timing and uncertainty
Mortality
Morbidity
Discontinuance rates
Expenses
Policy Terms
Premium Rates
Insurance risks are controlled through the use of underwriting procedures, appropriate premium rating methods and
approaches, appropriate reinsurance arrangements, effective claims management procedures and sound and sustainable
product terms and conditions.
a) Risk management objectives and policies for mitigating insurance risk
ClearView Life issues term life insurance contracts and disability insurance contracts. The performance of ClearView Life
and its continuing ability to write business depends on its ability to manage insurance risk.
b) Methods to limit, manage or transfer insurance risk exposures
Reinsurance
ClearView Life purchases reinsurance to limit its exposure to accepted insurance risk. ClearView Life cedes to specialist
reinsurance companies a proportion of its portfolio for certain types of insurance risk. This serves primarily to reduce
the net liability on large individual risks and provide protection against large losses (claims volatility and systemic risks
in the short term). The reinsurers used are regulated by the Australian Prudential Regulation Authority (APRA) and are
members of large international groups with sound credit ratings.
ClearView Life periodically reviews its reinsurance arrangements and retention levels.
Underwriting procedures
Underwriting decisions are made using the underwriting procedures reflected in ClearView Life’s underwriting systems
and detailed in ClearView Life’s underwriting manual. Such procedures include limits as to delegated authorities and
signing powers. The underwriting process is subject to ClearView Life’s internal control processes and is subject to review
by the reinsurers from time to time.
Claims management
Strict claims management procedures help ensure the timely and correct payment of claims in accordance with policy
conditions, as well as limiting exposure to inappropriate and fraudulent claims.
c) Concentration of insurance risk
The insurance business of ClearView Life is written on individual lives (not group business). Individual business is not
expected to provide significant exposure to risk concentration. Nonetheless, insurance risk is concentrated to the eastern
seaboard of Australia and its capital cities. The concentrated risk exposure is reduced through the use of reinsurance as
covered above.
90
ClearView Annual Report 2023
Notes to the Financial Statements 1. About this report continued
d) Pricing risk and terms and conditions of insurance
contracts
The key risk controls in respect of pricing and policy terms
and conditions include:
• Review of product pricing by the Appointed Actuary of
ClearView Life, including annual analysis of experience
and product line profitability as documented in the
annual ClearView Life Financial Condition Report;
• Formal Appointed Actuary Board advice on new
product pricing, new reinsurance arrangements and
changes in pricing, terms and conditions and reinsurance
arrangements. A separate product and pricing team
reports into the Group Executive, Product and Pricing;
• Review by the Life Control Cycle Forum of experience
investigations and changes to product, pricing,
underwriting process, claims process and distribution
process;
• Approval of updates to product documentation and
oversight of the development of new products by
the Product Development Oversight Committee as
well as ongoing monitoring, review and continuous
development of existing products and distribution
arrangements to ensure that products are distributed
within their target market;
• Offer of corresponding reinsurance terms by reinsurers
which provides an implicit check on the pricing;
• Formal internal policy document and Product Disclosure
Statement due diligence review and sign-off processes;
and
• The ability to re-price products (change premium rates
and fees) on most products in the event of adverse
claims and/or other product experience.
It is noted that similar processes and controls apply to
the pricing and terms and conditions applicable to the
investment products issued by ClearView Life.
Liquidity and credit risks
The risk of financial loss to the Group if a counterparty
to a financial instrument fails to meet its contractual
obligations, and arises principally from the Group
exposures from its key debtors and investments in debt
securities.
The key risk controls include:
• A lump sum incurred claims treaty with the main
reinsurer is in place where lump sum claims are settled
on a comprehensive earned premium and incurred
claims basis (including incurred but not reported
claims (IBNR) and reported but not admitted claims
(RBNA) based on best estimate assumptions consistent
and based on the applicable Australian Accounting
Standards (excluding risk margins, profit margins, and
capital margins);
• An incurred claims treaty with the main reinsurer
for income protection (IP) claims to address the
concentration risk. Under the treaty, ClearView
LifeSolutions and ClearChoice income protection claims
are substantially settled on an earned premium and
incurred claims basis. Each quarter, the main reinsurer
settles a substantial component of the outstanding
income protection claims liabilities, the incurred but not
reported claims (IBNR) and reported but not admitted
claims (RBNA) based on the reinsurer’s best estimate
assumptions and based on the applicable Australian
Accounting Standards (excluding risk margins, profit
margins and capital margins).
• The main reinsurer retains the duration and matching
risk on the IP incurred claims treaty. For both incurred
claims treaties, ClearView pays an interest charge on
the liabilities related to the settlement of the incurred
liabilities. This cost (reported as part of the finance
costs) has been included in the FY23 result.
• An irrevocable letter of credit issued by a major
Australian bank on behalf of the main reinsurer.
• Assessment of credit risk exposures arising from
investment activities by the ClearView Investment
Committee (CIC) prior to investing ClearView assets
into any significant financial asset. The ongoing credit
standing of material investments are monitored by the
CIC.
• Specific capital reserves are held against credit risk
under the regulatory capital requirements of the Group
and its subsidiaries including ClearView Life and credit
risk is considered within the Group’s and individual
company’s Internal Capital Adequacy Assessment
Process (ICAAP) (refer to below for further discussion).
• The Group’s approach to managing liquidity is to ensure,
as far as possible, that it will have sufficient liquidity to
meet its liabilities when they are due, under both normal
and stressed conditions, without incurring unacceptable
losses or risking damage to the Group’s reputation. To
this end, the Group aims to maintain a high level of cash
and cash equivalents and other highly marketable debt
investments which are monitored by the CIC.
• The Group also monitors the level of expected cash
inflows on trade and other receivables together with
expected cash outflows on trade and other payables.
ClearView Wealth Limited
91
Notes to the Financial Statements 1. About this report continued
• The Group has a Debt Funding Facility that contains
certain loan covenants. Under the agreement, the
covenants are monitored on a regular basis and reported
to ensure compliance with the facility agreement.
off-balance sheet client funds, via the impact on the
fees charged by the Group which vary with the level of
Policyholder and client funds under management and
under administration, as well as related reputational
Capital management and reserving
exposure (for further detail on Asset risks refer to note 3).
b) Asset-Liability mismatch risk
In terms of regulatory requirements:
Asset-liability mismatch risk arises to the extent to
• ClearView Life is subject to regulatory capital
which the assets held by the Group to back its liabilities
requirements, in accordance with APRA Life Insurance
Prudential Standards, in respect of the principal financial
risk exposures retained by ClearView Life;
(especially its policy liabilities and guaranteed investment
account liabilities) do not closely match the nature and
term of those liabilities. In practice, the market risk and
• ClearView Financial Management is also required by
ASIC to maintain minimum regulatory capital; and
credit risk exposures of the Group primarily relate to the
extent that the Group retains a net exposure with respect
• ClearView Life Nominees is required to maintain an
Operational Risk Financial Requirement (ORFR)
as determined in accordance with Superannuation
Prudential Standard 114. SPS 114 requires that the trustee
maintains adequate financial resources to address losses
arising from the operational risks that may affect the
ClearView Retirement Plan.
In addition, the Group holds additional capital reserves
over regulatory capital in accordance with its Board
adopted ICAAP. This is to ensure that there is a low
likelihood that the Group (and its regulated subsidiaries)
to these risks and the extent to which the variation in asset
values do not mirror the variation in liability values. In this
context it is noted:
• The investment linked liabilities of ClearView Life
directly link the underlying assets held to support those
liabilities, with the primary market risks and credit risks
passed on to the policyholder and unit trust investors (as
discussed above);
• The assets held to support the capital guaranteed
units in the ClearView Life No.4 statutory funds are
maintained, in accordance with the Board’s Investment
will breach their regulatory requirements and so that
Policy and Guidelines, in high quality, short dated
the Group has sufficient capital to manage its near term
fixed interest assets and cash. Asset-liability risk is
business plans and provide a buffer (capital and time) to
substantially reduced via this means; and
take action to deal with reasonably foreseeable adverse
events that may impact the businesses. These additional
reserves are partly held within the subsidiaries where the
key risks reside, and partly in a central reserve within the
parent entity.
Investment management and market risk
(Interest rate, asset liability management)
a) Asset risks
The primary asset risks borne by the Group relate to
the financial assets of the Company and its operating
subsidiaries excluding those in the non-guaranteed
investment linked funds in ClearView Life’s statutory
fund No.4 (referred to below as ClearView assets). The
primary financial risks related to the financial assets in
the non-guaranteed investment linked funds in ClearView
• Similarly, assets held to support the policy liabilities
and risk capital of the ClearView Life No.1 statutory
fund are maintained, in accordance with the Board’s
investment Policy and Guidelines, in high quality, fixed
interest assets and cash that generally closely match
the duration and inflation characteristics of those policy
liabilities and capital reserves. See further details on the
investments made to match the claims reserves, capital
reserves and excess assets elsewhere in the report.
Outsourcing and supplier management
ClearView seeks to manage the risks arising from the use
of a third party through initial and ongoing due diligence
and oversight throughout the supplier life cycle.
Business continuity and disaster recovery
Life’s statutory fund No.4 are borne by policyholders as
ClearView is exposed to the risk of disruption to its
the investment performance on those assets is passed
business operations and IT systems from a host of
through, in full, to the policyholders (referred to below
disasters that vary in degree from minor to catastrophic.
as Policyholder assets). Nonetheless, the Group has
Business continuity is the process of restoring the business
a secondary exposure to the Policyholder assets and
back to functionality after a crisis. Disaster recovery
92
ClearView Annual Report 2023
Notes to the Financial Statements 1. About this report continued
differs in that it is the process of getting all-important IT
• regular reporting and monitoring of risk culture
infrastructure and operations up and running following an
outage.
ClearView adopts a holistic approach in managing
Business Continuity Management (BCM), which includes
policies, plans and procedures for ensuring critical business
indicators to enable an understanding of where issues
may exist and provide an opportunity to address them
in a timely manner.
j) Coronavirus (COVID-19) impact
functions including IT infrastructure can be maintained or
The Group has considered the impact of COVID-19 in
recovered in a timely fashion in the event of a disruption.
preparing its financial statements.
Its purpose is to minimise the financial, legal, regulatory,
reputational and other material consequences arising from
a disruption caused by an internal or external event.
No allowance has been made in the lapse assumptions
for COVID-19 (albeit allowances have been made linked to
the repricing of the portfolios and potential affordability
As part of ClearView’s BCM approach, the Crisis
impacts).
ClearView has also considered the impact of COVID-19 on
its claims assumptions.
As at 30 June 2023, a total provision of $0.6 million
(post-tax, net of reinsurance) (30 June 2022: $0.7 million)
has been raised at Balance date to cover potential Long
COVID-19 related impacts. These provisions will continue
to be monitored and re-assessed at each reporting period.
Management Team (CMT) will consider the threat level
that is most appropriate to ClearView’s operations and will
develop a response using the current Business Continuity
Plan (BCP) and Information Technology Disaster Recovery
Plan (ITDRP), taking into account all information available
at the time.
Compliance and obligation management
ClearView outlines its approach and minimum
expectations to meet its legal and compliance obligations
in the RMF. The RMF captures processes and activities
that ensures controls are in place to meet the associated
obligations as well as the attestations and quality
assurance testing processes adopted in regard to
compliance assurance.
Culture and conduct
A sound risk culture is integral to the Group’s RMF and
RMS. The Group’s approach to risk culture includes:
• the establishment of a common purpose with clear
objectives and expectations based on ClearView’s Code
of Conduct;
• a Risk Culture Framework (RCF) that enables a
consistent understanding of a sound risk culture via a
series of key attributes;
• governance and conduct frameworks are in place
to foster an ethical and sound culture through
communications, continuous education and online
training, a remuneration and consequence framework
designed to promote accountability, encourage and
reward appropriate behaviours; and
ClearView Wealth Limited
93
Notes to the Financial Statements 2. Results for the year
This section provides information about the Group’s financial
performance in the period, including:
95 2.1 Segment performance
99 2.2 Earnings per share
100 2.3 Dividends
100 2.4 Fee and other revenue
101 2.5 Investment income
102 2.6 Operating expenses
103 2.7 Taxes
94
ClearView Annual Report 2023
Notes to the Financial Statements 2. Results for the year
2.1 Segment performance
AASB 8 Operating Segments requires operating segments
to be identified on the basis of internal reports about
components of the Group that are regularly reviewed by
the chief operating decision maker in order to allocate
resources to the segment and to assess its performance.
The information reported to the Group’s Board of
Directors, being the chief operating decision maker, for
the purpose of resource allocation and assessment of
performance is focused on the products and services of
each reporting segment.
ClearView had combined in-force life insurance premiums
of $339.3 million (2022: $311.4 million). The Life Insurance
business accounted for circa 99.8% (2022: 99.8%) of
ClearView’s total revenue (excluding the discontinued
operations) during the year.
ClearView provides life insurance protection products
through its wholly owned subsidiary ClearView Life. These
products are designed to allow policyholders to receive
(in the case of an eligible claim) either a one off payment
(lump sum products) or recurring benefits (ongoing
monthly payments) over a specified period, typically a
certain number of years, or up to a specific age (income
ClearView offers life insurance, superannuation and
protection products).
investment products and services under the ClearView
brand through two business segments, namely Life
Insurance and Wealth Management.
ClearView historically provided financial advice services
through its ClearView Financial Advice, Matrix and
LaVista Licensee Solutions businesses. On 25 August
2021, ClearView announced the sale of these businesses
to Centrepoint Alliance Limited (Centrepoint Alliance), in
exchange for $3.2 million in cash (subject to a net asset
adjustment) and the acquisition of a strategic 24.5% stake
in Centrepoint Alliance. The acquisition of a strategic stake
in Centrepoint Alliance allowed ClearView to participate
in the financial advice industry consolidation but at the
same time separate the product manufacturer and advice
arms of its business. The transaction was completed on 1
November 2021.
ClearView’s holding in Centrepoint Alliance is accounted
for under the equity accounting method and is reported
as part of the Listed/Other segment. This segment also
represents the investment earnings on the cash and
investments held in the listed and central services entities
and in the shareholders fund of ClearView Life, less the
costs associated with maintaining a listed entity and
interest expense on corporate and subordinated debt.
The Group manages capital at the listed entity level in
accordance with its ICAAP policy.
Further details on the the principal activities of the
Group’s two business reportable segments under AASB 8,
are provided in more detail below.
a) Life Insurance (‘protection’ products)
The Life Insurance business offers advised life insurance
products and also has an inforce (closed) portfolio of
non-advised life insurance products. As at 30 June 2023,
The products provided by ClearView Life include:
• LifeSolutions was launched in December 2011 and
includes term life, permanent disability, trauma and
critical illness benefits, child cover, accident covers,
income protection and business expense covers. Policies
can be issued directly or via the HUB24 Super Fund
(from 1 November 2020) and ClearView Retirement
Plan (to 31 October 2020) as superannuation. The
LifeSolutions product, was until 1 October 2021, the
single, contemporary product series for retail customers
that was available for sale through financial advisers.
It has subsequently been closed to new business from
that date.
• ClearView ClearChoice, the new life protection product
series, was launched in October 2021 and includes term
life, accidental death, permanent disability, trauma, child
cover, income protection and business expense cover.
These products include significant changes to income
protection product design and pricing to improve both
premium affordability and sustainability of the product.
Policies can be issued directly or via the HUB24 Super
Fund.
• An in-force portfolio of Non-Advice life protection
products that were previously sold through direct
marketing, and related channels. Products include term
life, accidental death, injury covers, trauma and critical
illness and funeral insurance. These products are no
longer marketed to customers. The direct life insurance
business was closed in May 2017.
b) Wealth Management (‘investment’ products) -
discontinued operations
The Wealth Management business offers products
through various structures (see commentary below) and
as at 30 June 2023, had total FUM of $3.4 billion (30 June
2022: $3.3 billion).
ClearView Wealth Limited
95
Notes to the Financial Statements 2. Results for the year continued
ClearView provides wealth management products via four
primary avenues:
and include MIS products available on ClearView’s
WealthSolutions platform and other external platforms.
• Traditional products (Master Trust) - Life investment
contracts issued by ClearView Life. Products have
historically included ordinary savings, superannuation
and allocated pension products, with the latter
two provided via the ClearView Retirement Plan.
The Traditional product was not marketed to new
customers. In May 2022, ClearView transferred clients
from the Traditional (Master Trust) superannuation and
allocated pension product, to the more contemporary
WealthFoundations product, effectively simplifying the
product suite and enabling clients to reengage with a
contemporary product. The remaining FUM balances at
30 June 2023 therefore only relates to ordinary savings
products;
• WealthSolutions - A superannuation and retirement
income wrap (issued via the ClearView Retirement
Plan) and an Investor Directed Portfolio Service
(IDPS) Wrap (provided by CFML). This is offered via
the WealthSolutions platform which was launched in
December 2011. HUB24 is the wrap platform provider
(from 2H FY21). WealthSolutions wrap product offering
includes a broad menu of investment funds, ASX listed
shares, term deposits, ClearView managed funds
and Separately Managed Account (SMA) offering. It
also provides a number of model portfolios managed
by ClearView Financial Management Limited for
superannuation and non superannuation investors;
• WealthSolutions 2 - The WealthSolutions 2 product on
the HUB 24 platform is effectively a private labelled
product with limited administration fee margins. The use
of the ClearView model portfolios and platform funds
on the HUB24 platform is therefore the key driver to
generate margin from this product.
• WealthFoundations is a mid market wealth
management product suite issued through the
ClearView Retirement Plan. Products include
superannuation and allocated pension products.
WealthFoundations includes a menu of investment
options with transparent investment in underlying funds.
The product is administered in house on the Acurity
platform; and
• Managed Investment Schemes (MIS) - Products are
issued via ClearView Financial Management Limited
(CFML) as the ASIC licensed Responsible Entity
As previously announced to the market, the Board
initiated a strategic review in the wealth management
segment to seek out and pursue opportunities to reset
and simplify the business with the ambition of retaining
its core focus on being a life risk insurance provider.
The Board is committed to the exit of the wealth
management business given its lack of scale and limited
growth options.
ClearView entered into a share sale agreement (on
22 February 2023) for the sale of CFML to Human
Financial, subject to the completion of certain conditions
precedent.
The superannuation fund trustee, ClearView Life
Nominees Pty Limited is, at the same time, considering
a number of options and the best way forward for the
superannuation fund, ClearView Retirement Plan. The
outcome of these considerations will inform the roadmap
and timing for the overall exit of the wealth management
business.
Post exit of the wealth management business, ClearView
will be a simplified and less complex business with
a focus on life insurance. However, given the trustee
considerations, the timing remains uncertain but is
expected to be within the FY24 financial year.
In accordance with AASB 5 Non-Current Assets Held
for Sale and Discontinued Operations, the wealth
management segment meets the criteria to be classified
as held for sale in the consolidated financial statements
for the year ended 30 June 2023. As such it is now
reported as a discontinued operation. Refer to section 8.5
for detail.
Asset segment information has not been disclosed
because the allocation of assets is not used for evaluating
segment performance and deciding the allocation of
resources to segments.
Asset segment information is critical to the performance
of each company and their respective regulatory
obligations and is managed at a company level.
Information regarding these segments is provided on the
following page.
96
ClearView Annual Report 2023
Notes to the Financial Statements 2. Results for the year continued
The accounting policies of the reportable segments are the same as the Company’s accounting policies.
Segment revenue (net of
reinsurance)
Life Insurance
Listed entity/Other
Consolidated segment revenue
from continuing operations
Total Revenue
2022
$'000
2023
$'000
Inter-Segment Revenue
2022
$'000
2023
$'000
Consolidated Revenue
2022
$'000
2023
$'000
217,201
354
190,016
286
217,555
190,302
—
—
—
—
—
—
217,201
354
190,016
286
217,555
190,302
ClearView Wealth Limited
97
Notes to the Financial Statements 2. Results for the year continued
Operating Earnings (after tax) and Underlying net profit after tax are the Group’s key measure of business performance
and are disclosed below by segment:
2023
Total operating earnings after tax
Equity account interest1
Underlying investment income
Interest on corporate debt
Underlying net profit/(loss) after tax
Policy liability discount rate effect2
Strategic review/restructure costs4
Wealth Management divestment5
Other costs6
Reported profit/(loss) per management
reported results
Reclassification (for statutory results)7
Reported profit/(loss) per statutory results
2022
Total operating earnings after tax
Equity account interest1
Underlying investment income
Interest on corporate debt
Underlying net profit/(loss) after tax
Policy liability discount rate effect2
Impairments3
Strategic review/restructure costs4
Financial Advice divestment
Other costs6
Reported profit/(loss) per management
reported results
Reclassification (for statutory results)7
Reported profit/(loss) per statutory results
Life
Insurance
$'000
35,229
—
7,028
(1,858)
40,399
(14,030)
—
—
(1,526)
24,843
422
25,265
28,950
—
1,609
(1,318)
29,241
(11,346)
—
—
—
(1,262)
16,633
141
16,774
Listed
Entity/
Other
$'000
(658)
666
588
(3,785)
(3,189)
—
(1,128)
—
—
(4,317)
—
(4,317)
(826)
534
201
(2,686)
(2,777)
—
—
(2,400)
(200)
—
(5,377)
—
(5,377)
Continuing
operations
- Total
$'000
34,571
666
7,616
(5,643)
Discontinued
operations8
$'000
(3,169)
—
458
—
37,210
(14,030)
(1,128)
—
(1,526)
20,526
422
20,948
28,124
534
1,810
(4,004)
26,464
(11,346)
—
(2,400)
(200)
(1,262)
11,256
141
11,397
(2,711)
—
—
(845)
138
(3,418)
(422)
(3,840)
(901)
—
91
—
(810)
—
(822)
—
11,736
(185)
9,919
(141)
9,778
Total
$'000
31,402
666
8,074
(5,643)
34,499
(14,030)
(1,128)
(845)
(1,388)
17,108
—
17,108
27,223
534
1,901
(4,004)
25,654
(11,346)
(822)
(2,400)
11,536
(1,447)
21,175
—
21,175
The key measures of business performance by segment are presented on a management reported basis. Management
reported results are non-IFRS financial information and are not directly comparable to the statutory results presented in
other parts of this financial report. ClearView’s statutory and management reported profit after tax are the same.
1
2
Share of net profit of investment in associate net of impairment (Centrepoint Alliance) for 12 months in FY23 and for 8 months (since November 2021) in FY22.
The policy liability discount rate effect is the result of changes in the long-term discount rates used to determine insurance policy liabilities and the incurred income
protection disabled lives claims reserves. The life insurance policy liability (based on AIFRS) and income protection incurred disabled lives claims reserves are
discounted using market discount rates that typically vary at each reporting date and create volatility in the policy liabilities and the disabled lives claims reserves, and
consequently, earnings. ClearView reports this volatility separately.
3
Impairment to right of use asset and provision for associated outgoings as a result of sale of financial advice businesses in FY22.
4 Costs associated with the restructure announced in June 2023 and the strategic review which has been concluded in November 2022.
5 Costs associated with the sale of the Wealth Management business.
6
7
8
These costs are considered unusual to the ordinary activities of the Group and are therefore not reflected as part of Underlying NPAT. Amounts stated are after tax.
The reclassification relates to income or expense items reported under the Wealth Management segment but not classified as discontinued operations.
The discontinued operation results include the contribution of the Financial Advice business until the date of the sale of this business to Centrepoint Alliance (1
November 2021), the gain on sale of the Financial Advice business and the contribution of the Wealth Management business.
98
ClearView Annual Report 2023
Notes to the Financial Statements 2. Results for the year continued
2.2 Earnings per share
Earnings per share - continuing operations (cents)
Basic earnings (cents)
Diluted earnings (cents)
Earnings per share (cents)
Basic earnings (cents)
Diluted earnings (cents)
Consolidated
2023
2022
Restated
3.27
3.27
2.67
2.67
1.80
1.79
3.34
3.32
Basic earnings per share
Basic earnings per share is calculated based on profit attributable to shareholders of ClearView Wealth Limited and
the weighted average number of ordinary shares outstanding. The earnings and weighted average number of ordinary
shares used in the calculation of basic earnings per share are as follows:
Profit for the year from continuing operations attributable to owners of the Company ($'000)
Earnings used in the calculation of basic earnings per share - continuing operations
($'000)
Profit for the year attributable to owners of the Company ($'000)
Earnings used in the calculation of basic earnings per share ($'000)
Weighted average number of ordinary shares for the purpose of basic earnings per share
('000's)
20,948
17,108
11,397
21,175
20,948
17,108
21,175
11,397
634,396
640,122
Diluted earnings per share
Diluted earnings per share is based on profit attributable to shareholders of ClearView Wealth Limited and the
weighted average number of ordinary shares outstanding after adjustments for the effects of all dilutive potential
ordinary shares, such as options and performance rights issued under the employee rights plan. The earnings used in
the calculation of diluted earnings per share are as follows:
Profit for the year from continuing operations attributable to owners of the Company ($'000)
Earnings used in the calculation of total diluted earnings per share - continuing operations
($'000)
Profit for the year attributable to owners of the Company ($'000)
Earnings used in the calculation of total diluted earnings per share ($'000)
The weighted average number of ordinary shares for the purposes of diluted earnings per share reconciles to the
weighted average number of ordinary shares used in the calculation of basic earnings per share as follows:
Weighted average number of ordinary shares used in the calculation of basic earnings per
share (000's)
Shares deemed to be dilutive in respect of the employee rights plan (000's)
Weighted average number of ordinary shares used in the calculation of diluted earnings
per share (all measures) (000's)
640,122
68
20,948
17,108
20,948
17,108
640,190
11,397
21,175
21,175
634,396
2,573
636,969
11,397
ClearView Wealth Limited
99
Notes to the Financial Statements 2. Results for the year continued
2.3 Dividends
Dividend payments on Ordinary shares
2022 final dividend (2022: 2021 final dividend) (cps)
Total dividends on ordinary shares paid to owners of the Company
Dividends not recognised in the consolidated statement of
financial position
Dividends declared since balance date
2023 final dividend (2022: 2022 final dividend) (cps)
Dividend franking account
Amount of franking credit available for subsequent reporting periods
based on a tax rate of 30% (2022: 30%)
Consolidated and Company
2022
2023
Per share
$'000 Per share
$'000
2.0
2.0
13,220
13,220
1.0
1.00
6,683
6,683
3.0
19,786
2.0
13,220
27,238
27,286
The Directors have declared a fully franked $19.8 million cash dividend for the year ended 30 June 2023 (2022: $13.2
million), equivalent to 3 cents per share (FY22: 2 cents per share). This represents an increase of 50% on the prior year.
The franking account balance is calculated from the balance of the franking account as at the end of the reporting period,
adjusted for franking credits and debits that will arise from the settlement of liabilities or receivables for income tax and
dividends (including dividends declared but not recognised in the financial statements) (FY23 dividend franking account
has been reduced by the franking credit related to dividend declared but not recognised in the financial statement).
The ability of the Company to continue to pay franked dividend is dependent upon the receipt of franked dividends from
its investment assets and the group itself paying tax.
2.4 Fee and other revenue
Funds management fees
Gain on sale of investments in subsidiaries
Other income
Total fee and other revenue
Consolidated
2023
$'000
4
—
68
72
2022
$'000
Restated
10
—
680
690
Company
2022
$'000
2023
$'000
—
—
107
107
—
6,739
—
6,739
100
ClearView Annual Report 2023
Notes to the Financial Statements 2. Results for the year continued
Investment management and related fees
Fees are charged to customers in connection with the provision of investment management and other related services.
These performance obligations are satisfied on an ongoing basis, usually daily, and recognised when it becomes highly
probable that the performance obligations will be met and a reversal will not occur in the future.
Gain on sale of investments in subsidiaries
Gain on sale of investments in subsidiaries is the difference between proceeds received and its carrying value.
2.5
Investment income
Consolidated
Interest income
Cash and cash equivalents
Investment securities at FVTPL
Loans and advances
Dividend income
Distribution income
Total investment income
Interest income
2023
$'000
2,432
10,704
141
—
36
13,313
Company
2022
$'000
2023
$'000
2022
$'000
Restated
306
4,958
148
—
2
5,414
346
—
2,654
21,946
—
24,946
162
—
1,885
7,000
—
9,047
Interest income on financial assets at amortised cost are recognised in profit or loss using the effective interest method.
Interest income on financial assets at fair value are recognised in profit or loss when earned or incurred.
Dividend income
Dividend income from investments is recognised when the Group’s right to receive payment has been established.
Distribution income
Distribution income from investments in unit trusts is recognised on a receivable basis as of the date the unit value is
quoted ex-distribution.
ClearView Wealth Limited
101
Notes to the Financial Statements 2. Results for the year continued
2.6 Operating expenses
Administration expenses
Administration and other operational costs
Total administration expenses
Employee costs and directors' fees
Employee expenses
Share based payments
Employee termination payments
Directors’ fees
Total employee costs and directors’ fees
Total operating expenses
Finance costs
Interest expenses
Other finance costs
Total finance costs
Depreciation and amortisation expenses
Depreciation expenses
Software amortisation
Depreciation of right-of-use assets
Total amortisation and depreciation expenses
Consolidated
2023
$'000
2022
$'000
Restated
Company
2022
$'000
2023
$'000
30,398
30,398
49,791
(166)
412
960
50,997
81,395
23,761
23,761
50,409
376
785
946
52,516
76,277
1,549
1,549
—
—
—
660
660
2,209
3,535
3,535
9
—
—
621
630
4,165
Consolidated
2022
$'000
2023
$'000
Restated
2023
$'000
Company
2022
$'000
7,242
10,065
17,307
4,878
4,680
9,558
7,242
820
8,062
4,880
843
5,723
Consolidated
2023
$'000
2022
$'000
Restated
344
2,045
2,995
5,384
263
1,454
3,079
4,796
Company
2022
$'000
2023
$'000
—
—
—
—
—
—
—
—
102
ClearView Annual Report 2023
Notes to the Financial Statements 2. Results for the year continued
Remuneration of auditors1
Auditor of the parent entity
Audit and review of financial reports
Audit of APRA and ASIC regulatory returns
Audit of Managed Investment Schemes
Total remuneration for audit services
Preparation and lodgement of tax returns
Other non-audit services - taxation advice
Other non-audit services - other assurance and agreed-upon
procedures under other legislation or contractual agreements
Other non-audit services - consulting2
Total remuneration for non-audit services
Total remuneration
Consolidated
2022
$
2023
$
Company
2022
$
2023
$
466,000
200,205
116,000
782,205
—
—
57,000
818,000
875,000
1,657,205
311,450
154,250
86,100
551,800
97,000
69,500
140,000
—
—
140,000
—
—
98,750
—
—
98,750
97,000
—
—
—
2,000
—
—
—
166,500
718,300
2,000
142,000
97,000
195,750
1
In FY23, $1,633,000 was paid to Ernst & Young, being the Group’s auditors, and $24,205 was paid to Deloitte Touche Tohmatsu for the audit in relation to ClearView
WealthSolutions Separately Managed Account. In FY22, all amounts were paid to Deloitte Touche Tohmatsu, being the Group’s auditors for this financial year.
2
This relates to the AASB 17 consulting services provided before Ernst & Young was appointed as ClearView’s auditors.
2.7 Taxes
Income tax
a) Income tax recognised in profit or loss
Income tax expense/(benefit) comprises:
Current tax expense/(benefit)
Deferred tax expense/(benefit)
Over provided in prior years – current tax expense/(benefit)
Under provided in prior years – deferred tax expense/(benefit)
Income tax expense/(benefit)
Income tax expense/(benefit) from discontinued operations
Income tax expense/(benefit) from continuing operations
b) Tax losses
Unused tax losses for which no deferred tax asset has been
recognised
Potential tax benefit
Consolidated
2023
$'000
2022
$'000
Restated
Company
2022
$'000
2023
$'000
10,744
4,465
87
(114)
15,182
7,748
7,434
11,230
(7,528)
11
—
3,713
(2,273)
5,986
(2,377)
228
(638)
(136)
(2,923)
—
(2,923)
(2,316)
324
—
—
(1,992)
—
(1,992)
1,463
439
11,079
1,400
1,463
439
1,463
439
ClearView Wealth Limited
103
Notes to the Financial Statements 2. Results for the year continued
The prima facie income tax expense/(benefit) on pre-tax accounting profit from operations reconciles to the income tax
expense in the financial statements as follows:
c) Reconciliation of income tax expense to prima facie tax
payable
Profit/(loss) before income tax expense from discontinued operations
Profit before income tax expense from continuing operations
Profit before income tax expense
Policyholder tax (expense) credit recognised as part of the change
in policyholder liabilities in determining profit before tax
Profit before income tax excluding tax charged to policyholders
Prima facie tax calculated at 30%
Tax effect of amounts which are non deductible/assessable in
calculating taxable income:
Dividends received from subsidiaries
Non deductible (assessable) book gain on sale
Non assessable income
Non deductible transaction costs
Other non deductible expenses
Deductible costs
Over (under) provision in prior years
Income tax expense/(benefit) attributable to shareholders
Income tax expense/(benefit) attributable to policyholders
Income tax expense/(benefit)
d) Amounts recognised directly in equity
Aggregate current and deferred tax arising in the reporting period
and not recognised in net profit or loss or other comprehensive
income but directly debited or (credited) to equity:
Current tax
Deferred tax
Consolidated
2022
$'000
2023
$'000
Restated
Company
2022
$'000
2023
$'000
3,908
28,382
32,290
(9,218)
23,072
6,922
—
97
(246)
—
66
—
(875)
5,964
9,218
15,182
(4,231)
17,383
13,152
1,919
15,071
4,521
—
—
(1,001)
780
596
—
736
5,632
(1,919)
3,713
—
15,448
15,448
—
15,448
4,634
(6,583)
—
(200)
—
—
—
(774)
(2,923)
—
(2,923)
—
6,432
6,432
—
6,432
1,930
(2,100)
(2,022)
(160)
780
53
(473)
—
(1,992)
—
(1,992)
—
—
—
—
—
—
—
—
104
ClearView Annual Report 2023
Notes to the Financial Statements 2. Results for the year continued
Deferred tax balances
Deferred tax assets1
The balance comprises temporary differences attributable to:
Accruals not currently deductible
Depreciable and amortisable assets
Provisions not currently deductible
Unrealised losses carried forward
Capital business expense
Lease assets
Deferred tax asset
Deferred tax asset from discontinued operations
Deferred tax asset from continuing operations
Deferred tax liabilities
The balance comprises temporary differences attributable to:
Prepaid expenses
Capitalised expenses
Deferred tax liability
Deferred tax liability from discontinued operations
Deferred tax liability from continuing operations
Consolidated
2022
$'000
2023
$'000
Company
2022
$'000
2023
$'000
567
15
4,530
2,386
—
44
7,542
285
7,257
549
36
585
—
585
877
673
3,604
6,452
89
220
11,915
—
11,915
492
114
606
—
606
27
—
264
291
—
291
35
35
—
35
170
—
292
—
—
—
462
—
462
—
114
114
—
114
1
Deferred income tax assets are recognised for tax losses carried forward to the extent that the realisation of the related tax benefit through future taxable profits is
probable. Tax losses (including capital losses) that is no longer available to be carried forward and utilised in the future is not disclosed. Tax losses that are available
to be carried forward and utilised but remained unused at balance date for which no deferred tax assets have been recognised are attributable to tax losses of a
capital nature of $1.5 million (tax effected $0.5 million) consolidated, of which none relating to life investment contracts (30 June 2022: tax losses of a capital nature
of $11.1 million with tax effected $1.4 million consolidated, of which $9.6 million with tax effected $1.0 million relating to life investment contracts), and $1.5 million (tax
effected $0.5 million) for the Company (30 June 2022: $1.5 million with tax effected $0.5 million).
Taxation
Income tax expense represents the sum of the tax currently payable (or receivable) and deferred tax. The Group’s current
tax and deferred tax is calculated using tax rates that have been enacted or substantively enacted by the end of the
reporting period or the relevant period in which the liability is settled or the asset realised. Current tax is net of any tax
instalment paid.
Current tax
The tax currently payable (or receivable) is based on taxable profit for the year less tax instalments paid. Taxable profit
differs from profit before tax as reported in the consolidated statement of profit or loss and other comprehensive income
because of items of income or expense that are taxable or deductible in other years and items that are never taxable or
deductible.
Deferred tax
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the
consolidated financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred
tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised
for all deductible temporary differences to the extent that it is probable that taxable profits will be available against
which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if
the temporary difference arises from the initial recognition (other than in a business combination) of assets and liabilities
in a transaction that affects neither the taxable profit nor the accounting profit. In addition, deferred tax liabilities are not
ClearView Wealth Limited
105
Notes to the Financial Statements 2. Results for the year continued
recognised if the temporary difference arises from the
head company of the tax consolidated group is treated as
initial recognition of goodwill.
The carrying amount of deferred tax assets is reviewed
at the end of each reporting period and reduced to the
a life insurance company for income tax purposes as one
of the subsidiary members of the tax consolidated group
is a life insurance company.
extent that it is no longer probable that sufficient taxable
Entities within the tax consolidated group have entered
profits will be available to allow all or part of the asset to
into a tax sharing and funding agreement with the head
be recovered.
The measurement of deferred tax liabilities and assets
reflects the tax consequences that would follow from the
manner in which the Group expects, at the end of the
entity. This agreement has been amended to reflect the
changes in the structure of the tax consolidated group
and a life insurer becoming part of the group. These
amendments were executed on 20 August 2010.
reporting period, to recover or settle the carrying amount
Under the terms of the tax funding arrangement,
of its assets and liabilities.
Deferred tax liabilities and assets are offset when there
is a legally enforceable right to set off current tax assets
against current tax liabilities and when they relate to
ClearView Wealth Limited and each of the entities in the
tax consolidated group has agreed to pay a tax equivalent
payment to or from the head entity, based on the current
tax liability or current tax asset of the entity.
income taxes levied by the same taxation authority and
The tax funding agreement also provides for the head
the Group intends to settle its current tax assets and
entity to make payments for tax losses of a group
liabilities on a net basis.
Goods and services tax
Revenues, expenses and assets are recognised net of the
amount of goods and services tax (GST), except:
• Where the amount of GST incurred is not recoverable
from the taxation authority, it is recognised as part of
the cost of acquisition of an asset or as part of an item
of expense; or
• For receivables and payables which are recognised
inclusive of GST.
The net amount of GST recoverable from, or payable to,
the taxation authority is included as part of receivables or
payables.
Cash flows are included in the cash flow statement
on a gross basis. The GST component of cash flows
arising from investing and financing activities which is
recoverable from, or payable to, the taxation authority is
classified within operating cash flows.
Relevance of tax consolidation to the Group
ClearView Wealth Limited and its wholly-owned
Australian resident entities have formed a tax
consolidated group with effect from 1 February 2007
and are therefore taxed as a single entity from that date.
The members in the ClearView tax consolidated group
includes subsidiaries as identified in 8.1.
Under the Tax Act, ClearView Wealth Limited being the
member that is determined in accordance with the
provisions of the agreement. Settlement for these
amounts is based on the extent to which the losses are
utilised.
The tax sharing arrangement between members of the
tax consolidated group provides for the determination
of the allocation of income tax liabilities between
the entities should the head entity default on its tax
payment obligations or if an entity should leave the
tax-consolidated group. The effect of the tax sharing
agreement is that each member’s liability for tax payable
by the tax consolidated group is limited to the amount
payable to the head entity under the tax funding
arrangement.
As a result of the sale of the financial advice businesses
to Centrepoint Alliance, the financial advice businesses
ceased to be wholly-owned subsidiaries and
consequently exited the ClearView Wealth Limited tax
consolidated group. Upon exit, ClearView Wealth Limited
agreed to release each entity of the financial advice
business from its obligation under the tax sharing and
funding agreement on 1 November 2021.
The financial advice businesses include the following
entities:
• ClearView Financial Advice Pty Ltd;
• Matrix Planning Solutions Limited; and
• LaVista Licensee Solutions Pty Ltd.
106
ClearView Annual Report 2023
Notes to the Financial Statements 2. Results for the year continued
Critical accounting estimates and key sources
of uncertainty
Deferred tax asset – timing differences
The Board has considered that it is probable that sufficient
taxable income will be available against which deductible
temporary differences can be utilised.
Deferred tax asset – capital losses
ClearView Life has amounts of realised and unrealised
capital losses within its superannuation business in its No.2
and No. 4 Statutory Funds. ClearView has a Deferred Tax
Asset (DTA) policy in place to cap the upper limit on the
deferred tax asset amount recognised on balance sheet.
This DTA cap is based on the capital losses estimated to
be utilised in the foreseeable future and is expressed as
a percentage of the value of the investments held. Any
amount exceeding the cap will not be recognised on
balance sheet. The same methodology has been adopted
for unit pricing purposes and this financial report. As at
the reporting date, there were no unrecognised DTA on
these losses.
As at the reporting date, the Group also has accumulated
capital losses that arose within the Company. At the
current time, it is unlikely that the capital losses can be
recouped and no DTA is recognised in respect of these
losses.
CRP receivable
In 1HFY21, ClearView’s primary superannuation life
insurance portfolio in ClearView Retirement Plan (CRP)
has been successfully transferred to the HUB24 Super
Fund (and continue to be administered by ClearView).
This resolved the build up of the CRP receivable
supported by ClearView Life Assurance Limited (CLAL)
and ClearView Wealth Limited Group (CWL).
As at 30 June 2023, CLAL and CWL carried a receivable
of $0.4 million (30 June 2022: $3.9 million). This is
after a write down of $0.3 million in the current year in
respect of the FY22 income tax year (2022: $0.9 million
for the FY21 income tax year) driven by the reduction
of the carried forward losses in CRP against its net
current pension exempt income in the respective year. In
addition, a provision of $0.4 million (30 June 2022: $0.6
million) was fully provided for the receivable.
ClearView Wealth Limited
107
Notes to the Financial Statements 3. Receivables, payables and investments
This note provides information about the Group’s receivables, payables
and investments including:
• an overview of the financial instruments held by the Group
• accounting policies
•
information about determining the fair value of the instruments, including judgements and
estimation uncertainty
109 3.1 Receivables
110 3.2 Payables
111
113 3.4 Financial risk management
3.3 Investments
108
ClearView Annual Report 2023
Notes to the Financial Statements 3. Receivables, payables and investments
3.1 Receivables
Trade receivables
Outstanding life insurance premium receivable net of provision
Other premium receivable1
Accrued dividends
Investment income receivable
Outstanding settlements
Prepayments
Receivables from controlled entities
Related party receivables net of provision3
Loans receivable net of provision2
Other debtors
Total receivables
Consolidated
30 June
2022
$'000
48
6,876
12,173
456
132
897
3,253
—
3,954
3,156
4,058
30 June
2023
$'000
—
7,206
15,053
—
—
—
3,342
—
516
3,204
1,136
30 June
2023
$'000
—
—
—
—
495
—
46
8,669
—
705
—
Company
30 June
2022
$'000
—
—
—
—
350
—
48
9,914
2,913
963
1,849
30,457
35,003
9,915
16,037
1 Other premium receivable includes rights to the realised tax benefit received by HUB24 Super Fund for the insurance premium deduction.
2
3
Loan receivable includes $1.4 million (30 June 2022: $1.9 million) loans to KMP, which are related to the ESP Plan.
Includes receivables from CRP $0.4 million (30 June 2022: $3.9 million) net of provision of $0.4 million (30 June 2022: $0.6 million).
Receivables
Receivables are measured at amortised cost, less any allowance for Expected Credit Losses (ECL’s), except for
prepayments which are measured at historical cost. See section 3.3 for more detail.
Receivables from insurance contracts are not required to be assessed for expected credit losses under AASB 9, however
amounts are provided for where appropriate.
ClearView Wealth Limited
109
Notes to the Financial Statements 3. Receivables, payables and investments continued
3.2 Payables
Trade payables
Reinsurance premium payable
Employee entitlements
Life insurance premiums in advance
Life investment premium deposits
Payables to controlled entities
Outstanding investment settlements
Other creditors
Total payables
Payables
Consolidated
30 June
2022
$'000
10,861
28,774
6,091
546
535
—
7
3,483
30 June
2023
$'000
5,649
30,109
7,311
699
470
—
4,514
3,429
30 June
2023
$'000
441
—
7
—
—
487
—
1,551
Company
30 June
2022
$'000
1,687
—
2
—
—
192
—
999
52,181
50,297
2,486
2,880
Payables are measured at the nominal amount payable. Given the short term nature of most payables, the nominal
amount payable approximates fair value.
Employee benefits
A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave and long service
leave when it is probable that settlement will be required and they are capable of being measured reliably.
Liabilities recognised in respect of short-term employee benefits, are measured at their nominal values using the
remuneration rate expected to apply at the time of settlement.
Liabilities recognised in respect of long term employee benefits are measured as the present value of the estimated
future cash outflows to be made by the Group in respect of services provided by employees up to reporting date. See
section 4.3 for more detail.
Termination benefit
A liability for a termination benefit is recognised at the earlier of when the entity can no longer withdraw the offer of the
termination benefit and when the entity recognises any related restructuring cost.
110
ClearView Annual Report 2023
Notes to the Financial Statements 3. Receivables, payables and investments continued
3.3 Investments
Growth investments
Investment in Group Companies
Equity investments
Interest-bearing investments1,2
Investments in subordinated debt
Short-term money
Government and semi-government bonds
Corporate bonds
Floating rate notes
Non-interest bearing investments
Short-term discount securities
Consolidated
30 June
2022
$'000
30 June
2023
$'000
30 June
2023
$'000
Company
30 June
2022
$'000
—
1,708,780
—
1,716,600
425,778
—
403,278
—
1,708,780 1,716,600
425,778
403,278
—
5,403
165,322
117,828
81,884
—
7,239
140,336
128,825
98,089
370,437
374,489
30,000
—
—
—
—
30,000
184,266
184,266
198,535
198,535
—
—
30,000
—
—
—
—
30,000
—
—
—
Reclassification to assets held for sale (see section 8.5(d))
(1,868,598)
—
(11,956)
Total investments
394,885 2,289,624
443,822
433,278
1
ClearView has contracted PIMCO to assist it with asset liability management. The mandate is to manage the shareholder funds that match the insurance liabilities
(including inflation), claims and capital reserves and surplus capital in the life company. At 30 June 2023 an investment of $413.4 million including $393.7 million in
interest securities and $19.7 million in cash (30 June 2022: $394.0 million including $385.1 million in interest securities and $8.9 million in cash) was held in the PIMCO
funds.
2 On 5 November 2020, the Company issued $75 million subordinated, unsecured notes to wholesale investors. These are unsecured, subordinated debt obligations
of the Company. Interest accrues on at a variable rate equal to the three-month Bank Bill Swap Rate (‘BBSW’) plus a margin of 6% per annum, until maturity, payable
quarterly in arrears. The Company utilised $30 million of the proceeds of the Notes for regulatory capital purposes for its regulated life insurance entity (ClearView
Life). ClearView Life pays the Company interest on the $30 million subordinated on the same terms as outlined above.
Financial instruments
Recognition and derecognition of financial assets and liabilities
Financial assets and financial liabilities are recognised at the date the Group becomes a party to the contractual
provisions of the instrument. At initial recognition, financial assets are classified as and subsequently measured at fair
value through profit or loss and amortised cost. The classification of financial assets at initial recognition depends on the
financial asset’s contractual cash flow characteristics and the Group’s business model for managing them.
Financial assets are derecognised when the contractual rights to the cash flows from the financial assets expire, or
are transferred. A transfer occurs when substantially all the risks and rewards of ownership of the financial asset are
passed to an unrelated third party. Financial liabilities are derecognised when the obligation specified in the contract is
discharged, cancelled or expires.
ClearView Wealth Limited
111
Notes to the Financial Statements 3. Receivables, payables and investments continued
Financial assets and liabilities
Financial assets measured at fair value through profit or
loss
Financial assets measured on initial recognition as financial
assets measured at fair value through profit or loss
are initially recognised at fair value, determined as the
purchase cost of the asset, exclusive of any transaction
costs. Transaction costs are expensed as incurred in profit
or loss. Any realised and unrealised gains or losses arising
from subsequent measurement at fair value are recognised
in profit or loss in the period in which they arise.
ECLs are based on the difference between the contractual
cash flows due in accordance with the contract and all the
cash flows that the Group expects to receive, discounted
at an approximation of the original effective interest rate.
The expected cash flows will include cash flows from the
sale of collateral held or other credit enhancements that
are integral to the contractual terms. ECLs are recognised
in two stages. For credit exposures for which there has
not been a significant increase in credit risk since initial
recognition, ECLs are provided for credit losses that result
from default events that are possible within the next
12-months (a 12-month ECL). For those credit exposures
The Group has elected to use their fair value option for all
for which there has been a significant increase in credit
investments as there would otherwise be an accounting
risk since initial recognition, a loss allowance is required
mismatch as the assets are held against investment policy
for credit losses expected over the remaining life of the
liabilities.
exposure, irrespective of the timing of the default (a
The Company’s investments in subordinated debt are
lifetime ECL).
measured at fair value through profit or loss.
For trade receivables and contract assets, the Group
Financial assets at amortised cost
The Group measures financial assets at amortised cost if
both of the following conditions are met:
• The financial asset is held within a business model with
the objective to hold financial assets in order to collect
contractual cash flows; and
• The contractual term of the financial asset give rise on
specified dates to cash flows that are solely payments
of principal and interest on the principal amount
outstanding.
Financial assets at amortised cost are subsequently
measured using the effective interest (EIR) method and
are subject to impairment testing. Gains and losses are
recognised in profit or loss when the asset is derecognised,
modified or impaired.
The Group’s financial assets at amortised cost includes
applies a simplified approach in calculating ECLs.
Therefore, the Group does not track changes in credit risk,
but instead recognises a loss allowance based on lifetime
ECLs at each reporting date. The Group has established a
provision matrix that is based on its historical credit loss
experience, adjusted for forward-looking factors specific
to the debtors and the economic environment.
The Group considers a financial asset in default when
contractual payments are 90 days past due. However,
in certain cases, the Group may also consider a financial
asset to be in default when internal or external information
indicates that the Group is unlikely to receive the
outstanding contractual amounts in full before taking into
account any credit enhancements held by the Group. A
financial asset is written off when there is no reasonable
expectation of recovering the contractual cash flows.
trade receivables and loans receivables.
Offsetting of financial instruments
Investments in Group Companies
The investments in Group Companies are measured at
costs less accumulated impairment. Impairments are
assessed at each financial reporting period.
Financial assets and financial liabilities are offset and the
net amount is reported in the consolidated statement of
financial position if there is a currently enforceable legal
right to offset the recognised amounts and there is an
intention to settle on a net basis, to realise the assets and
Impairment of financial assets
settle the liabilities simultaneously.
The Group applies a forward-looking expected credit loss
(‘ECL’) approach for the accounting for impairment losses
for financial assets in accordance with AASB 9. The Group
recognises an allowance for expected credit losses (ECLs)
for all debt instruments not held at fair value through profit
Fair value hierarchy
The table below summarises financial instruments carried
at fair value, by valuation method. The different levels have
been defined as follows:
or loss.
112
ClearView Annual Report 2023
Notes to the Financial Statements 3. Receivables, payables and investments continued
• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities. For the Group, this category
includes short-term money, short-term discount securities, government and semi-government bonds and equity
investments. The Company did not have any investment falling into this category.
• Level 2: inputs other than quoted prices included within level 2 that are observable for the asset or liability, either directly
(i.e. as prices) or indirectly (i.e. derived from prices). For the Group, this category primarily includes corporate bonds and
floating rate notes. For the Company, this category includes investments in subordinated debt. The valuation techniques
may include the use of discounted cash flow analysis using a yield curve appropriate to the remaining maturity of the
investments and other market accepted valuation models.
• Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs). The Group
and the Company did not have any investments falling into this category as at 30 June 2023 and 30 June 2022.
Consolidated
Financial assets
30 June 2023
Growth investments
Interest bearing investments
Non-interest bearing investments
Reclassification to assets held for sale (see section 8.5(d))
Total
30 June 2022
Growth investments
Interest bearing investments
Non-interest bearing investments
Total
Financial Liabilities
30 June 2023
Life investment policy liability
Liability to non-controlling interest in controlled unit trusts
Reclassification to liabilities directly associated with assets held for
sale (see section 8.5(d))
Total
30 June 2022
Life investment policy liability
Liability to non-controlling interest in controlled unit trusts
Total
Level 1
$'000
Level 2
$'000
Level 3
$'000
Total
$'000
1,708,780
170,725
184,266
(1,793,382)
—
199,712
—
(75,216)
270,389
124,496
1,716,600
147,575
198,535
—
226,914
—
— 1,708,780
370,437
—
184,266
—
— (1,868,598)
—
—
—
—
394,885
1,716,600
374,489
198,535
2,062,710
226,914
— 2,289,624
— 1,345,463
557,485
—
— 1,345,463
557,485
—
— (1,902,623)
— (1,902,623)
—
—
—
325
1,295,378
645,612
—
—
—
325
1,295,378
645,612
— 1,940,990
— 1,940,990
There were no transfers between Level 1 and Level 2 during the current and prior financial periods.
3.4 Financial risk management
Management of Financial Instruments
The financial assets of the Group (other than shareholder cash holdings) are managed by specialist investment managers
who are required to invest the assets allocated in accordance with directions from the Board. BNP Paribas acts as master
custodian on behalf of the Group and, as such, provides services including physical custody and safekeeping of assets,
settlement of trades, collection of dividends and accounting for investment transactions. Daily operating bank accounts
and shareholder cash are managed within the Group by the internal management and the finance department.
ClearView Wealth Limited
113
Notes to the Financial Statements 3. Receivables, payables and investments continued
a) Financial risk management objectives
In contrast to this, the Policyholder assets and other client
The primary asset risks borne by the Group relate to the
financial assets of the Group and its operating subsidiaries
excluding those in the non-guaranteed investment linked
funds in ClearView Life’s statutory fund No.4 (referred to
below as ClearView assets). The primary financial risks
related to the financial assets in the non-guaranteed
investment linked funds in ClearView Life’s statutory
fund No.4 are borne by policyholders as the investment
funds under management and under administration,
involve significant investment in equities. As noted
above, the Policyholder asset risks are borne by the
policyholders.
The Group is exposed to secondary risks on its investment
management fees that are driven by the total funds under
management, as well as reputational risks from poor
investment returns.
performance on those assets is passed through, in full,
The investment of the Policyholder assets and client
to the policyholders (referred to below as Policyholder
monies controlled by ClearView is undertaken in
assets). Nonetheless, the Group has a secondary exposure
accordance with the Investment Policy and Guidelines
to the Policyholder assets and off-balance sheet client
approved by the Board, which inter alia stipulates
funds, via the impact on the fees charged by the Group
the investment allocation mix, the portfolio’s risk
which vary with the level of Policyholder and client funds
characteristics, management response plans and the use
under management and under administration, as well as
of derivatives.
related reputational exposure.
b) Market risk
To the extent required, capital reserves are held in
accordance with the ICAAP with respect to the Group’s
residual fee risk exposure.
Market risk is the risk that financial assets will be affected
by changes in interest rates, foreign exchange rates and
c) Credit risk
equity prices.
Interest rate risk
Interest rate risk arises on ClearView’s assets which are
invested in floating rate investments and cash. Fixed
interest rate instruments expose the Group to fair value
interest rate risk. Interest rate risk is managed by the
Group through:
•
Investing ClearView’s assets in accordance with the
Board approved Investment Policy and Guidelines;
• Monitoring the investments at the ClearView Investment
Committee (CIC); and
• By holding capital reserves in accordance with the
Company’s ICAAP with respect to the residual interest
rate risk exposure retained, in addition to the regulatory
capital reserves held within ClearView Life in respect of
interest rate risk.
Equity price risk
Equity price risk is the risk that the fair value of
investments in equities decreases or increases as a result
of changes in market prices, whether those changes are
caused by factors specific to the individual share price or
factors affecting all equity instruments in the market. As
at 30 June 2023, ClearView’s shareholder related assets
were not invested in equities and therefore not exposed
to equity price risk.
Credit risk refers to the risk that a counterparty will
default on its contractual obligations resulting in financial
loss to the Group. Credit risk exposures arising from
investment activities are assessed by the Group’s internal
investment management committee (the ClearView
Investment Committee (CIC)) prior to investing ClearView
assets into any significant financial asset. The ongoing
credit standing of material investments are monitored by
the CIC.
The large majority of debt assets invested in by the Group
and on behalf of policyholders and clients (including
Policyholder assets) are managed under mandates with
appointed fund managers. Those mandates include
credit rating, diversification and maximum counterparty
exposure rules and standards that are to be met. The fund
managers adherence to those requirements are subject
to ongoing monitoring by the fund managers, and are
separately monitored by the Group’s custodian. The CIC
also receives reporting on mandate compliance on a
periodic basis.
Credit risk arising from other third party transactions,
such as reinsurance recovery exposures and exposure to
outsource service providers, are assessed prior to entering
into transactions with those parties, approved by the
Board where material, and are monitored on an ongoing
basis. ClearView does have a concentration risk with
114
ClearView Annual Report 2023
Notes to the Financial Statements 3. Receivables, payables and investments continued
Swiss Re and this is managed as outlined in section 6.6. Specific capital reserves are held against credit risk under the
regulatory capital requirements of ClearView Life and credit risk is considered within the Company’s ICAAP.
The following table reflects the shareholder financial assets with credit risk exposure monitored by the CIC. It excludes
policy holder financial assets and therefore represents shareholder assets invested in interest bearing securities at the
balance date.
Cash and cash equivalents, term deposits and investments
Rating
AAA
AA
A
BBB
Consolidated
2022
$'000
2023
$'000
2023
$'000
Company
2022
$'000
298,096
134,861
48,787
28,941
295,135
132,539
37,828
38,616
—
13,929
—
—
—
13,369
—
—
510,685
504,118
13,929
13,369
In addition to the credit risk exposures above, the Group’s balance sheet as at 30 June 2023 reflects a $56.3 million
(30 June 2022: $26.4 million) exposure to Swiss Re Life & Health Australia Ltd in relation to reinsurer’s share of policy
liabilities. Credit risk associated with receivables is considered low. The main receivables balance is in relation to
receivables from outstanding premiums receivable, accrued dividends, loans receivable, prepayments, outstanding
settlements and related party receivables. The concentration of other receivables is spread across the various debtors
except for the premium receivable of $15.0 million from HUB24 Super Fund (30 June 2022: $12.2 million) and related
party receivables. Further details on the related party receivable recoverability is outlined in section 8.3.
d) Liquidity risk
Liquidity risk is primarily the risk that the Group will encounter difficulty in meeting its obligations due to an inability to
realise some or all of its assets in order to fund its cash flow needs, including the payment of amounts to its policyholders,
members and clients. A secondary risk relates to the risk of the illiquidity of the external (including off balance sheet)
funds clients invest in, which may result in restricted fee flows to the Group and/or reputational damage via association.
The primary risk is managed by investing the Group’s funds, excluding those that are invested at the direction of the
client, in accordance with the liquidity policy. This requires assets to be invested in vehicles that are highly liquid and
readily convertible into cash. In addition, the Group maintains suitable cash holdings at call and an appropriate overdraft
facility.
The Group’s cash flow requirements are reviewed and forecast on a regular basis. This assessment takes into account the
timing of expected cash flows, the likelihood of significant benefit outflows over the short term and known significant
one-off payments.
ClearView Wealth Limited
115
Notes to the Financial Statements 3. Receivables, payables and investments continued
Under the terms of the Group’s products (issued via ClearView Life and ClearView Financial Management) the payment
of unit fund redemptions to policyholders and unit trust investors may be delayed, if necessary, until funds are available.
To date no such delays have been imposed.
The following tables summarise the maturity analysis of the Group’s and the Company’s financial assets based on the
contractual maturity dates of undiscounted cash flows at the reporting date.
2023
Receivables
Outstanding life insurance premiums net of
provision
Other premium receivable
Loan receivables net of provision
Prepayments
Related party receivable net of provision
Total
2022
Receivables
Outstanding life insurance premiums net of
provision
Other premium receivable
Accrued dividends
Investment income and distribution income
Loan receivables net of provision
Prepayments
Related party receivable net of provision
Total
2023
Trade receivables
Receivables from controlled entities
Loan receivables net of provision
Total
2022
Trade receivables
Receivables from controlled entities
Loan receivables net of provision
Related party receivables
Total
Consolidated
Less than
3 months
$'000
1,136
3 to 6
months
$'000
—
6 months
to a year
$'000
—
1 year and
over
$'000
—
Over 5
years
$'000
—
7,189
—
—
2,164
516
11,005
5,003
6,859
—
456
132
—
2,111
1,041
15,602
11
—
—
483
—
494
—
11
—
—
—
—
574
—
585
6
15,053
—
673
—
15,732
—
—
3,204
22
—
3,226
—
—
6
12,173
—
—
—
435
—
—
—
—
—
3,156
133
2,913
12,614
6,202
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Less than
3 months
$'000
21
9,164
—
9,185
1,872
10,264
—
—
12,136
3 to 6
months
$'000
15
—
—
6 months
to a year
$'000
10
—
—
1 year and
over
$'000
—
—
705
Over 5
years
$'000
—
—
—
15
18
—
—
—
18
10
705
7
—
—
—
7
—
—
963
2,913
3,876
—
—
—
—
—
—
Total
$'000
1,136
7,206
15,053
3,204
3,342
516
30,457
5,003
6,876
12,173
456
132
3,156
3,253
3,954
35,003
Company
Total
$'000
46
9,164
705
9,915
1,897
10,264
963
2,913
16,037
116
ClearView Annual Report 2023
Notes to the Financial Statements 3. Receivables, payables and investments continued
The following tables summarise the maturity analysis of the Group and the Company’s financial liabilities. The tables
have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the
Group and the Company can be required to pay.
2023
Payables
Reinsurance payable1
Lease liabilities
Borrowings2
Subordinated debt2
Total
2022
Payables
Reinsurance payable1
Lease liabilities
Borrowings2
Subordinated debt2
Total
2023
Payables
2022
Payables
Consolidated
Less than
3 months
$'000
22,072
30,109
810
213
1,907
3 to 6
months
$'000
—
—
803
213
1,907
6 months
to a year
$'000
—
—
1,553
426
3,813
1 year and
over
$'000
—
—
5,979
17,797
30,507
Over 5
years
$'000
—
—
—
—
94,067
Total
$'000
22,072
30,109
9,145
18,649
132,201
55,111
2,923
5,792
54,283
94,067
212,176
20,965
28,774
786
106
1,304
51,935
558
—
786
149
1,582
3,075
—
—
1,543
343
3,388
5,274
—
—
8,685
18,650
30,507
—
—
—
—
101,694
21,523
28,774
11,800
19,248
138,475
57,842
101,694
219,820
Less than
3 months
$'000
2,486
3 to 6
months
$'000
—
6 months
to a year
$'000
—
1 year and
over
$'000
—
Over 5
years
$'000
—
Company
Total
$'000
2,486
2,880
—
—
—
—
2,880
1
2
Reinsurance payable represents reinsurance premium payable on reinsurance due in respect of life insurance premium.
Included contractual interest payments are undiscounted and calculated based on prevailing market floating rates as applicable at the reporting date.
Interest rate risk management
The Group’s activities expose it to the financial risk of changes in interest rates. Floating rate instruments expose the
Group to cash flow risk and credit spread risks, whereas fixed interest rate instruments expose the Group to fair value
interest rate risk. The Board monitors the Group’s exposures to interest rate risk.
In December 2020, ClearView updated its investment strategy and appointed PIMCO with a specialist investment
mandate to manage, in close consultation with ClearView’s, the shareholder funds that match the insurance liabilities and
reserves in the life company. The PIMCO mandate is monitored on a periodic basis by the CIC.
At 30 June 2023, $413.4 million including $393.7 million in interest securities and $19.7 million in cash (30 June 2022:
$394.0 million including $385.1 million in interest securities and $8.9 million in cash) is invested in the PIMCO funds. An
overall investment income of $10.4 million after tax was made in the year ended 30 June 2023 (2022: loss of $5.4 million).
ClearView Wealth Limited
117
Notes to the Financial Statements 3. Receivables, payables and investments continued
The tables below detail the shareholder’s exposure to interest rate risk at the balance sheet date.
Variable interest rate instruments
Financial assets
Cash and cash equivalents
Floating rate notes
Total
Financial liabilities
Borrowings
Subordinated debt
Total
Consolidated
2022
$'000
2023
$'000
94,045
44,529
138,574
16,000
75,000
91,000
116,132
54,550
170,682
16,000
75,000
91,000
2023
$'000
13,929
—
13,929
—
—
—
Company
2022
$'000
13,369
—
13,369
—
—
—
Interest rate sensitivity analysis for floating rate financial instruments
The sensitivity analysis below has been determined based on the Group’s exposure to interest rates at the reporting date
and the stipulated change taking place at the beginning of the financial year and held constant throughout the reporting
period. In the case of instruments that have floating interest rates, a 1.0% (2022: 1.0%) increase or decrease is used
when reporting interest risk internally to key management personal and represents management’s assessment of the
reasonably possible change in interest rates.
The following table illustrates the effect on the Group from possible changes in market risk that are reasonably possible
based on the risk the Group was exposed to at reporting date:
Effect on operating
profit
Consolidated
Effect on securities
Consolidated
Effect on operating
profit
Company
Effect on securities
±1.0% (2022: ±1.0%)
2023
$'000
±476
2022
$'000
±797
2023
$'000
±476
2022
$'000
±797
2023
$'000
±139
2022
$'000
±134
2023
$'000
±139
Company
2022
$'000
±134
The method used to prepare the sensitivity analysis has not changed in the year. Based on the market exposure
management believe that the interest rate variation above is considered appropriate in the current environment.
Fair value sensitivity analysis for fixed rate financial instruments
The Group does account for fixed rate financial assets and liabilities at fair value through profit and loss. However, as
these assets are currently only held in the investment linked funds, a change in long term interest rates at reporting date
would not affect profit and loss as the risks are borne by policyholders.
e) Foreign currency risk management
Foreign currency risk is the risk that the market value of future cash flows of a financial instrument will fluctuate because
of changes in foreign exchange rates. The Group undertakes certain investments denominated in foreign currencies,
hence is exposed to the effects of exchange rate fluctuations. However, the foreign currency risk is borne by the
policyholder and the shareholder has no direct exposure to foreign currency.
Forward foreign exchange contracts
The Group currently does not make use of forward foreign exchange contracts.
118
ClearView Annual Report 2023
Notes to the Financial Statements 4. Non-financial assets and liabilities
This note provides information about the Group’s non-financial assets and
liabilities, including:
• specific information about each type of non-financial asset and non-financial liability
• Goodwill and intangibles
• Provisions
• accounting policies
120 4.1 Goodwill and intangibles
121 4.2 Recovery of intangible
123 4.3 Provisions
assets and goodwill
ClearView Wealth Limited
119
Notes to the Financial Statements 4. Non-financial assets and liabilities
4.1 Goodwill and intangibles
2023
Gross carrying amount
Balance at the beginning of the financial year
Acquired directly during the year1
Reclassification to assets held for sale (see section
8.5(d))
Balance at the end of the financial year
Accumulated amortisation and impairment losses
Balance at the beginning of the year
Amortisation expense in the current year
Reclassification to assets held for sale
Balance at the end of the financial year
Net book value
Balance at the beginning of the financial year
Balance at the end of the financial year
2022
Gross carrying amount
Balance at the beginning of the financial year
Acquired directly during the year
Disposals (see section 8.5(c))
Balance at the end of the financial year
Accumulated amortisation and impairment losses
Balance at the beginning of the year
Amortisation expense in the current year
Balance at the end of the financial year
Net book value
Balance at the beginning of the financial year
Balance at the end of the financial year
Goodwill
$'000
Capitalised
software
$'000
Client
Book
$'000
Consolidated
Total
intangibles
$'000
Matrix
Brand
$'000
20,452
—
66,616
12,690
65,017
—
(8,500)
11,952
(19,198)
60,108
—
65,017
7,941
—
—
7,941
12,511
4,011
49,278
3,069
(16,316)
64,987
—
—
36,031
64,987
17,338
24,077
30
30
—
—
—
—
—
—
—
—
—
—
131,633
12,690
(19,198)
125,125
114,265
3,069
(16,316)
101,018
17,368
24,107
Goodwill
$'000
Capitalised
software
$'000
Client
Book
$'000
Matrix
Brand
$'000
Total
intangibles
$'000
20,452
—
—
20,452
7,941
—
7,941
12,511
12,511
54,056
12,560
—
66,616
65,017
—
—
65,017
46,537
2,741
64,987
—
49,278
64,987
200
—
(200)
—
—
—
—
119,273
12,560
(200)
131,633
111,524
2,741
114,265
7,519
17,338
30
30
200
—
7,749
17,368
1
Includes $11.2 million (30 June 2022: $11.9 million) of capitalised costs in relation to the capitalisation of configuration and customisation costs in SaaS arrangements.
120
ClearView Annual Report 2023
Notes to the Financial Statements 4. Non-financial assets and liabilities continued
As required under accounting standards the Group
Client books
completes an impairment assessment at each reporting
date. As at 30 June 2023, no impairment charge was
recognised (2022: nil). This is discussed further in section
4.2.
Goodwill and Intangibles accounting policy
Goodwill
Goodwill acquired in a business combination is recognised
at cost and subsequently measured at cost less any
accumulated impairment losses. The cost represents the
excess of the cost of a business combination over the
fair value of the identifiable assets acquired and liabilities
assumed.
Capitalised software
Costs are capitalised when the costs relate to the creation
of an asset with expected future economic benefits which
are capable of reliable measurement. Capitalised costs
are amortised on a straight-line basis over the estimated
useful life of the asset, commencing at the time the asset
is first put into use or held ready for use, whichever is the
earlier.
Client book intangibles represent the value of the in-
force insurance and investment contracts and funds
management revenues. Each client book has its own
assessment of useful life depending on the nature of the
clients in each segment and their relative characteristics,
based on age, demographics and type of product to
which it relates. The policy adopted to write-off the client
books resembles the anticipated ageing profile of the
revenue stream.
Amortisation
Intangible assets with finite useful lives are amortised on
a straight-line basis over the useful life of the intangible
asset. The estimated useful lives are generally:
2023
Up to 3 years,
with major
core software
infrastructure
amortised over a
period up to 10
years
6–10 years
Indefinite
2022
Up to 3 years,
with major
core software
infrastructure
amortised over a
period up to 10
years
6–10 years
Indefinite
Software
Client books
Goodwill
Capitalisation of configuration and customisation costs
in SaaS arrangements
Impairment testing
In implementing SaaS arrangements, the Group has
Goodwill and intangible assets that have indefinite useful
developed software code that enhances, modifies and
lives are tested at least annually for impairment. Other
creates additional capability to the software to which it
intangible assets are reviewed for impairment whenever
owns the intellectual property. This software increases
events or changes in circumstances indicate that the
the functionality of the SaaS arrangement cloud-based
carrying amount may not be recoverable.
application and includes a new underwriting rules engine,
front end portal and integrations with existing ERP
systems. Judgement has been applied in determining
whether the changes to the owned software meets the
definition of and recognition criteria for an intangible asset
in accordance with AASB 138 Intangible Assets.
During the financial year, the Group recognised $11.2
million (2022: $11.9 million) as intangible assets in respect
of customisation and configuration costs incurred in
implementing SaaS arrangements. These intangible assets
For the purposes of assessing impairment, assets are
grouped at the lowest levels for which there are separately
identifiable cash flows (cash-generating units or CGUs).
An impairment loss is recognised when the goodwill
carrying amount exceeds the CGU’s recoverable amount.
4.2 Recoverability of intangible
assets and goodwill
Goodwill and client book intangibles
are amortised on a straight-line basis with the new PAS
The goodwill and intangibles primarily arose from the
being amortised over the useful life of 10 years. As at 30
acquisition of:
June 2023, the accumulated amortisation of $2.0 million
• the business of Community and Corporate Pty Limited
(30 June 2022: $0.6 million) has been recognised for the
in April 2009;
intangible assets in use.
• ClearView Group Holdings Pty Limited in June 2010;
ClearView Wealth Limited
121
Notes to the Financial Statements 4. Non-financial assets and liabilities continued
• Matrix Planning Solutions Limited in October 2014; and
A risk free rate of 4.0% has been adopted for the purposes
• other business combinations where ClearView Wealth
Limited was the acquirer.
The goodwill that arose on acquisition was allocated
across the Financial Advice, Life Insurance and Wealth
of the embedded value calculations at 30 June 2023 (30
June 2022: 3.5%) with a range of discount range margins
of 3%, 4% and 5% above the risk free rate.
See section 5.6 for actuarial estimates and assumptions
Management CGU’s of the Group based on the expected
and section 1 (j) for the potential impacts of COVID-19
synergies expected to be gained by each CGU within the
that has been taken into accounting in setting these
Group.
assumptions.
At the balance date goodwill was allocated as follows:
For sensitivities on the EV calculations and their potential
• $4.0 million to the Life Insurance segment; and
• $8.5 million to the Wealth Management segment.
As a result of the Wealth Management divestment, the
goodwill recognised within the Wealth Management
CGU’s is included in the assets held for sale at 30 June
2023 and is part of the impairment testing for the disposal
group. See section 8.5 for detail.
impacts on the carrying value of the Goodwill and
impairment triggers, please refer to the EV section of the
Operating and Financial Review.
As at 30 June 2023, no impairment was required to the
carrying value of goodwill within the Life Insurance CGU’s.
The carrying value of the Financial Advice Goodwill and
client book intangibles was fully impaired in the 2019
financial year and the financial advice businesses were
The goodwill recognised within the Life Insurance CGU’s is
subsequently sold in 2021.
tested for impairment triggers using the embedded value
methodology by comparing the carrying value of goodwill
Matrix Brand
to the in-force portfolios written to date.
The recoverable amount for the Life Insurance CGU’s
has been determined based on the embedded value
calculations as at 30 June 2023. The embedded value is
a calculation that represents the economic value of the
shareholder capital in the business and the future profits
expected to emerge from the business currently in-force
On 25 August 2021, ClearView announced the sale of its
financial advice businesses to Centrepoint Alliance, with
completion of the sale occurring on 1 November 2021. The
Matrix brand was disposed as part of the sale and its cost
of $0.2 million was written off and included in the gain on
sale. Refer to section 8.5(c) for detail.
Capitalised software impairment
expressed in today’s dollars. No account is taken of future
At each reporting period the internally generated software
new business in the embedded value calculations.
The estimated embedded value of the business has been
calculated based on the following key assumptions and
estimates:
• Mortality and morbidity (claims)
•
Investment returns and discount rates;
• Persistency (lapse);
• Premium rate and pricing changes (staggered price
increases over a period of time);
• Outflows; and
• Maintenance costs.
The embedded value uses assumptions that are consistent
is assessed for any impairment triggers. If any such
indication exists, the recoverable amount of the asset
is estimated. The impairment indicators for software
intangibles are defined as:
• The ability of the software to provide the functionality
required from the business to use the asset;
• The software is being utilised for the purposes that it
was designed;
• The availability of alternative software that the business
has available; and
• Product mix – the Group no longer sells the products
that are administered on the PAS or utilises the provided
functionality.
with those adopted for policy liabilities in this financial
As at 30 June 2023, no impairment was required to the
report.
122
carrying value of capitalised software.
ClearView Annual Report 2023
Notes to the Financial Statements 4. Non-financial assets and liabilities continued
4.3 Provisions
Current and non current
Make good provision
Employee leave provisions
Provision for restructuring
Provision for onerous lease
Other provisions
Total
Consolidated
2023
$'000
2022
$'000
2023
$'000
Company
2022
$'000
145
5,306
2,323
29
795
8,598
193
5,044
693
168
223
6,321
—
—
—
—
28
28
—
—
—
—
19
19
Movement of each class of provision during the financial year is set out below:
Employee
Make good
leave
Provision for
Provision for
Other
provision1
provision2
restructuring3
onerous lease
provision4
Total
Consolidated
193
25
(73)
145
169
24
—
—
—
—
5,044
1,181
(919)
693
2,073
(443)
5,306
2,323
5,477
1,567
(872)
—
(1,128)
—
—
693
—
—
—
—
168
—
(139)
29
—
250
(82)
—
—
—
223
594
(22)
795
1,913
87
(1,475)
54
—
(356)
193
5,044
693
168
223
6,321
3,873
(1,596)
8,598
7,559
2,621
(2,429)
54
(1,128)
(356)
6,321
2023
Balance at the beginning of
the financial year
Additional provisions raised
Utilised during the period
Balance at the end of the
financial year
2022
Balance at the beginning of
the financial year
Additional provisions raised
Utilised during the period
Unutilised provisions (net of
recoveries) transferred
Transferred as part of the sale
of Advice Business
Disposed as part of the sale of
Advice Business
Balance at the end of the
financial year
Company
Balance at the beginning of the financial
year
Additional provisions raised
Utilised during the period
Balance at the end of the financial year
Other provision
2023
2022
19
20
(11)
28
1,437
26
(1,444)
19
1
The provision for make good represents the accrued liability for expected costs in relation to the restoration of leased premises on the termination of the lease. The
provisions are expected to be settled on vacating the leased premises on expiration of the relevant lease.
2
The provision for employee leave represents annual leave and long service leave entitlements accrued by employees. The provisions are expected to be utilised in
accordance with the pattern of consumption of employees utilising their leave entitlements.
3
The provision for restructuring relates to the expected costs in relation to the restructure announced in June 2023.
4 Other provisions predominately relate to the provision for long outstanding reinsurance recovery receivables.
ClearView Wealth Limited
123
Notes to the Financial Statements 4. Non-financial assets and liabilities continued
Accounting policy
Onerous contracts
Provisions are recognised when the Group has a present
Present obligations arising under onerous contracts are
obligation (legal or constructive) as a result of a past
recognised and measured as provisions. An onerous
event, it is probable that the Group will be required to
contract is considered to exist where the Group has a
settle the obligation, and a reliable estimate can be made
contract under which the unavoidable costs of meeting
of the amount of the obligation.
the obligations under the contract exceed the economic
The amount recognised as a provision is the best estimate
of the consideration required to settle the present
obligation at the end of the reporting period, taking
into account the risks and uncertainties surrounding
the obligation. When a provision is measured using the
cash flows estimated to settle the present obligation, its
carrying amount is the present value of those cash flows
(where the effect of the time value of money is material).
benefits expected to be received from the contract.
Restructurings
A restructuring provision is recognised when the Group
has developed a detailed formal plan for the restructuring
and has raised a valid expectation in those affected
that it will carry out the restructuring by starting to
implement the plan or announcing its main features to
When some or all of the economic benefits required to
those affected by it. The measurement of a restructuring
settle a provision are expected to be recovered from a
provision includes only the direct expenditures arising
third party, a receivable is recognised as an asset if it is
from the restructuring, which are those amounts that are
virtually certain that reimbursement will be received and
both necessarily entailed by the restructuring and not
the amount of the receivable can be measured reliably.
associated with the ongoing activities of the entity.
Annual leave
Liability for annual leave is recognised at the nominal
amounts unpaid at the reporting date using remuneration
rates that are expected to be paid when the liability is
settled, including on-costs.
Long service leave
A liability for long service leave is recognised as the
present value of estimated future cash outflows to be
made in respect of services provided by employees up
to the reporting date. The estimated future cash outflows
are discounted using corporate bond yields which have
terms to maturity that match, as closely as possible, the
estimated future cash outflows. Factors which affect the
estimated future cashflows such as expected future salary
increases and experience of employee departures, are
incorporated in the measurement.
124
ClearView Annual Report 2023
Notes to the Financial Statements 5. Life insurance and investment contracts
The Group’s life insurance activities are conducted through its registered life insurance company ClearView
Life Assurance Limited. This section explains how ClearView Life Assurance measures its life insurance and
investment contracts, including the methodologies and key assumptions applied
It also details the key components of the profits that are recognised in respect of the life insurance
contracts and the sensitivities of those profits to variations in assumptions.
5.1 Accounting for life
by Statutory Fund
insurance and investment
contracts
126
128 5.2 Disaggregated information
131 5.3 Sources of profit
132 5.4 Policy liabilities
133 5.5 Capital adequacy
134 5.6 Actuarial methods and
assumptions
5.7 Critical accounting
judgements and key
sources of estimation
uncertainty
138
ClearView Wealth Limited
125
Notes to the Financial Statements 5. Life insurance and investment contracts
5.1 Accounting for life insurance
and investment contracts
Principles underlying the conduct of life
insurance business
at fair value through profit and loss. ClearView Life has
determined that all assets held within the statutory funds
back policy liabilities. Financial assets backing policy
liabilities consist of high quality investments such as cash
and fixed income securities. The management of financial
assets and policy liabilities is closely monitored to ensure
The life insurance operations of the Group are conducted
within separate statutory funds as required by the
that investments are appropriate given the expected
pattern of future cash flows arising from the policy
Life Insurance Act 1995 (Life Act) and are reported in
liabilities.
aggregate with the shareholders’ funds in the statement
of profit or loss and other comprehensive income,
Premium revenue
statement of financial position, statement of changes in
equity and statement of cash flows. The life insurance
operations consist of the provision of life insurance and
life investment contracts.
Life insurance contracts involve the acceptance of
significant insurance risk. Insurance risk is defined as
significant if, and only if, an insured event could cause
an insurer to pay significant benefits in any scenario,
excluding scenarios that lack commercial substance.
Insurance contracts include those where the insured
Premium revenue only arises in respect of life insurance
contracts. Premiums with a regular due date are
recognised as revenue on a due basis. Premiums with no
due date are recognised as revenue on a cash received or
receivable basis.
Unpaid premiums are only recognised as revenue
during the days of grace and are included as Premiums
Receivable (part of Receivables) in the statement of
financial position.
benefit is payable on the occurrence of a specified event
Premiums due after, but received before, the end of the
such as death, injury or disability caused by accident or
financial year are shown as Life Insurance Premium in
illness. The insured benefit is not linked to the market
Advance (part of Payables) in the statement of financial
value of the investments held by the Group, and the
position.
financial risks are substantially borne by the Group.
Premiums and contributions on life investment contracts
Any contracts issued by the Group and regulated
are treated as deposits and are reported as a movement
under the Life Act that do not meet the definition of a
in life investment contract liabilities.
life insurance contract are classified as life investment
contracts. Life investment contracts include investment-
Claims
linked contracts where the benefit is directly linked to
the market value of the investments held in the particular
investment linked fund.
While the underlying assets are registered in the name of
ClearView Life Assurance Limited (ClearView Life) and
the investment-linked policy owner has no direct access
to the specific assets, the contractual arrangements are
such that the investment-linked policy owner bears the
risks and rewards of the fund’s investment performance.
A component of the life investment contracts includes
a minimum unit price guarantee. ClearView Life derives
fee income from the administration of investment linked
funds. Life investment contracts do not contain any
discretionary participation features (i.e. those where the
amount or timing of allocation of the profit from the
underlying investments is at the discretion of the insurer).
In accordance with AASB 1038 ‘Life Insurance Contracts’,
financial assets backing policy liabilities are designated
Life insurance contracts
Claims incurred relate to life insurance contracts and
are treated as expenses. Claims are recognised upon
notification of the insured event. The liability in respect
of claims includes an allowance (estimate) for incurred
but not reported claims and an allowance (estimate)
for expected declination of notified claims. Claims are
shown gross of reinsurance recoverable. Any reinsurance
recoveries applicable to the claims are included in
receivables.
Life investment contracts
There is no claims expense in respect of life investment
contracts. Surrenders and withdrawals which relate to
life investment contracts are treated as a movement
in life investment contract liabilities. Surrenders and
126
ClearView Annual Report 2023
Notes to the Financial Statements 5. Life insurance and investment contracts continued
withdrawals are recognised as at the date of redemption
of policy units, which occurs once all documentation has
been provided and completed.
Reinsurance
Amounts paid to reinsurers under life insurance contracts
held by ClearView Life are recorded as an outward
reinsurance expense and are recognised in the statement
of profit or loss and other comprehensive income from
the reinsurance premium payment due date. Reinsurance
recoveries receivable on claims incurred are recognised
as revenue. Recoveries are assessed in a manner similar
to the assessment of life insurance contract liabilities.
Recoveries are measured as the present value of the
expected future receipts, calculated on the same basis as
the life insurance contract liabilities.
Policy acquisition costs
The policy acquisition costs incurred are recorded in the
statement of profit or loss and other comprehensive
income and represent the fixed and variable costs of
acquiring new business. The policy acquisition costs
include commission, policy issue and underwriting costs,
and related costs.
the funds in proportion to the activities to which they
relate. They are apportioned between policy acquisition
costs and policy maintenance costs in relation to their
nature as either acquisition or maintenance activities.
Activities are based on direct measures such as time,
head counts and business volumes.
• Life investment contracts are held within statutory
funds No.2 and No.4. Life insurance contracts are held
within statutory fund No.1. The allocation of expenses
between the primary life investment or life insurance
contracts is inherent in the allocation to the statutory
funds, as described above. The apportionment basis
is in line with the principles set in the Life Insurance
Prudential Standard valuation standard (Prudential
Standard LPS340 Valuation of Policy Liabilities).
Policy liabilities
Policy liabilities consist of life insurance policy liabilities
and life investment policy liabilities.
Life insurance contracts
The value of life insurance policy liabilities is calculated
using the Margin on Services methodology. Under this
methodology, planned profit margins and an estimate
of future liabilities are calculated separately for each
The acquisition costs incurred in relation to life insurance
related product group, with future cash flows determined
contracts are capitalised in the valuation of policy
using best estimate assumptions and discounted to the
liabilities.
reporting date. Profit margins are systematically released
over the term of the policies in line with the pattern of
Basis of expense apportionment
services to be provided. The future planned profit margins
All expenses of the life insurance business incurred by
ClearView Life and charged to the statement of profit
or loss and other comprehensive income have been
apportioned in accordance with Part 6, Division 2 of the
Life Act. These expenses are related to non-participating
business as ClearView Life only write this category of
business.
The basis is as follows:
• Expenses relating specifically to either the ClearView
Life shareholder’s fund or a particular statutory fund
are allocated directly to the respective funds. Such
expenses are apportioned between policy acquisition
costs and policy maintenance costs with reference to
the objective when each expense is incurred and the
outcome achieved.
• Other expenses are subject to apportionment under
section 80 of the Life Act and are allocated between
are deferred and recognised over time by including the
value of the future planned profit margins within the value
of the policy liabilities. Further details of the actuarial
assumptions used in these calculations are set out in
section 5.6.
Life investment contracts
Life investment policy liabilities are valued at fair value,
which is based on the valuation of the assets held within
the unitised investment linked policy investment pools.
As a result of the wealth management divestment, the
assets and liabilities of the policyholders’ fund of statutory
fund 4, including the associated life investment policy
liabilities, are classified as held for sale as at 30 June 2023.
See section 8.5 for detail.
ClearView Wealth Limited
127
Notes to the Financial Statements 5. Life insurance and investment contracts continued
5.2 Disaggregated information by Statutory Fund
Abbreviated income statement
Shareholders
Fund
Statutory
Fund No.1
Statutory
Fund No.2
Statutory
Fund No.4
Total
ClearView Life Assurance Limited
Australian Non-Participating
2023
Life insurance premium revenue
Outwards reinsurance expense
Fee revenue
Investment revenue
Net fair gains/(losses) on financial assets at fair value
Net revenue and income
Claims expense
Reinsurance recoveries
Change in life insurance policy liabilities
Change in life investment policy liabilities
Change in reinsurers’ share of life insurance liabilities
Other expenses
Profit for the financial year before income tax
Income tax (expense)/benefit
Net profit/(loss) for the financial year from continuing
operations
Loss from discontinued operations
Total profit/(loss) attributable to members of
ClearView Life Assurance Limited
$'000
$'000
325,131
—
— (120,961)
—
—
12,027
5
4,195
—
5
220,392
— (132,774)
94,913
—
(21,027)
—
—
—
—
23,083
— (150,823)
5
(2)
33,764
(10,267)
23,497
—
3
—
3
$'000
—
—
5
37
(6)
36
—
—
—
(242)
—
(7)
(213)
(3)
(216)
—
$'000
$'000
325,131
—
— (120,961)
5
—
12,479
410
4,189
—
410
220,843
— (132,774)
94,913
—
(21,027)
—
(242)
—
—
23,083
— (150,830)
410
—
33,966
(10,272)
410
(1,748)
23,694
(1,748)
23,497
(216)
(1,338)
21,946
128
ClearView Annual Report 2023
Notes to the Financial Statements 5. Life insurance and investment contracts continued
Abbreviated statement of financial position
Shareholders
Statutory
Statutory
Statutory
Fund
Fund No.1
Fund No.2
Fund No.4
Total
ClearView Life Assurance Limited
2023
Investments in financial assets
Assets held for sale
Policy liabilities ceded under reinsurance
Other assets
Total assets
Liabilities directly associated with assets held for sale
Gross policy liabilities - Life insurance contracts
Gross policy liabilities - Investment insurance
contracts
Other liabilities
Total liabilities
Net assets
Shareholder’s retained profits/(losses)
Opening retained profits/(losses)
Operating profit
Capital transfer between funds
Dividend paid
Shareholder’s retained profits/(losses)
Shareholder’s capital
Total equity
$'000
—
—
—
573
573
—
—
—
180
180
393
(73,091)
3
21,946
(21,946)
(73,088)
73,481
393
$'000
393,743
—
56,329
109,662
559,734
—
16,035
—
85,032
101,067
458,667
281,160
23,497
(22,946)
—
281,711
176,956
458,667
Australian Non-Participating
$'000
1,141
$'000
—
— 1,353,056
—
—
6,032
1,242
2,383
1,359,088
— 1,350,088
—
—
$'000
394,884
1,353,056
56,329
117,509
1,921,778
1,350,088
16,035
325
1,477
1,802
581
597
(216)
—
—
381
200
581
—
(745)
325
85,944
1,349,343
9,745
1,452,392
469,386
8,483
(1,338)
1,000
—
8,145
1,600
9,745
217,149
21,946
—
(21,946)
217,149
252,237
469,386
ClearView Wealth Limited
129
Notes to the Financial Statements 5. Life insurance and investment contracts continued
Abbreviated income statement
2022
Life insurance premium revenue
Outwards reinsurance expense
Fee revenue
Investment revenue
Net fair gains/(losses) on financial assets at fair
value
Net revenue and income
Claims expense
Reinsurance recoveries
Change in life insurance policy liabilities
Change in life investment policy liabilities
Change in reinsurers’ share of life insurance liabilities
Other expenses
Profit for the financial year before income tax
Income tax (expense)/benefit
Net profit for the financial year from continuing
operations
Profit from discontinued operations
Total profit attributable to members of ClearView
Life Assurance Limited
Abbreviated statement of financial position
2022
Investments in financial assets
Policy liabilities ceded under reinsurance
Other assets
Total assets
Gross policy liabilities - Life insurance contracts
Gross policy liabilities - Investment insurance
contracts
Other liabilities
Total liabilities
Net assets
Shareholder’s retained profits/(losses)
Opening retained profits/(losses)
Operating profit
Capital transfer between funds
Shareholder’s retained profits/(losses)
Shareholder’s capital
Total equity
Shareholders
Fund
Statutory
Statutory
Statutory
Fund No.1
Fund No.2
Fund No.4
Total
ClearView Life Assurance Limited
$'000
—
—
—
1
$'000
299,621
(115,423)
—
5,070
Australian Non-Participating
$'000
—
—
10
1
$'000
$'000
— 299,621
— (115,423)
10
—
5,127
55
—
(12,794)
1
176,474
— (173,264)
128,042
—
78,727
—
—
—
(57,040)
—
— (128,780)
1
—
1
—
1
24,159
(7,248)
16,911
—
16,911
—
11
—
—
—
65
—
(8)
68
4
72
—
72
— (12,794)
55
176,541
— (173,264)
— 128,042
78,727
—
—
65
— (57,040)
— (128,788)
55
—
24,283
(7,244)
55
586
17,039
586
641
17,625
Shareholders
Fund
Statutory
Statutory
Statutory
Fund No.1
Fund No.2
Fund No.4
Total
ClearView Life Assurance Limited
Australian Non-Participating
$'000
$'000
— 385,088
26,367
—
111,850
935
935
523,305
— (10,676)
—
544
544
391
(73,092)
1
—
(73,091)
73,482
391
—
75,866
65,190
458,115
264,249
16,911
—
281,160
176,955
458,115
$'000
796
—
1,746
2,542
—
647
1,099
1,746
796
525
71
—
596
200
796
$'000
1,292,462
—
17,637
1,310,099
—
1,294,731
5,284
1,300,015
10,084
7,842
642
—
8,484
1,600
10,084
$'000
1,678,346
26,367
132,168
1,836,881
(10,676)
1,295,378
82,793
1,367,495
469,386
199,524
17,625
—
217,149
252,237
469,386
130
ClearView Annual Report 2023
Notes to the Financial Statements 5. Life insurance and investment contracts continued
5.3 Sources of profit
Components of profit related to movements in life insurance
liabilities
Planned profit margins released
Profit arising from difference between actual investment income
and expected interest on policy liabilities
Profit arising from difference between actual and expected experience1
Impact of change in economic assumptions
Life insurance
Components of profit related to movements in life investment
liabilities
Profit arising from life investment contracts1
Life investment
Profit for the statutory funds
Profit for the shareholders fund
Profit for ClearView Life Assurance Limited
1
Includes costs considered unusual to the ordinary activities relevant to the segment.
Consolidated
Company
2023
$'000
2022
$'000
2023
$'000
2022
$'000
20,629
23,032
12,911
(895)
(9,147)
23,498
(1,556)
(1,556)
21,942
4
21,946
(6,982)
(669)
1,531
16,912
713
713
17,625
—
17,625
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
ClearView Wealth Limited
131
Notes to the Financial Statements 5. Life insurance and investment contracts continued
5.4 Policy liabilities
Reconciliation of movements in policy liabilities
Consolidated
2022
$'000
2023
$'000
Company
2022
$'000
2023
$'000
Life investment policy liabilities
Opening gross life investment policy liabilities
(Decrease)/increase in life investment policy liabilities reflected in
the income statement
Decrease in life investment policy liabilities due to management fee
reflected in the income statement
Life investment policy contributions recognised in policy liabilities
Life investment policy withdrawals recognised in policy liabilities
Reclassification to liabilities directly associated with assets held for
sale (see section 8.5(d))
Closing gross life investment policy liabilities
Life insurance policy liabilities
Opening gross life insurance policy liabilities
Movement in outstanding claims reserves
Increase/(decrease) in life insurance policy liabilities reflected in the
income statement
Closing gross life insurance policy liabilities
Total gross policy liabilities
Reinsurers’ share of life insurance policy liabilities
Opening reinsurers' share of life insurance policy liabilities
Movement in outstanding reinsurance
(Increase)/decrease in reinsurance assets reflected in the income
statement
Movement in reinsurer’s share of incurred claims liability1
Closing reinsurers’ share of life insurance policy liabilities
Net policy liabilities at balance date
1,295,378
1,392,291
(115,327)
(57,569)
(11,849)
503,077
(325,816)
(17,836)
277,431
(298,939)
(1,345,138)
—
325 1,295,378
(10,676)
5,684
(2,135)
70,186
21,027
(78,727)
16,035
(10,676)
16,360 1,284,702
(26,367)
(11,609)
(70,621)
(55,047)
(23,083)
4,730
57,040
42,261
(56,329)
(39,969)
(26,367)
1,258,335
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1
ClearView entered into two incurred claims treaties with its main reinsurer Swiss Re Life and Health Australia (Swiss Re) for its lump sum and income protection
portfolios to manage its financial exposure to its reinsurer and address the concentration risk. Under the treaties, ClearView LifeSolutions and ClearChoice lump sum
and income protection claims are substantially settled on an earned premium and incurred claims basis.
Components of net life insurance policy liabilities
Future policy benefits
Future expenses and commissions
Less future revenues
Best estimate liability
Planned margins over future expenses
Net life insurance policy liabilities
2023
$'000
499,472
664,372
(1,513,184)
Consolidated
2022
$'000
472,127
611,062
(1,436,572)
(349,340)
309,046
(353,383)
316,340
(40,294)
(37,043)
Company
2022
$'000
—
2023
$'000
—
—
—
—
—
—
—
—
—
—
—
132
ClearView Annual Report 2023
Notes to the Financial Statements 5. Life insurance and investment contracts continued
Disclosures on asset restrictions, managed assets and trustee activities
Restrictions on assets
Investments held in the life statutory funds (Funds) can only be used within the restrictions imposed under the Life
Insurance Act 1995. The main restrictions are that the assets in a Fund can only be used to meet the liabilities and
expenses of that Fund, to acquire investments to further the business of the Fund or as a distribution when the capital
requirements are met for that Fund. The shareholder can only receive a distribution from a Fund if the capital adequacy
requirements continue to be met after the distribution.
5.5 Capital adequacy
ClearView Life Assurance Limited (ClearView Life) is subject to minimum capital regulatory capital requirements in
accordance with Australian Prudential Regulation Authority (APRA) Life Insurance Prudential Standards. ClearView Life
is required to maintain adequate capital against the risks associated with its business activities and measure its capital to
the ‘Prudential Capital Requirement’ (PCR).
ClearView Life has in place an Internal Capital Adequacy Assessment Process (ICAAP), approved by the Directors, to
ensure it maintains required levels of capital within each of its statutory and general funds. The capital adequacy position
at balance date for ClearView Life, in accordance with the APRA requirements, is as follows:
Capital position
Statutory
Statutory
Statutory
fund No. 1
fund No. 2
fund No. 4
ClearView
Australian
Australian
Australian
Life
Shareholder’s
non-
non-
non-
Assurance
Fund
2023
$'000
393
—
participating
2023
$'000
458,669
—
participating
2023
$'000
580
—
participating
2023
$'000
9,744
(2,882)
Limited
2023
$'000
469,386
(2,882)
393
458,669
580
6,862
466,504
—
—
—
393
(3)
389
114.2
—
(3)
—
—
—
—
(3)
(2,120)
(386,924)
30,000
99,624
(18,576)
81,048
5.4
—
(5,724)
—
(10,399)
—
(2,453)
(18,576)
—
—
—
580
(7)
573
79.2
—
(7)
—
(1)
—
—
(7)
(68)
—
—
6,793
(3,444)
3,350
2.0
—
(81)
—
(3,363)
—
—
(2,188)
(386,924)
30,000
107,391
(22,031)
85,360
4.9
—
(5,815)
—
(13,763)
—
(2,453)
(3,444)
(22,031)
Net Assets (Common Equity Tier 1 Capital)
Intangibles adjustments1
Net tangible assets after intangible
adjustments
Capital base adjustments
Deferred tax assets
Deferred acquisition costs
Tier 2 capital
Regulatory capital base
Prescribed Capital Amount (PCA)
Available Enterprise Capital (AEC)
Capital Adequacy Multiple
Prescribed capital amount comprises of:
Insurance Risk
Asset Risk
Asset Concentration Risk
Operational Risk
Aggregation Benefit
Combined Stress Scenario Adjustment
Prescribed Capital Amount
1
Intangible adjustments relate to capitalised software.
ClearView Wealth Limited
133
Notes to the Financial Statements 5. Life insurance and investment contracts continued
Statutory
Statutory
Statutory
fund No. 1
fund No. 2
fund No. 4
ClearView
Australian
Australian
Australian
Life
Shareholder’s
non-
non-
non-
Assurance
Fund
2022
$'000
389
—
participating
2022
$'000
458,116
(14,112)
participating
2022
$'000
797
—
participating
2022
$'000
10,083
(2,729)
Limited
2022
$'000
469,386
(16,841)
389
444,004
797
7,354
452,545
—
—
—
389
(3)
386
113.8
—
(3)
—
—
—
(3)
(895)
(370,886)
30,000
102,223
(27,062)
75,161
3.8
(14,358)
(6,755)
—
(10,015)
4,067
(27,061)
—
—
—
797
(10)
787
80.1
—
(8)
—
(2)
—
(80)
—
—
7,274
(3,393)
3,881
2.1
—
(95)
—
(3,298)
—
(975)
(370,886)
30,000
110,684
(30,468)
80,216
3.6
(14,358)
(6,862)
—
(13,315)
4,067
(10)
(3,393)
(30,468)
Net Assets (Common Equity Tier 1 Capital)
Intangibles adjustments1
Net tangible assets after intangible
adjustments
Capital base adjustments
Deferred tax assets
Deferred acquisition costs
Tier 2 capital
Regulatory capital base
Prescribed Capital Amount (PCA)
Available Enterprise Capital (AEC)
Capital Adequacy Multiple
Prescribed capital amount comprises of:
Insurance Risk
Asset Risk
Asset Concentration Risk
Operational Risk
Aggregation Benefit
Prescribed Capital Amount
1
Intangible adjustments relate to capitalised software.
5.6 Actuarial methods and assumptions
Actuarial methods and assumptions
The effective date of the actuarial valuation report on life insurance policy liabilities and life investment policy liabilities is
30 June 2023. The actuarial valuation report was prepared by the ClearView Life Appointed Actuary, Ashutosh Bhalerao.
The actuarial report indicates that the Appointed Actuary is satisfied as to the accuracy of the data upon which the
policy liabilities have been determined.
The methods used for the major product groups as at 30 June 2023 and 30 June 2022 are as follows:
Related Product Group
Method
Profit
carrier
Fund 1 Non-Advice Lump
Sum (including the Old
Book)
Fund 1 LifeSolutions and
ClearChoice Lump Sum
Fund 1 LifeSolutions and
ClearChoice Income
Protection
Fund 2 Investments
Fund 4 Investments
Projection
Premiums
Projection
Premiums
Projection
Premiums
Accumulation n/a
Accumulation n/a
134
ClearView Annual Report 2023
Notes to the Financial Statements 5. Life insurance and investment contracts continued
The projection method uses the discounted value of future
assumptions have been updated at 30 June 2023 to take
policy cash flows (premiums, expenses and claims) plus a
into account recent observed experience.
reserve for expected future profits. The policy liabilities for
life investment contracts are determined as the fair value
of the policyholders’ accounts under the accumulation
method with no future profit reserve.
a) Actuarial assumptions used in the valuation of
life insurance policy liabilities
COVID-19: Whilst there is a significant level of uncertainty
and limited data, there is an expectation of higher income
protection related claims with respect to Long-COVID. This
short term elevation in claims is allowed for in the reported
best estimate liability and present value of future profit
margins. See section 1 (j) for further details.
Key assumptions used in the calculations of life insurance
b) Effects of changes in actuarial assumptions
policy liabilities are as follows:
Discount rates: Discount rates are based on a yield curve
derived from Commonwealth Government bond market
yields as at the valuation date, plus an adjustment for
illiquidity premium which is based on a formula driven
by the difference between these yields and an A-rated
non-financial corporate bond for the first ten years, and
20 basis points thereafter. This results in the average
effective discount rate of 4.53% per annum (2022: 3.85%
per annum).
Acquisition expenses: Per policy acquisition expense
assumptions were based on the actual acquisition
expenses incurred for the 12 months to 30 June 2023.
Maintenance expense and inflation: The per policy
maintenance expense assumptions were based on the
longer term per policy unit costs implied by ClearView
Life’s 2024 business plan. The long-term expense inflation
rate was increased to 2.4% per annum in this financial year,
relative to 2.3% per annum in 2022.
Lapses: Rates adopted vary by product, duration, age,
commission type and premium frequency, and have been
based on an analysis of ClearView Life’s experience over
recent years with allowance for expected trends. The best
estimate lapse assumptions have been updated to reflect
ClearView’s recent observed experience.
Mortality: Rates adopted vary by product, age, gender,
and smoking status. The primary underlying mortality
tables used are the latest FSC-KPMG ALS 2014-2018
industry standard tables, which were adjusted for industry
experience subject to ClearView’s own experience. The
mortality claims assumptions have been updated to take
into account recent observed experience.
Morbidity (TPD, Income Protection and Trauma): Rates
adopted vary by age, gender, and smoking status. The
primary underlying morbidity table used is the FSC-KPMG
ADI 2014-2018 table, based on 2014 to 2018 experience.
These tables were adjusted for industry experience
and ClearView’s own experience. The morbidity claims
Effect on
profit margins
Increase/
(decrease)
$'000
Effect on
policy
liabilities
Increase/
(decrease)
$'000
(10,182)
—
(2,746)
(213)
(13,141)
(32,264)
—
(1,888)
3,814
(30,338)
12,960
—
—
3,919
16,879
(2,188)
—
—
6,510
4,322
Assumption category
2023
Discount rates and
inflation
Maintenance expenses
Lapses
Mortality and morbidity
Total
2022
Discount rates and
inflation
Maintenance expenses
Lapses
morbidity
Total
c) Processes used to select assumptions
Discount rate
Benefits under life insurance contracts are not
contractually linked to the performance of the assets
held. As a result, the life insurance policy liabilities are
discounted for the time value of money using discount
rates that are based on current observable, objective rates
that relate to the nature, structure and term of the future
obligations. The discount rate is based on Commonwealth
Government bond rates adjusted for the value of the
illiquidity of the policy liability. The effect of this approach
is unchanged from that adopted last valuation.
Maintenance expenses and inflation
Maintenance expenses are set having regard to the cost
base in the three year Board adopted business plan. Per
policy maintenance expenses are assumed to increase in
the future with inflation, at a rate that allows for basic price
increases (CPI).
ClearView Wealth Limited
135
Notes to the Financial Statements 5. Life insurance and investment contracts continued
Acquisition expenses
Per policy acquisition expenses were derived from the analysis of acquisition expenses adopted for this financial report.
Taxation
It has been assumed that current tax legislation and rates continue unaltered.
Mortality and morbidity
Appropriate base tables of mortality and morbidity are chosen for the type of products written. An investigation into the
actual experience of the insurance portfolio over recent years is performed annually and ClearView Life’s mortality and
morbidity experience is compared against the rates.
In the base tables, where the data is sufficient to be fully statistically credible, the base table is adjusted to reflect the
portfolio’s experience. Where data is insufficient to be fully statistically credible, the base table is adjusted having regard
to the extent of the credibility of the portfolio’s experience, the overall experience of the industry and advice from
ClearView’s reinsurers.
Lapse
An investigation into the actual lapse experience of ClearView Life over the most recent years is performed and statistical
methods are used to determine appropriate lapse rates. An allowance is then made for any trends in the data as well as
industry experience to arrive at a best estimate of future lapse rates.
d) Sensitivity analysis
ClearView Life conducts sensitivity analyses to quantify the exposure to risk of changes in the key underlying variables
such as discount rates, expenses, mortality, morbidity and lapses. The valuations included in the reported results and
ClearView Life’s best estimate of future performance are calculated using certain assumptions about these variables.
The movement in any key variable may impact the reported performance and net assets of ClearView Life and the
consolidated entity and as such represents a risk.
Variable
Interest Rate
Risk
Expense Risk
Mortality Rates
Impact of movement in underlying variable
The life insurance policy liabilities are calculated using a discount rate that is derived from
market interest rates. Changes in market interest rates will affect the present value of cash
flows and profit margins in the policy liabilities, which in turn will affect the profit and
shareholder equity. The change in interest rates would also impact the emerging profit via its
impact on the investment returns on the assets held to back the liabilities.
An increase in the level (or inflation) of expenses over the assumed levels will decrease
emerging profit. However, a change in the base expense assumptions adopted for the policy
liability is unlikely to impact the current policy liability determination as such a change is
absorbed into the policy liability profit margin reserve in the first instance.
For life insurance contracts providing death benefits an increased rate of mortality would lead
to higher levels of claims, increasing associated claims cost and thereby reducing emerging
profit. However, a change in the mortality assumptions adopted for the policy liability is
unlikely to directly impact the current policy liability determination as such a change is
absorbed into the policy liability profit margin reserve in the first instance.
Morbidity Rates The cost of claims under TPD, Income Protection and trauma cover depends on the incidence
of policyholders becoming disabled or suffering a ‘trauma’ event such as a heart attack or
stroke. Higher incidence or claims duration would increase claim costs, thereby reducing profit
and shareholder equity. Similar to mortality above, a change in the morbidity assumptions
is absorbed in the policy liability profit margin in the first instance. For policyholders who
are currently on claim there is no profit margin. Therefore, any change in claims costs due to
a change in expectation around claims duration is reflected through a change in the policy
liability.
Lapse risk represents the extent to which policyholders choose not to renew their policy, and
allow it to lapse. An increase in the lapse rates will have a negative effect on emerging profit
owing to the loss of future revenue, including that required to recover acquisition costs. The
impact on the policy liability of a change in lapse assumptions is as per mortality above.
ClearView Annual Report 2023
Lapses
136
Notes to the Financial Statements 5. Life insurance and investment contracts continued
The table below illustrates how outcomes during the financial year in respect of the key actuarial variables, would have
impacted the reported life insurance policy liabilities, profit and equity for that financial year.
Variable
2023
Interest rates
Mortality and morbidity
Lapses
Maintenance expenses
2022
Interest rates
Mortality and morbidity
Lapses
Maintenance expenses
Change in
variable
Impact on policy liabilities
Net of
reinsurance
$'000
Gross of
reinsurance
$'000
Impact on net profit and
shareholder equity
Net of
reinsurance
$'000
Gross of
reinsurance
$'000
+ 100 bp
- 100 bp
110.0%
90.0%
110.0%
90.0%
110.0%
90.0%
+ 100 bp
- 100 bp
110.0%
90.0%
110.0%
90.0%
110.0%
90.0%
18,448
(20,468)
—
—
—
—
—
—
25,706
(24,226)
—
—
—
—
—
—
15,753
(17,375)
—
—
—
—
—
—
21,438
(20,204)
—
—
—
—
—
—
(12,613)
13,911
(10,860)
10,860
(3,270)
3,270
(3,094)
3,094
(17,994)
16,958
(10,936)
10,936
(3,144)
3,144
(2,789)
2,789
(11,027)
12,162
(2,929)
2,929
(2,888)
2,888
(3,094)
3,094
(15,007)
14,143
(3,039)
3,039
(2,631)
2,631
(2,789)
2,789
*
Note: The interest rate sensitivities show the change to policy liabilities and profit from a change in the discount rate by adding or subtracting 1% from the yield curve
adopted. The other sensitivities show how different the policy liabilities and reported profit would have been if ClearView Life’s experience in the current year in
relation to those variables had been higher or lower by 10% of that experienced.
ClearView Wealth Limited
137
Notes to the Financial Statements 5. Life insurance and investment contracts continued
5.7 Critical accounting
judgements and key sources
of estimation uncertainty
Life insurance policy liabilities
Life insurance policy liabilities are, in the majority of
cases, determined using an individual policy-by-policy
calculation. Where material liabilities are not determined
by individual policy valuation, they are computed using
statistical or mathematical methods, which are expected
to give approximately the same results as if an individual
Assets arising from reinsurance contracts
Assets arising from reinsurance contracts are computed
using the same methods as used for insurance policy
liabilities. In addition, the recoverability of these assets is
assessed on a periodic basis to ensure that the balance is
reflective of the amounts that will ultimately be received,
taking into consideration factors such as reinsurer
counterparty and credit risk.
Impairment is recognised where there is objective
evidence that the Group may not receive amounts due to
it and these amounts can be reliably measured.
liability were calculated for each contract. The calculations
are made by suitably qualified personnel on the basis of
COVID-19
recognised actuarial methods, with due regard to relevant
In response to COVID-19 the Group undertook a review
actuarial principles. The methodology takes into account
of best estimate assumptions, with a particular focus on
the risks and uncertainties of the particular classes of life
claims and lapses to determine impacts and implications
from COVID-19. ClearView has made an estimation on the
likely implications of COVID-19 at 30 June 2023. Refer to
section 1 (j) for further details.
insurance business written.
The key factors that affect the estimation of these
liabilities and related assets are:
• The cost of providing benefits and administering these
insurance contracts;
• The costs incurred in acquiring the policies, including
commissions, underwriting and policy issue costs;
• Mortality and morbidity experience on life insurance
products;
• Board approved premium rate changes; and
• Discontinuance experience, which affects ClearView
Life’s ability to recover the cost of acquiring new
business over the term of the contracts.
In addition, factors such as regulation, competition,
interest rates, taxes, securities market conditions and
general economic conditions affect the level of these
liabilities.
138
ClearView Annual Report 2023
Notes to the Financial Statements 6. Capital structure and capital risk management
This section provides information in relation to the Group’s capital structure and
financing facilities
140 6.1 Issued capital
141 6.2 Movements in reserves
142 6.3 Shares granted under the
142 6.4 Subordinated debt
143 6.5 Borrowings
143 6.6 Capital risk management
executive share plan
ClearView Wealth Limited
139
Notes to the Financial Statements 6. Capital structure and capital risk management
6.1
Issued capital
2023
Balance at the beginning of the financial year
Transfer from share based payment reserve and
cancellation of forfeited ESP shares1
Balance at the end of the financial year
2022
Balance at the beginning of the financial year
Shares issued during the year (ESP exercised)
Transfer from share based payment reserve and
cancellation of forfeited ESP shares1
Transfer from General Reserve2
Balance at the end of the financial year
Executive share plan
Balance at the beginning of the financial year
Shares forfeited during the year3
Shares exercised during the year
Balance at the end of the financial year
No. of
ordinary
shares Issued capital
Treasury
shares
Total share
capital
642,905,216
$’000
469,062
$’000
(2,407)
$’000
466,655
—
188
—
188
642,905,216
469,250
(2,407)
466,843
631,202,448
11,702,768
449,855
9,648
(2,407)
—
447,448
9,648
—
—
5,580
3,979
—
—
5,580
3,979
642,905,216
469,062
(2,407)
466,655
Company
2023
2022
No. of Shares No. of Shares
18,133,432
38,154,662
(1,500,000)
(8,318,462)
—
(11,702,768)
16,633,432
18,133,432
1
2
ESP reserve of the forfeited and cancelled shares were transferred to share capital.
The general reserve comprises the profit on sale of forfeited ESP shares ($4 million) where the shares were sold via an off market transfer with the proceeds being
received by the Company. The general reserve is not an item of other comprehensive income and the items in the general reserve will not be reclassified subsequently
to profit or loss. The general reserve was transferred to share capital in FY22
3 At 30 June 2023, 1.5 million forfeited ESP shares were in the process of being bought back and cancelled..
In accordance with AASB 2, Share-Based Payments the shares issued under the Executive Share Plan are treated as
options and are accounted for as set out in section 7.2.
The Company does not have a limited amount of authorised capital and issued shares do not have a par value. Fully paid
ordinary shares carry one vote per share and carry the rights to dividends.
Treasury shares held in trust
To satisfy obligations under the Group’s share-based remuneration plans, shares have been bought on market and are
held in a Trust controlled by ClearView. The shares are measured at cost and are presented as a deduction from Group
equity. No gain or loss is recognised in profit or loss on the sale, cancellation or reissue of the shares. The shares are
derecognised as treasury shares held in trust when the shares vest or are released to the participant. The total number
of treasury shares held is 2,783,324 (30 June 2022: 2,783,324 shares) with a value of $2,406,598 (30 June 2022:
$2,406,598) at an average price per share of $0.86 (30 June 2022: $0.86).
140
ClearView Annual Report 2023
Notes to the Financial Statements 6. Capital structure and capital risk management continued
Share issue due to ESP exercise and ESP forfeiture
Following the sale of the financial advice business to Centrepoint Alliance, 800,000 ESP shares that have vesting
conditions related to change of control constraints vested on completion of the transaction on 1 November 2021. During
the extension period to 31 March 2022 (where the ESP loans extension was granted), 11.7 million ESP shares were
exercised and the non-recourse loans of $6.3 million were fully repaid. Upon repayment of the loans, the holding lock was
removed from the ordinary shares issued. 8.2 million shares that were not exercised were forfeited. These forfeited shares
were subsequently bought back and cancelled in April 2022.
In FY23, following the departure of an employee (former Executive), 1.5 million ESP shares that were not exercised have
been forfeited. These forfeited shares were in the process of being bought back and cancelled at 30 June 2023.
6.2 Movements in reserves
Retained earnings/(losses)
Balance at the beginning of the financial year
Net profit/(loss) attributable to members of the
parent entity
Transfer to profit reserve
Dividend paid during the year
Balance at the end of the financial year
Share based payments reserve1
Balance at the beginning of the financial year
Recognition of share based payments
Transfer from accrued employee entitlements2
ESP loans settled through dividend
ESP shares vested and exercised
ESP shares vested/(forfeited)
Balance at the end of the financial year
Profit reserve
Balance at the beginning of the financial year
Transfer from retained earnings
Dividend paid during the year
Balance at the end of the financial year
General reserve3
Balance at the beginning of the financial year
Transfer to issued capital
Balance at the end of the financial year
Consolidated
2022
$'000
2023
$'000
2023
$'000
Company
2022
$'000
7,881
(6,611)
(111,647)
(111,647)
17,108
—
(13,220)
11,769
6,562
(166)
435
199
—
(338)
6,692
21,175
—
(6,683)
7,881
14,617
434
351
208
(3,112)
(5,936)
6,562
Consolidated
2022
$'000
2023
$'000
—
—
—
—
—
—
—
—
—
—
—
3,979
(3,979)
—
18,371
(18,371)
—
8,424
(8,424)
—
(111,647)
(111,647)
4,155
(166)
435
199
—
(338)
4,285
2023
$'000
21,015
18,371
(13,220)
26,166
—
—
—
12,210
434
351
208
(3,112)
(5,936)
4,155
Company
2022
$'000
19,274
8,424
(6,683)
21,015
3,979
(3,979)
—
1
The above share based payments reserve relates to share options granted by the Company to employee and contractor participants under the share based payment
arrangements. Further information is set out in section 7.2.
2 Restricted rights issued relating to Deferred Short Term Variable Remuneration (STVR).
3
The general reserve comprises the profit on sale of forfeited ESP shares ($4 million) where the shares were sold via an off market transfer with the proceeds being
received by the Company. The general reserve is not an item of other comprehensive income and the items in the general reserve will not be reclassified subsequently
to profit or loss. The general reserve was transferred to share capital in FY22.
ClearView Wealth Limited
141
Notes to the Financial Statements 6. Capital structure and capital risk management continued
6.3 Shares granted under the executive share plan
In accordance with the provisions of the ESP, as at 30 June 2023, key management have acquired 16,633,432 (30 June
2022: 18,133,432) ordinary shares (excluding 1,500,000 forfeited shares). Shares granted under the ESP carry rights to
dividends and voting rights.
Financial assistance amounting to $11,765,742 (30 June 2022: $12,872,422) was made available to executives and senior
employees to fund the acquisition of shares under the ESP.
During the year, no performance rights issued to executives were vested (2022: nil).
6.4 Subordinated debt
On 5 November 2020, the Company issued $75 million subordinated, unsecured notes (‘the Notes’) to wholesale
investors. The Notes are unsecured, subordinated debt obligations of the Company. Interest on the Notes accrues at
a variable rate equal to the three-month Bank Bill Swap Rate (‘BBSW’) plus a margin of 6% per annum, until maturity,
payable quarterly in arrears. Interest expense recognised for the year ended was $6.6 million (2022: $4.7 million). The
maturity date of the subordinated debt is 5 November 2030.
Subject to APRA’s prior written approval and certain other conditions, the Notes are callable from November 2025 or if
certain tax or regulatory events occur.
The Company capitalised directly attributable costs associated with the issuance of the subordinated debt, which totalled
$1.7 million and was incurred in FY21. These costs are amortised on a straight line basis of 5 years, being the lesser of the
maturity date and the call date. Amortisation of these costs recognised for the year ended was $0.3 million (2022: $0.3
million)
For the year ended 30 June 2023, total subordinated debt is as follows:
Balance at the beginning of the financial year
Amortisation of capitalised costs
Balance at the end of the financial year
Consolidated
2022
$'000
73,514
343
73,857
2023
$'000
73,857
343
74,200
2023
$'000
73,857
343
74,200
Company
2022
$'000
73,514
343
73,857
The Company has used $30 million of the proceeds of the Notes for regulatory capital purposes for ClearView Life
Assurance Limited. The remainder of the proceeds was used by ClearView to repay existing debt and to cover associated
costs.
The Subordinated Notes may convert into Ordinary Shares of ClearView on the occurrence of a Non-Viability Trigger
Event. The number of Ordinary Shares issued on Conversion is variable but is limited to the Maximum Conversion
Number. The Maximum Conversion Number is 147,058 Ordinary Shares per Subordinated Note, based on the Issue Date
VWAP of $0.34.
142
ClearView Annual Report 2023
Notes to the Financial Statements 6. Capital structure and capital risk management continued
6.5 Borrowings
Financing Facilities
The Group has access to the following facilities:
Bank Guarantees
– amount used
Overdraft and credit
– amount used
– amount unused
Bank Facility
– amount used
– amount unused
Consolidated
2022
$'000
2023
$'000
2023
$'000
Company
2022
$'000
4,028
4,028
—
2,000
—
2,000
—
—
—
—
—
—
16,000
44,000
16,000
44,000
16,000
44,000
16,000
44,000
As at the reporting date, the Company had a $60 million
Australia Bank at a benchmark interest rate of 10.47% p.a
facility agreement with the National Australia Bank. $16
(2022: 7.72% p.a) calculated daily. Any overdrawn balance
million has been drawn down with the balance available
in excess of the overdraft will incur an additional margin
for immediate use (30 June 2022: $16 million). The
of 1.5% p.a (2022: 1.5% p.a) above the benchmark interest
facility agreement was amended on 5 June 2023 and the
rate. The bank overdraft is short-term in nature and was
facility is repayable on 1 August 2026. Interest on the loan
unutilised at 30 June 2023 and 30 June 2022. There is an
accrues at BBSY plus a margin of 0.95% per annum (FY22
additional $0.25 million credit card facility with National
and prior to June 2023: 0.80%), and is payable quarterly.
Australia Bank in the name of ClearView Administration
Furthermore, a line fee of 0.75% per annum (FY22 and
Services Pty Limited.
prior to June 2023: 0.80%) is payable on the facility on a
quarterly basis.
6.6 Capital risk management
The covenants of the facility agreement state that the
Group’s debt must not exceed 35% of the Group’s
total debt and equity, the Group’s interest cover ratio
(EBITDA (excluding policyholder net profit and removing
any effects from the adoption of AASB 16) to interest
expense) for the preceding 12 months period must be at
least 3 times.
Furthermore, under the facility agreement, a review
event occurs where the capital base of the life company,
ClearView Life, falls below the minimum PCA ratio of
1.5 times (excluding any supervisory adjustments and
reinsurance concentration risk charges). Based on the
results to 30 June 2023, ClearView has been operating
within its covenants under the terms of the Facility
Agreement. The Group has not identified any breaches
at 30 June 2023 nor at the time at which these financial
The Group maintains capital to protect customers,
creditors and shareholders against unexpected losses to
a level that is consistent with the Group’s risk appetite.
The Group’s capital structure consists of ordinary equity
comprising issued capital, retained earnings and reserves
(as detailed in section 6.2).
ClearView generates positive cash flows from in-force
portfolios which is subsequently reinvested into new
business generation.
The forecast capital generation (and related net capital
position) in the FY24 Business Plan allows for increased
new business generation and market share over the
forecast period, the interest costs associated with the Tier
2 capital raising and the material investment in the new
PAS over the multi year transformation period.
statements were authorised for issue. The facility has been
The net surplus capital position of the Group above
secured by a number of cross guarantees, refer to section
internal benchmarks of $27.5 million at 30 June 2023 is
9.5 for detail.
ClearView Life Assurance Limited has a $2 million (30
June 2022: $2 million) overdraft facility with National
stated prior to the declaration of the FY23 final dividend
and any capital release from the exit of the wealth
management business.
ClearView Wealth Limited
143
Notes to the Financial Statements 6. Capital structure and capital risk management continued
The surplus capital position and future business capital
• Maximise the use of its franking account by paying fully
generation is anticipated to fund the net capital
franked dividends; and
expenditure impacts of the investment in the new PAS
(relative to the quantum that could be permissible to be
counted for capital purposes). ClearView also has access to
the Debt Funding Facility, to the extent further funding is
required.
• Seek transparent communication to the market around
Embedded Value estimation and its relationship to the
prevailing share price.
A FY22 fully franked final cash dividend of 2 cents per
share was paid in September 2022 and represented an
ClearView has implemented an incurred claims treaty with
increase of 100% on the prior year.
Swiss Re for lump sum and income protection business,
where claims (including reserve components) are paid
when a claim is incurred which reduces the concentration
risk exposure. There is no Asset Concentration Risk charge
under LPS 117 relating to the Swiss Re exposure as at 30
June 2023.
A FY23 fully franked final cash dividend of 3 cents per
share has been declared on 23 August 2023, with a record
date of 7 September 2023 (FY23 dividend is payable on
22 September 2023). This represents an increase of 50%
on the prior year and a dividend yield of 6.2% based on a
90 day VWAP share price at 30 June 2023 of $0.483 per
As previously reported, the $70 million irrevocable letter of
share. The FY23 payout ratio is 54% of Underlying NPAT,
credit with a major Australian bank on behalf of Swiss Re
the mid point of the target payout ratio.
has been reinstated effective from 30 June 2022 to further
reduce any likelihood of concentration risk exposure.
The payment of an interim (and a final dividend) from
FY24 is under consideration (coupled with a reinstatement
Fitch assigned ClearView a Long-term Issuer Default
of the dividend reinvestment plan). Furthermore, it is
Rating (IDR) of ‘BBB’. At the same time, Fitch assigned
ClearView’s operating subsidiary, ClearView Life, an Insurer
intended that the target payout ratio of 40%-60% will
be reviewed post completion of the IT transformation
Financial Strength Rating (IFS) of BBB+. The outlooks for
both ratings are stable and were reaffirmed as ‘stable’.
investment and wealth management exit, to reflect the
shift in the underlying business to a cash generation
Dividends and On-market 10/12
limit share buyback
position.
10/12 limit on market buy back
The Board seeks to pay dividends at sustainable levels
ClearView does not currently have a Board approved
with a target payout ratio of between 40% and 60%
10/12 limit on market buy-back program in place. The
of Underlying NPAT1. The dividend policy has been set
current share buy-back program expired on 19 December
(subject to available profits and financial position) to
2022, and no shares were bought back and cancelled
consider regulatory requirements and available capital
under the program in the year ended 30 June 2023. Since
within the Group.
The annual dividend program was reinstated from FY21
after a period of rebuilding and reinvestment into the
business.
ClearView’s ability to pay a franked dividend depends upon
factors including its profitability, the availability of franking
credits and its funding requirements which in turn may
January 2014, the total number of shares bought back and
cancelled under the scheme was 1,208,824.
Employee buy-back of Executive Share Plan
shares
There was no buy-back of Executive Share Plan (ESP)
shares from employee participants in the year ended 30
be affected by trading and general economic conditions,
June 20232 (30 June 2022: 6,671,737 ESP shares from
business growth and regulation.
Contractor Participants and 1,646,725 ESP shares from
The Board continues to seek to:
• Pay dividends at sustainable levels;
Employee Participants were bought back and cancelled).
1
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 activities. Includes amortisation of capitalised software and leases, underlying investment income and interest costs associated with
corporate debt and Tier 2 Capital. Costs associated with the incurred claims treaty are reflected as part of reinsurance costs. Excludes the equity accounted earnings
of Centrepoint Alliance.
2
1.5 million forfeited ESP shares from an employee participant is in the process of being bought back and cancelled.
144
ClearView Annual Report 2023
Notes to the Financial Statements 7. Employee Disclosures
This section provides information on the remuneration of key management
personnel and the Group’s employee share plan
146 7.1 key management personnel
146 7.2 Share based payments
compensation
ClearView Wealth Limited
145
Notes to the Financial Statements 7. Employee disclosures
7.1 Key management personnel compensation
Transactions with KMP
Key management personnel compensation
Details of Key Management Personnel compensation are disclosed in the Directors’ Report on pages 9 to 75 of the
Annual Report. The aggregate compensation made to Key Management Personnel (KMP) of the Company and the
Group is set out below:
Short-term employee benefits
Post-employment benefits
Share based payments1
Termination benefits
Total
2023
$
5,695,277
352,646
323,722
262,281
Consolidated
2022
$
5,875,993
388,078
796,509
395,300
6,633,926
7,455,880
1
In FY23, the FY20 LTIP reserve was reversed due to the non-market performance conditions not being met.
Non-recourse loans
Non-recourse loans were granted to KMP ESP participants in May 2017. This non-recourse loan facility is secured by the
ESP shares held and became interest bearing from 30 November 2017 at 3 month BBSY rate plus a margin of 1%. This
non-recourse facility is reflected as loans on balance sheet of the listed entity.
In accordance with AASB 9, an expected credit loss (ECL) of $0.7 million (30 June 2022: $1.0 million) was recognised
against the non-recourse loans given the decrease in ClearView’s share price subsequent to the issue of the loans. The
loans were granted up to a maximum of $1 per vested ESP share held.
7.2 Share based payments
Share based payment arrangements
Share-based payment transactions
Equity-settled share-based payments to employees and others providing similar services are measured at the fair value
of the equity instruments at the grant date. The Company issues shares from time to time under the ClearView Rights
Plan (the Plan) and previously under the ClearView Long Term Incentive Plan (LTIP) and the Executive Shares Plan (ESP).
The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line
basis over the vesting period, based on the Group’s estimate of equity instruments that will eventually vest, with a
corresponding increase in equity. At the end of each reporting period, the Group revises its estimate of the number of
equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognised in profit
or loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to the equity-
settled employee benefits reserve.
Equity-settled share-based payment transactions with parties other than employees are measured at the fair value of the
goods or services received, except where that fair value cannot be estimated reliably, in which case they are measured at
the fair value of the equity instruments granted, measured at the date the entity obtains the goods or the counterparty
renders the service.
146
ClearView Annual Report 2023
Notes to the Financial Statements 7. Employee disclosures continued
Share schemes
A summary of deferred equity award plans for employees is set out below:
Plan
Short Term Variable
Remuneration Plan (STVR)
(From 1 July 2020)
Available to
Managing Director
and executives
Nature of the award
60% delivered by cash.
40% deferred as
restricted rights to fully
paid ordinary shares.
Long Term Variable
Remuneration Plan (LTVR)
(From 1 July 2020)
Managing Director
and executives
Performance rights to
fully paid ordinary shares
Vesting conditions
The restricted rights are deferred to vest on
the fourth anniversary of the award.
STVR outcomes are subject to the
achievement of ClearView goals and financial
performance as well as risk management
targets.
On achievement of the performance
measures at the end of a four-year
performance period, 100% of the
performance rights vest.
Vesting is subject to the achievement of
ClearView Group’s total shareholder return,
embedded value (for FY23 LTVR) and
compliance targets.
Long Term Incentive Plan
(LTIP) (2017 - 2020)
Managing Director
and senior
management team
Performance rights to
fully paid ordinary shares
The performance rights are subject to a
deferral period of 3 years.
LTIP outcomes are subject to the
achievement of ClearView Group
performance targets.
Executive Share Plan (ESP)
(Prior to 30 June 2017)
Managing Director,
senior management
team and key senior
employees
Fully paid ordinary shares
subject to holding lock
with non-recourse loans
provided as financial
assistance
No ESP shares have been granted since
14 June 2017. The plan includes a clause
governing the consequences of a change of
control event and the shares under the ESP
share plan will vest.
The ESP awards are not conditional on
meeting performance targets.
1
The Plan rules provide suitable discretion for the Remuneration Committee to adjust any formulaic outcome to ensure that awards under the STVR and LTVR
appropriately reflect performance.
2 Recipients must remain in the Group’s service throughout the service period (or the specified service period under the ESP) in order for the award to vest, except in
cases approved by the Remuneration Committee. Vesting is also subject to malus provisions.
3 Once vested, performance rights can be exercised for no consideration.
Performance and restricted rights
Details of the number of employee entitlements to performance rights under the Plan (LTVR and LTIP) and restricted
rights (deferred component of the STVR) to ordinary shares granted, vested and transferred to employees and
forfeited during the year are as follows:
Balance at the beginning of the financial year
Granted
Forfeited
Balance at the end of the financial year1
Weighted average share price at date of vesting of performance rights
during the year
Weighted average fair value of performance rights granted during the
year
Weighted average fair value of restricted rights granted during the
year
1
Balance at end of the financial year does not include the financial year’s deferred STVR component.
No. of rights
2023
9,915,447
4,059,757
(2,560,399)
11,414,805
n/a
$0.29
$0.74
2022
5,449,207
4,628,267
(162,027)
9,915,447
n/a
$0.20
$0.50
ClearView Wealth Limited
147
Notes to the Financial Statements 7. Employee disclosures continued
Fair value of performance and restricted rights
The fair value of performance rights granted during the year was determined using the following key inputs and
assumptions:
Performance rights
Share price at grant date
Exercise price
Volatility
Dividend yield
Anticipated performance right life (years)
Present value of future expected dividends
Fair value at grant date - Market conditions
Fair value at grant date - Non-market performance conditions
Restricted rights
Fair value at grant date
2023 2
$0.48
Nil
46.5%
7.02%
3.44
0.087
$0.19
$0.39
2023
$0.74
2022 1
$0.50
Nil
50.0%
5.48%
4
n/a
$0.20
n/a
2022
$0.50
1
2
The 2022 target is based on an Absolute Total Shareholder Return (TSR) from 1 July 2021 to 30 June 2025. A Monte Carlo simulation methodology has been selected.
The 2023 target is based on a TSR from 1 July 2022 to 30 June 2026 for 50% performance rights and an Embedded Value (EV) as at 30 June 2026 for 50%
performance rights. A Monte Carlo simulation methodology has been selected for the fair value of the TSR rights. The fair value of the EV rights was calculated as the
value of the ordinary shares in ClearView on the grant date less the present value of the expected dividends over the expected terms of the rights.
The fair value is determined using appropriate methods including Monte Carlo simulations, share price less present value
of dividend, depending on the vesting conditions. Some of the input or assumptions used may be based on historical
data which is not necessarily indicative of future trends.
The fair value of restricted rights granted during the year was determined based on the fair value of the Company’s
shares at the grant date or for the deferred component of the STVR, at the end of the previous financial year.
Executive Share Plan
Details of the number of ESP shares granted, vested and transferred, and forfeited during the year are as follows:
Balance at the beginning of the financial year
Forfeited during the year
Exercised during the year
Balance at the end of the financial year
2023
Weighted
average
exercise price
$
0.71
1.09
0.56
2022
Weighted
average
exercise price
$
0.65
0.96
0.54
Number of
shares
38,154,662
(8,318,462)
(11,702,768)
0.71
18,133,432
0.71
Number of
shares
18,133,432
(1,500,000)
—
16,633,432
The shares were priced using a binomial option pricing model with volatility based on the historical volatility of the
share price.
Share based payment expense
Total expenses arising from share based payment awards under the various share schemes including LTVR, LTIP, and
ESP amounted to -$0.2 million (2022: $0.4 million) mainly due to the reversal of FY20 LTIP reserve as a result of non-
market performance conditions not being met, of which no amount (2022: $0.06 million) is included in the results of
discontinued operations. STVR deferred component (restricted rights) expense of $0.5 million is included in employee
expenses.
148
ClearView Annual Report 2023
Notes to the Financial Statements 8. Related parties and other Group entities
This section provides information on the Group’s structure and how it affects
the financial position and performance of the Group as a whole. In particular,
there is information about:
subsidiaries
150 8.1 Equity interests in
151 8.2 Investment in associate
152 8.3 Transactions between
155 8.4 Investment in controlled
155 8.5 Discontinued operations
the Group and its related
parties
units trusts
ClearView Wealth Limited
149
Notes to the Financial Statements 8. Related parties and other Group entities
8.1 Equity interests in subsidiaries
Details of the percentage of ordinary shares held in subsidiaries.
Name of Entity
Parent entity
ClearView Wealth Limited (CWL)
Subsidiaries
ClearView Group Holdings Pty Limited
(CGHPL)
ClearView Life Assurance Limited (CLAL)
ClearView Financial Management Limited
(CFML)
ClearView Life Nominees Pty Limited
(CLNPL)
ClearView Administration Services Pty
Limited (CASPL)
ClearView Employee Share Trust (CVEST)
Matrix Planning Investments Pty Limited
(MPIPL)1
Affiliate Financial Planning Pty Limited
(AFPPL)1
Interest in associates2
Centrepoint Alliance Limited
Principal Activity
Parent
Entity
Country of
incorporation
Ownership interest
2022
%
2023
%
Holding
Company
—
Australia
Holding
Company
Life Company
Responsible
Entity
Trustee
Administration
Service Entity
Trustee
CWL
Australia
CGHPL
Australia
CWL
Australia
CWL
CWL
Australia
Australia
CWL
Australia
Non operating
CASPL
Australia
Non operating
CASPL
Australia
100
100
100
100
100
100
—
—
100
100
100
100
100
100
100
100
Advice
Company
CWL
Australia
24.38
24.50
1 On 3 August 2022, MPIPL and AFPPL were deregistered with ASIC.
2 Refer to Section 8.2 Investment in associate for further details.
150
ClearView Annual Report 2023
Notes to the Financial Statements 8. Related parties and other Group entities continued
Name of Entity
Controlled unit trusts
CVW Index Fixed Interest Fund
CVW Schroder Equity Opportunities Fund
CVW Fixed Interest Fund
CVW Index International Shares Fund
CVW Money Market Fund
CVW First Sentier Investors Infrastructure
Fund
CVW ClearBridge RARE Emerging Markets
Fund
CVW Antipodes Global Fund
CVW Hyperion Australian Shares Fund
CVW Index Infrastructure and Property
Fund
CVW Index Emerging Markets Fund
CVW Index Australian Shares Fund
CVW Aoris International SRI Fund
(previously CVW Stewart Investors
Worldwide Sustainability Fund)
CVW Fairlight Global Fund
Principal Activity
Parent
Entity
Country of
incorporation
Ownership interest
2022
%
2023
%
Wholesale Fund CLAL
Wholesale Fund CLAL
Wholesale Fund CLAL
Wholesale Fund CLAL
Wholesale Fund CLAL
Australia
Australia
Australia
Australia
Australia
Wholesale Fund CLAL
Australia
Wholesale Fund CLAL
Australia
Wholesale Fund CLAL
Wholesale Fund CLAL
Australia
Australia
Wholesale Fund CLAL
Australia
Wholesale Fund CLAL
Wholesale Fund CLAL
Wholesale Fund CLAL
Australia
Australia
Australia
Wholesale Fund CLAL
Australia
97
42
55
93
92
28
32
33
100
90
95
92
42
51
96
38
52
92
90
26
31
30
100
90
94
92
38
50
CASPL was incorporated to centralise the administrative responsibilities of the Group which includes being the employer
of all staff within the Group. CASPL recoups all expenditure by virtue of a management fee from the various group
companies and operates on a cost recovery basis (in accordance with an inter group agreement).
CWL is regulated as a Non-Operating and Holding Company by the Australian Prudential Regulation Authority (APRA)
under the Life Insurance Act 1995, and via its subsidiaries, holds an APRA life insurance licence (CLAL), and APRA
registrable superannuation entity (RSE) licence (CLN) and an ASIC funds manager responsible entity (RE) licence
(CFML).
The consolidation of the unit trusts regardless of the percentage of CLAL’s ownership interest is based on the Company’s
power over the relevant activities of the unit trusts (CFML is the responsible entity of the unit trusts) and the significance
of its exposure to variable returns of the unit trusts (CLAL is a unit holder and significantly exposed to variable returns of
investment performance of the unit trusts).
8.2 Investment in associate
On 1 November 2021 the Company acquired a strategic 24.5% stake (48 million shares) in Centrepoint Alliance as part
of the sale of its financial advice businesses to Centrepoint Alliance (refer to section 8.5 for detail). The 48 million shares
were restricted for dealing for 12 months since the date of issuance of the shares. As a result, the Company gained
significant influence over the investee and this investment is accounted for using the equity method.
As at the acquisition date, the investment in associate is recognised at cost being the fair value of 48 million shares of
Centrepoint Alliance.
ClearView assesses, at each reporting date, whether there is any objective evidence of impairment. If there is an
indication that an investment may be impaired, then the entire carrying amount of the investment in associate is tested
for impairment by comparing the recoverable amount (higher of value in use and fair value less disposal costs) with the
carrying amount. Impairment losses recognised in the income statement are subsequently reversed through the income
statement if there has been a change in the estimates used to determine recoverable amount since the impairment loss
ClearView Wealth Limited
151
Notes to the Financial Statements 8. Related parties and other Group entities continued
was recognised. As at 30 June 2023, $1.6 million of impairment was recognised to the carrying value of the investment in
associate (30 June 2022: nil). The recoverable amount of the investment in associate was determined based on various
data points from a number of external sources and ClearView’s internal valuation models.
During the year the carrying amount of the investment in associate has changed as follows:
Balance at the beginning of the year
Additions
Profit for the period1
Dividend received
Impairment
Balance at the end of the year
1
In FY23, the profit for the period includes $1.1m FY22 tax benefit true-up.
Consolidated
2022
$'000
—
13,440
534
(240)
—
2023
$'000
13,734
—
2,264
(960)
(1,598)
Company
2022
$'000
—
13,440
534
(240)
—
2023
$'000
13,734
—
2,264
(960)
(1,598)
13,440
13,734
13,440
13,734
8.3 Transactions between the Group and its related parties
Other related parties include:
• Entities with significant influence over the Group;
• Associates; and
• Subsidiaries.
Balances and transactions between the Company and its subsidiaries, which are related parties of the Company, have
been eliminated on consolidation.
Details of balances between the Group and other related parties during the financial year ended 30 June 2023 are
outlined below.
The ultimate parent entity in the Group is ClearView Wealth Limited which is incorporated in Australia.
152
ClearView Annual Report 2023
Notes to the Financial Statements 8. Related parties and other Group entities continued
Outstanding balances between the Group and its related parties
ClearView
Wealth
Limited
ClearView
Life
Assurance
Limited
ClearView
Financial
Management
Limited
ClearView
Admin Services
Pty Limited
ClearView
Life
Nominees
Pty Limited
ClearView
Retirement
Plan
CFML
Managed
Investment
Schemes
2023
ClearView Wealth Limited
$
—
$
6,091,362
$
(486,480)
$
2,541,524
$
35,673
ClearView Life Assurance Limited
(6,091,362)
—
(18,473)
(8,509,998)
ClearView Financial Management Limited
486,480
18,473
—
(43,432)
ClearView Admin Services Pty Limited
(2,541,524)
8,509,998
43,432
ClearView Life Nominees Pty Limited
(35,673)
—
ClearView Retirement Plan
CFML Managed Investment Schemes
73
—
(393,212)
—
(515,485)
—
—
—
—
—
—
—
—
—
—
—
—
$
(73)
393,212
$
—
—
Total
$
8,182,006
(14,226,621)
—
—
—
—
—
515,485
977,006
—
—
—
—
6,011,906
(35,673)
(393,139)
(515,485)
Total
(8,182,006)
14,226,621
(977,006)
(6,011,906)
35,673
393,139
515,485
—
ClearView
Wealth
Limited
$
—
2022
ClearView Wealth Limited
ClearView Life Assurance
ClearView
Life
Assurance
Limited
ClearView
Financial
Management
Limited
ClearView
Admin
Services Pty
Limited
ClearView
Life
Nominees
Pty Limited
ClearView
Retirement
Plan
CFML
Managed
Investment
Schemes
$
$
$
$
$
7,119,620
(192,479)
2,367,403
427,103
2,912,716
Limited
(7,119,620)
—
96,294
(8,330,489)
— 1,048,988
ClearView Financial
Management Limited
ClearView Admin Services
192,479
(96,294)
—
(881,317)
(395,284)
Pty Limited
(2,367,403)
8,330,489
881,317
ClearView Life Nominees
Pty Limited
(427,103)
—
395,284
ClearView Retirement Plan
(2,912,716)
(1,048,988)
—
CFML Managed Investment
Schemes
—
Centrepoint Alliance Limited
(151,701)
—
—
(601,250)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Centrepoint
Alliance
Limited
$
Total
$
151,701
12,786,064
— (14,304,827)
—
—
—
—
—
—
(579,166)
6,844,403
(31,819)
(3,961,704)
(601,250)
(151,701)
$
—
—
601,250
—
—
—
—
—
Total
(12,786,064)
14,304,827
579,166
(6,844,403)
31,819
3,961,704
601,250
151,701
—
ClearView Wealth Limited
153
Notes to the Financial Statements 8. Related parties and other Group entities continued
Related party tax assets
As at 30 June 2023 the ClearView Group carried a non-current receivable of $0.4 million (30 June 2022: $3.9 million)
from its related superfund ClearView Retirement Plan (CRP). This is after a write down of $0.3 million in the current year
in respect of the FY22 income tax year (2022: $0.9 million for the FY21 income tax year) driven by the reduction of the
carried forward losses in CRP against its net current pension exempt income in the respective year. A provision of $0.4
million (30 June 2022: $0.6 million) was fully provided for the receivable.
Related party transactions with associates
During the year, ClearView has continued to transact with Centrepoint Alliance’s financial advice businesses. The
aggregate amounts included in the determination of profit before tax that resulted from key transactions with
Centrepoint Alliance are:
• Risk commission paid $6.3 million (2022: $4.3 million); and
• Fees paid for adviser services $4.7 million (2022: $4.5 million).
Other transactions between the Group and associate entities consisted of directors fees received for Simon Swanson’s
directorship held in Centrepoint Alliance and fees paid for financial advice business model costs.
All these transactions are on a normal commercial basis.
Subordinated debt
On 5 November 2020, the Company issued $75 million subordinated, unsecured notes to wholesale investors (external
notes). These are unsecured, subordinated debt obligations of the Company. Interest accrues at a variable rate equal
to the three-month Bank Bill Swap Rate (‘BBSW’) plus a margin of 6% per annum, until maturity, payable quarterly
in arrears. Interest expense recognised for the year was $6.6 million (2022: $4.7 million). Concurrently, the Company
utilised $30 million of the proceeds to issue subordinated notes to its wholly owned subsidiary ClearView Life Assurance
Limited for regulatory capital purposes (internal notes). Interest accrues at a variable rate equal to the three-month Bank
Bill Swap Rate (‘BBSW’) plus a margin of 6% per annum, until maturity, payable quarterly in arrears. Interest income
recognised for the year was $2.7 million (2022: $1.9 million). The internal notes and associated interest is eliminated in the
Group’s consolidated financial statements.
Other related party transactions
Directors fees were paid to Crescent Capital Partners Pty Limited the manager of the parent entity’s majority shareholder
CCP Bidco Pty Limited.
A director held 100 subordinated notes during the year and the notes are issued on the same terms and conditions
available to other note holders.
Transactions other than financial instrument transactions
No Director has entered into a material contract with the Company or the ClearView Group since the end of the previous
financial year and there were no material contracts involving Directors’ interests existing at year end. Other transactions
with directors, executives and their related parties are conducted on arm’s length terms and conditions, and are deemed
trivial or domestic in nature. These transactions are in the nature of personal investment, life insurance policies and
superannuation.
154
ClearView Annual Report 2023
Notes to the Financial Statements 8. Related parties and other Group entities continued
8.4
Investment in controlled unit trusts
Consolidated 2023
Consolidated 2022
Name
Controlled unit trusts
CVW Index Fixed Interest Fund
CVW Schroder Equity Opportunities Fund
CVW Fixed Interest Fund
CVW Index International Shares Fund
CVW Money Market Fund
CVW First Sentier Investors Infrastructure Fund
CVW ClearBridge RARE Emerging Markets Fund
CVW Antipodes Global Fund
CVW Hyperion Australian Shares Fund
CVW Index Infrastructure and Property Fund
CVW Index Emerging Markets Fund
CVW Index Australian Shares Fund
CVW Aoris International SRI Fund (previously CVW Stewart
Investors Worldwide Sustainability Fund)
CVW Fairlight Global Fund
Total
In which:
Assets held for sale (see section 8.5(d))
Investments
Type
$'000
%
$'000
Debt
Equities
Debt
Equities
Debt
Property
Equities
Equities
Equities
Property
Equities
Equities
Equities
Equities
200,573
52,138
198,477
251,867
145,970
20,511
16,792
38,265
17,397
98,174
41,756
189,864
34,302
39,700
1,345,786
1,344,646
1,140
97
42
55
93
92
28
32
33
100
90
95
92
42
51
197,742
48,597
213,425
217,620
146,441
22,119
22,743
40,499
15,111
90,719
38,613
167,805
33,401
38,422
1,293,257
—
1,293,257
%
96
38
52
92
90
26
31
30
100
90
94
92
38
50
8.5 Discontinued operations
On 25 August 2021, ClearView announced sale of its Financial Advice business, following a strategic review in this
segment to seek out and pursue inorganic opportunities to accelerate its path to scale. The businesses were sold on 1
November 2021 to Centrepoint Alliance, in exchange for $3.2 million in cash (subject to a net asset adjustment) and the
acquisition of a strategic 24.5% stake in Centrepoint Alliance. The acquisition of a strategic stake in Centrepoint Alliance
allowed ClearView to participate in the financial advice industry consolidation but at the same time separate the product
manufacturer and advice arms of its business.
As previously announced to the market, the Board initiated a strategic review in the Wealth Management segment to
seek out and pursue opportunities to reset and simplify the business with the ambition of retaining its core focus on
being a life risk insurance provider. The Board is committed to the exit of the Wealth Management business given its lack
of scale and limited growth options.
ClearView entered into a share sale agreement (on 22 February 2023) for the sale of CFML to Human Financial, subject
to the completion of certain conditions precedent.
The superannuation fund trustee, ClearView Life Nominees Pty Limited is, at the same time, considering a number
of options and the best way forward for the superannuation fund, ClearView Retirement Plan. The outcome of these
considerations will inform the roadmap and timing for the overall exit of the Wealth Management business.
Post exit of the Wealth Management business, ClearView will be a simplified and less complex business with a focus on
life insurance. However, given the trustee considerations, the timing remains uncertain but is expected to be within the
FY24 financial year.
ClearView Wealth Limited
155
Notes to the Financial Statements 8. Related parties and other Group entities continued
In accordance with AASB 5 Non-Current Assets Held for Sale and Discontinued Operations, the Wealth Management
segment meets the criteria to be classified as held for sale in the consolidated financial statements for the year ended 30
June 2023.
The Wealth Management business was not previously classified as held-for-sale or as discontinued operations. The
comparative consolidated statement of profit or loss and other comprehensive income has been re-presented to show
the discontinued operations separately from continuing operations.
The financial information reflecting the discontinued operations is as follows:
Consolidated
2022
$'000
2023
$'000
2023
$'000
Company
2022
$'000
a) Results of discontinued operations
Revenue
Expenses
Profit/(loss) before income tax
Income tax (expense)/benefit
Loss for the period from discontinued operations
Gain on sale of discontinued operations after income
tax (see c) below)
(Loss)/profit from discontinued operations
attributable to equity holders of the parent
Earnings per share from discontinued operations
Basic (cent per share)
Diluted (cent per share)
225,619
(221,711)
3,908
(7,748)
(3,840)
256,778
(261,009)
(4,231)
2,273
(1,958)
—
11,736
(3,840)
9,778
(0.60)
(0.60)
1.54
1.54
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Consolidated
2022
$'000
2023
$'000
2023
$'000
Company
2022
$'000
b) Cash flows from discontinued operations
Net cash generated by operating activities
Net cash generated/(utilised) by investing activities
Net cash (utilised) by financing activities
Net cash flows for the period from discontinued
operations
22,107
140,301
(159,394)
258,360
(136,425)
(119,372)
3,014
2,563
c) Details of sale of discontinued operations
Consideration received:
Cash
Investment in Centrepoint Alliance
Total disposal consideration
Carrying amount of net assets sold
Net asset adjustments1
Matrix brand sold
Transaction costs2
Gain on sale before income tax
Income tax benefit on gain
Gain on sale after income tax
—
—
—
—
—
—
—
—
—
—
3,170
13,440
16,610
(3,582)
152
(200)
(1,717)
11,263
473
11,736
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1 Net asset adjustments was finalised and completed in 2H FY22.
2
Includes shared redundancy, legal, employee, consultancy and other costs associated with the sale of the financial advice businesses.
156
ClearView Annual Report 2023
Notes to the Financial Statements 8. Related parties and other Group entities continued
At the time of the sale the fair value of the investment in Centrepoint Alliance was determined to be $13.4 million (48
million shares at 28 cents per share) and was recognised as investment in associate (refer to section 8.2).
The carrying amounts of assets and liabilities as at the date of sale of the Financial Advice (1 November 2021) were:
Cash and cash equivalent
Receivables
Deferred tax assets
Total assets
Payables
Provisions
Total liabilities
Net assets
d) Assets and liabilities classified as
held for sale
Assets
Cash and cash equivalent
Investments
Receivables
Deferred tax assets
Goodwill
Intangible assets
Assets held for sale
Liabilities
Payables
Life investment policy liabilities
Liability to non-controlling interest in
controlled unit trusts
Liabilities directly associated with
assets held for sale
Net assets directly associated with
disposal group1
1 November
2021
$'000
3,290
794
15
4,099
161
356
517
3,582
Company
2022
$'000
—
—
—
—
—
—
—
—
—
—
—
—
Consolidated
Note
2023
$'000
2022
$'000
2023
$'000
3.3
4.1
4.1
5.4
44,331
1,868,598
2,297
285
8,500
2,882
1,926,893
6,285
1,345,138
557,485
1,908,908
17,985
—
—
—
—
—
—
—
—
—
—
—
—
—
11,956
—
—
—
—
11,956
—
—
—
—
11,956
1
Includes a pre-completion dividend which will not result in the CFML’s net tangible assets being less than $5.0 million following the declaration or payment. As at 30
June 2023, the CFML’s net tangible assets are $6.6 million.
ClearView Wealth Limited
157
Notes to the Financial Statements 8. Related parties and other Group entities continued
Recognition and measurement
A discontinued operation is a component of the Group that has been disposed of or is classified as held for sale and
that represents a separate major line of business. The results of discontinued operations are presented separately in
the statement of profit or loss.
Non-current assets (or disposal groups) are classified as held for sale if their carrying amount will be recovered
principally through a sale transaction rather than through continuing use and a sale is considered highly probable. They
are measured at the lower of their carrying amount and fair value less costs to sell, except for assets such as deferred
tax assets, assets arising from employee benefits, financial assets and contractual rights under insurance contracts,
which are specifically exempt from this requirement. Assets and liabilities classified as held for sale are presented
separately in the balance sheet.
An impairment loss is recognised for any initial or subsequent write-down of the asset (or disposal group) to fair
value less costs to sell. A gain is recognised for any subsequent increases in fair value less costs to sell of an asset
(or disposal group), but not in excess of any cumulative impairment loss previously recognised. A gain or loss not
previously recognised by the date of the sale of the non-current asset (or disposal group) is recognised at the date of
derecognition. No impairment loss was recognised for the assets held for sale as at 30 June 2023.
Non-current assets (including those that are part of a disposal group) are not depreciated or amortised while they are
classified as held for sale. Interest and other expenses attributable to the liabilities of a disposal group classified as held
for sale continue to be recognised.
158
ClearView Annual Report 2023
Notes to the Financial Statements 9. Other disclosures
This section provides information on the Group’s structure and how it affects
the financial position and performance of the Group as a whole. In particular,
there is information about:
contingent assets
Statement of cash flows
160 9.1 Notes to the Consolidated
160 9.2 Contingent liabilities and
161 9.3 Leases
163 9.4 Capital commitments
163 9.5 Guarantees
164 9.6 New accounting standards
166 9.7 Subsequent events
ClearView Wealth Limited
159
Notes to the Financial Statements 9. Other disclosures
9.1 Notes to the Consolidated statement of cash flows
Net profit/(loss) for the year
Fair value (gains)/losses on financial assets at fair value
through profit and loss
Amortisation and depreciation
Employee share plan expense
Other non operating expenses/cash items
Subordinated debt interest expense
Profit from sale of subsidiaries
Movement in provision
Movements in liabilities to non-controlling interest in
controlled unit trust
Decrease/(increase) in receivables and capitalised costs
Decrease/(increase) in deferred tax asset
Increase/(decrease) in payables
Increase/(decrease) in policy liabilities
(Decrease)/increase in deferred tax liability
Increase/(decrease) in current tax liability
Net cash generated/(utilised) by operating activities1
Consolidated
Company
2023
$'000
17,108
(115,893)
6,408
(166)
(15,730)
6,635
—
2,278
88,128
2,926
4,372
7,836
46,833
(21)
11,125
61,839
2022
$'000
21,175
208,888
6,084
376
3,982
4,714
(11,263)
(888)
(26,264)
1,949
(5,089)
4,962
118,600
(1,861)
4,397
329,762
2023
$'000
18,371
—
—
—
(15,309)
—
—
10
—
3,715
171
(900)
—
(79)
11,125
17,104
2022
$'000
8,424
—
—
—
(36)
—
—
—
—
(8,780)
394
736
—
(70)
4,397
5,065
1
Includes net cash generated by operating activities from continuing and discontinued operations.
Cash and cash equivalents
Cash comprises cash on hand and demand deposits. Cash equivalents are short-term, highly liquid investments that are
readily convertible to known amounts of cash, which are subject to an insignificant risk of changes in value.
9.2 Contingent liabilities and contingent assets
There may be outstanding claims and potential claims against the ClearView Group in the ordinary course of business.
Furthermore, ClearView Group may be exposed to contingent risks and liabilities arising from the conduct of its business
including contracts that involve providing contingent commitments such as warranties, indemnities or guarantees.
The ClearView Group does not consider the outcome of any such claims known to exist at the date of this report, either
individually or in aggregate is likely to have a material effect on its operations or financial position. The Directors are of
the opinion that provisions are not required in respect of these matters, as it is not probable that a future sacrifice of
economic benefits will be required or the amount is not capable of reliable measurement.
Certain subsidiaries act as trustee for various trusts. In this capacity, the subsidiaries are liable for the debts of the trusts
and are entitled to be indemnified out of the trust’s assets for all liabilities incurred on behalf of the trusts.
In the ordinary course of business, certain ClearView subsidiaries enter into various types of investment contracts that
can give rise to contingent liabilities. It is not expected that any significant liability will arise from these transactions as
any losses or gains are offset by corresponding gains or losses on the underlying exposure.
160
ClearView Annual Report 2023
Notes to the Financial Statements 9. Other disclosures continued
Industry and regulatory compliance
investigations
Other
The Company has guaranteed the obligations of one
ClearView is subject to review from time to time by
of its subsidiaries in respect of employee entitlements
regulators. ClearView’s principal regulators are APRA,
of employees who were previously employed by MBF
ASIC and AUSTRAC, although other government agencies
Holding Pty Limited (Bupa Australia).
may have jurisdiction depending on the circumstances.
The reviews and investigations conducted by regulators
may be industry-wide or specific to ClearView and the
outcomes of those reviews and investigations can vary
and may lead, for example, to enforcement actions
and the imposition of charges, penalties, variations or
restrictions to licences, the compensation of customers,
enforceable undertakings or recommendations and
directions.
Letter of credit
The Company in the ordinary course of business has
provided a letter of financial support to its subsidiary
ClearView Administration Services, the centralised
administration entity of the Group.
Other than the above, the Directors are not aware of any
other contingent liabilities in the Group at the year end.
9.3 Leases
The main type of right of use asset recognised by the
Group relates to property leases.
ClearView was the beneficiary of a $70 million irrevocable
The Group has elected not to recognise a right-of-use
letter of credit issued by Australia and New Zealand
Banking Group Limited (ANZ) on behalf of Swiss Re Life
and Health Australia (Swiss Re). As a result of entering
into the new income protection incurred claims treaty,
asset and corresponding lease liability for short-term
leases with terms of 12 months or less, leases that expire
within 12 months of initial application and leases of
low-value assets. Lease payments on these assets are
ClearView wound down the limits on the irrevocable letter
expensed to profit or loss as incurred.
of credit in FY21. Subsequently, the $70 million irrevocable
letter of credit has been reinstated effective from 30 June
Right-of-use assets
2022 to continue to support CLAL’s Asset Concentration
Risk Charge under APRA’s regulations. The letter of credit
is applied across both lump sum and income protection
incurred claims treaties with Swiss Re.
Off balance sheet items – ESP loans
A right-of-use asset is recognised at the commencement
date of a lease. The right-of-use asset is measured at cost,
which comprises the initial amount of the lease liability,
adjusted for, as applicable, any lease payments made at or
before the commencement date net of any lease incentive
received, any initial direct costs incurred, and an estimate
In accordance with the provisions of the ESP, as at
of costs expected to be incurred for dismantling and
30 June 2023, key management, members of the senior
removing the underlying asset, and restoring the site or
management team have acquired 16,633,432 (30 June
asset.
2022: 18,133,432) ordinary shares.
Right-of-use assets are depreciated on a straight-line
Shares granted under the ESP carry rights to dividends
basis over the lease term or the estimated useful life of the
and voting rights. Financial assistance amounting to
$11,765,742 (30 June 2022: $12,872,422) was made
available to these participants to fund the acquisition of
asset, whichever is the shorter. Where the consolidated
entity expects to obtain ownership of the leased asset
at the end of the lease term, the depreciation is over its
shares under the ESP, of which $9,040,738 (30 June 2022:
estimated useful life. Right- of-use assets are subject to
$10,918,893) is held as an off balance sheet receivable.
impairment or adjusted for any remeasurement of lease
Given the non-recourse nature of the loans and the
liabilities.
current CVW share price, the off balance sheet loan may
not be recoverable as at 30 June 2023.
ClearView Wealth Limited
161
Notes to the Financial Statements 9. Other disclosures continued
Lease liabilities
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the present
value of the lease payments to be made over the term of the lease, discounted using the interest rate implicit in the
lease or, if that rate cannot be readily determined, the Group’s incremental borrowing rate. Lease payments comprise of
fixed payments less any lease incentives receivable, variable lease payment that depend on an index or a rate, amounts
expected to be paid under residual value guarantees, exercise price of a purchase option when the exercise of the option
is reasonably certain to occur, and any anticipated termination penalties.
The variable lease payments that do not depend on an index or a rate are expensed in the period in which they are
incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are
remeasured if there is a change in the following: future lease payments arising from a change in an index or a rate
used; residual guarantee; lease term; certainty of a purchase option and termination penalties. When a lease liability is
remeasured, an adjustment is made to the corresponding right-of-use asset, or to profit or loss if the carrying amount of
the right-of-use asset is fully written down.
Amounts recognised in the balance sheet
The balance sheet shows the following amounts relating to leases:
Right-of-use assets
Buildings
Equipment
Total
Lease liabilities
Buildings
Equipment
Total
Consolidated
2022
$'000
2023
$'000
2023
$'000
Company
2022
$'000
7,804
35
7,839
8,562
36
8,598
10,338
118
10,456
11,039
121
11,160
—
—
—
—
—
—
—
—
—
—
Amounts recognised in the statement of profit or loss
The statement of profit or loss shows the following amounts relating to leases:
Depreciation of right-of-use assets
Impairment of right-of-use assets
Interest expense
Impairment
Consolidated
2022
$'000
3,079
1,175
224
2023
$'000
2,995
—
181
2023
$'000
—
—
—
Company
2022
$'000
—
—
—
During FY22, a floor of the Sydney Head office was vacant as a result of the sale of the financial advice businesses. The
vacancy is expected to last for 24 months before it is sub-let. In accordance with AASB 16, the right of use asset for this
lease was impaired. An impairment charge of $0.9 million for the right of use asset and a provision of $0.3 million for the
associated outgoing costs was recognised and presented as part of the discontinued operation for the year ended 30
June 2022.
162
ClearView Annual Report 2023
Notes to the Financial Statements 9. Other disclosures continued
Additions during the financial year
During the financial year, the Group signed a new property lease for the Melbourne office for a term of five years. The
impact of initial recognition of this lease is as follows:
Balance Sheet
Assets
Right of use asset
Total
Liabilities
Lease liability
Total
Consolidated
2022
$'000
2023
$'000
2023
$'000
Company
2022
$'000
441
441
426
426
—
—
—
—
—
—
—
—
—
—
—
—
9.4 Capital commitments
ClearView has committed to technology projects and service agreements to a value of $12.7 million. This predominantly
relates to the implementation and ongoing costs of a new integrated policy administration system and underwriting
rules engine ($10.8 million). Other commitments of $1.9 million include the infrastructure as a service agreement (service
fees) and the implementation of the AASB 17 sub-ledger solution. The following table outlines the expected cashflows in
relation to those commitments.
Year 1
$'000
4,291
1,152
5,443
Year 2
$'000
4,072
330
4,402
Year 3
$'000
1,768
293
2,061
Year 4
$'000
692
134
826
Consolidated
Year 5
$'000
—
—
—
Total
$'000
10,823
1,909
12,732
PAS/URE
Other commitments
Total
9.5 Guarantees
The facility entered into with the National Bank of Australia is guaranteed jointly and severally by:
• ClearView Group Holdings Pty Limited
ACN 107 325 388
• ClearView Administration Services Pty Limited
ACN 135 601 875
• ClearView Financial Management Limited1
ACN 067 544 549
The guarantees are supported by collateral (in the form of the shares) of the entities.
1
For CFML who holds an Australian Financial Services License (AFSL) the recovery granted from the guarantee is limited to the extent that it does not result in the
Company breaching its AFSL conditions.
ClearView Wealth Limited
163
Notes to the Financial Statements In November 2020, APRA released its discussion paper
Integrating AASB 17 into the capital and reporting
frameworks for insurers and updates to the LAGIC
framework which outlined their proposals to align,
where appropriate, its capital and reporting frameworks
with AASB 17. In December 2021, following industry
consultation and feedback on the discussion paper, APRA
released a pack containing its response and information
papers, and updated draft capital prudential and reporting
standards. APRA released the final capital prudential and
reporting standards in September 2022, and subsequently
made minor amendments to the finalised prudential and
reporting standards in June 2023.
Amongst other things, the key proposals and implications
in APRA’s AASB 17 requirements include:
• an effective date of 1 July 2023 for the APRA
requirements to apply, which for ClearView is aligned to
the effective date of AASB 17;
• more granular reporting to APRA (for example, the
stepped premium business will be split from non-
stepped premium business) of which a set of allocation
principles is provided that will be adopted to assist
with translating the AASB 17 level of aggregation to the
proposed APRA reporting groups; and
•
less alignment between APRA capital and AASB 17
financial reporting methodologies (for example, APRA
has maintained its long-term natural expiry contract
boundary requirement for all businesses, including the
yearly renewal term stepped business), leading to a
need to have dual reporting for AASB 17 and for APRA.
9. Other disclosures continued
9.6 New accounting standards
New and revised Australian Accounting Standards
and Interpretations affecting amounts reported
and/ or disclosures in the financial statements
There has been no new or amended Accounting Standards
and Interpretations issued by the Australian Accounting
Standards Board (‘AASB’) that are mandatory for the
current reporting period and significantly affect amounts
reported or disclosures in the financial statements.
New and revised Australian Accounting Standards
and Interpretations on issue but not yet effective
Standards and Interpretations on issue not yet
adopted
AASB 17, the new accounting standard for insurance
contracts, was adopted by the Australian Accounting
Standards Board in July 2017. The first applicable annual
reporting period for ClearView will be for the year ending
30 June 2024, with the comparative period for the year
ended 30 June 2023 and a restated opening Statement
of Financial Position as at 1 July 2023.
No other Australian Standards and Interpretations, which
are on issue but not yet effective, are expected to have
significant financial and disclosure impact on ClearView.
Impact of changes to Australian Accounting
Standards and interpretations on issue not yet
effective
AASB 17 Insurance Contracts
AASB 17 Insurance Contracts replaces AASB 4 Insurance
Contracts and AASB 1038 Life Insurance Contracts, and is
effective for ClearView from 1 July 2023. AASB 17 aims to
establish globally consistent principles for the recognition,
measurement, presentation and disclosure of insurance
contracts issued. Life investment contracts are currently
measured under the AASB 9 Financial Instruments
standard and will continue to be recognised under this
standard.
1
The Australian Taxation Office (ATO) has yet to provide any ruling on its AASB 17 impacts and, as such, ClearView has not been able to assess any tax-related impact.
164
ClearView Annual Report 2023
Notes to the Financial Statements 9. Other disclosures continued
Key areas of consideration and progress
AASB 17 will apply to all insurance and reinsurance
contracts in the ClearView Group and ClearView Life
Assurance Limited (ClearView Life).
The financial calculations and operational changes
relating to AASB 17 are highly complex. ClearView is well
progressed and work is ongoing to finalise impacts and
restate comparative information.
The relevant key areas of consideration for ClearView are
set out below.
• AASB 17 insurance and reinsurance contract liabilities
and assets will be restated upon transition at 1 July 2023
using one of three ‘transition approaches’ allowed under
the standard, namely the ‘full retrospective approach’
(FRA), the ‘modified retrospective approach’ (MRA)
and the ‘fair value approach’ (FVA). The FRA essentially
applies AASB 17 retrospectively for all historical financial
periods, and relies on all relevant inputs, systems and
models being practically available. If impracticability
of using FRA is demonstrated, the MRA or FVA can
be used, where a number of simplifications, such as
approximating key inputs, are allowable. ClearView is
applying a MRA for the majority of business where FRA
is impracticable and FVA for the remaining business.
• ClearView will apply the ‘general measurement
model’ (GMM) for recognition and measurement of all
insurance contracts and reinsurance contracts held.
• Changes to the level of aggregation, as AASB 17
requires that insurance contracts be pooled into
portfolios of insurance contracts (PICs) that have similar
risks and are managed together. For ClearView, the PICs
comprise business sold under ClearChoice (open to
new business), LifeSolutions (closed to new business)
and a group of older legacy non-advice based business
(closed to new business). The business will also be
split by stepped and non-stepped (level) premium and
lump sum and disability income. These portfolios will
be further separated into groups of insurance contracts
(GICs) split by profitability (or onerous) categories
and contain contracts issued no more than 12 months
apart (cohorts). AASB 17 also requires the unbundling
of underlying (gross) insurance contracts from their
related reinsurance contracts held. All things considered
these will be more granular than the current related
product groups under AASB 1038.
• The introduction of a risk adjustment for non-financial
risk (RA) which reflects the compensation that
ClearView requires for bearing the uncertainty in
relation to the amount and timing of cash flows. The
risk adjustment will imply a confidence level which will
need to be disclosed. ClearView will adopt a cost-of-
capital calculation to quantify the RA for both liability
for incurred claims and liability for remaining coverage.
• Although conceptually similar, the Contractual Service
Margin (CSM) requirement under AASB 17 recognises
profit on a different basis to the Margin on Services
(MoS) approach under AASB 1038, and therefore the
emergence of profit is likely to change for portfolios
with positive profit margins.
• Changes to the contract boundary, of which projected
cashflows are to be included, impacts a material
part of ClearView’s business. 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 applies to both the lump sum and
disability income business, and reflects the policyholder
renewal and repricing cycle. Shortening the contract
boundary will result in different patterns of profit
recognition compared to the current standards, where
asymmetries will exist between other underlying level
premium business and reinsurance contracts held.
• Due to the shorter contract boundary for YRT
ClearView recognises the directly attributable insurance
acquisition costs over longer term by utilising an asset
for insurance acquisition cash flows (AIACF) related to
future renewals of YRT business.
• Assets of reinsurance contracts held will be determined
separately to the gross underlying contract, and
may have different contract boundaries and profit
emergence.
The implementation of AASB 17 will result in a
considerable increase in data volume and data storage
requirements. Efficient and controlled processes are
important to ensure that ClearView meets the reporting
deadlines for both internal and external stakeholders as
well as providing quality business insights and data for
business decision-making.
To this end, ClearView has assessed its current state
and target state of operations including historical and
projected data, key economic and insurance assumptions,
and calculation and reporting models and are in the
process implementing new systems and reporting
processes to cater for the requirements of AASB 17 and
APRA reporting purposes.
ClearView Wealth Limited
165
Notes to the Financial Statements 9. Other disclosures continued
Implementation of an external vendor AASB 17 sub-
ledger system commenced in FY22. This system, along
with enhancements to other processes and models
are required to perform AASB 17 calculations, data
transformation and storage, analysis of results, and
production of required general ledger entries and
disclosures for financial accounts. ClearView continues
to progress its AASB 17 implementation program for
adoption on 1 July 2023.
AASB 17 is not expected to change the underlying
economics or cashflows of ClearView’s business, but
it is expected to have an impact on the timing of the
emergence of profits and retained earnings on adoption
of the accounting standard. It is expected that AASB 17
will result in decrease of between $40 million and $80
million in net assets (after tax impacts) for the restated
opening statement of financial position as at 1 July 2022.
ClearView expects to provide pro forma AASB 17
historical financials (for analysts and investors) in advance
of the 1H24 financial result.
9.7 Subsequent events
FY23 Final Dividend
A final fully franked FY23 cash dividend of 3 cents per
share or $19.8 million has been declared subsequent to
year end. This represents an increase of 50% on the prior
year. The FY23 payout ratio is 54% of Underlying NPAT,
the mid point of the target payout ratio.
Centerpoint Alliance dividend declaration
Subsequent to year end, Centerpoint Alliance has
declared a fully franked ordinary dividend of 2.0 cents
per share will be payable. The record date will be 15
September 2023 and the payment date will be 29
September 2023.
166
ClearView Annual Report 2023
Notes to the Financial Statements Directors’ Declaration
The Directors declare that:
a) In the Directors’ opinion, there are reasonable grounds to
believe that the Company will be able to pay its debts
as and when they become due and payable;
b) In the Directors’ opinion, the attached financial
statements and notes thereto are in accordance with
the Corporations Act 2001, including the compliance
with accounting standards and giving a true and fair
view of the financial position and the performance of
the Company and the consolidated entity;
c) In the Directors’ opinion, the financial statements and
notes thereto are in accordance with International
Financial Reporting Standards issued by the
International Accounting Standards Board as disclosed
in section 1 ; and
d) The Directors have been given the declarations required
by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of the Directors
made pursuant to section 295(5) of the Corporations Act
2001.
On behalf of the Directors
Mr Geoff Black
Chairman
22 August 2023
ClearView Wealth Limited
167
Independent Auditor’s
report
168
ClearView Annual Report 2023
Ernst & Young
200 George Street
Sydney NSW 2000 Australia
GPO Box 2646 Sydney NSW 2001
Tel: +61 2 9248 5555
Fax: +61 2 9248 5959
ey.com/au
Independent Auditor’s Report to the Members of ClearView Wealth Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of ClearView Wealth Limited (the Company) and its subsidiaries
(collectively the Group), which comprises:
► The Group consolidated and Company statements of financial position as at 30 June 2023;
► The Group consolidated and Company statements of comprehensive income, statements of
changes in equity and statements of cash flows for the year then ended;
► Notes to the financial statements, including a summary of significant accounting policies; and
► The directors’ declaration.
In our opinion, the accompanying financial report is in accordance with the Corporations Act 2001,
including:
a. Giving a true and fair view of the Company’s and the Group’s financial position as at 30 June 2023
and of their financial performance for the year ended on that date; and
b. Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial
report section of our report. We are independent of the Group in accordance with the auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (including Independence Standards) (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
ClearView Wealth Limited
169
Page 2
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial report of the current year. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide
a separate opinion on these matters. For each matter below, our description of how our audit
addressed the matter is provided in that context.
We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the
financial report section of our report, including in relation to these matters. Accordingly, our audit
included the performance of procedures designed to respond to our assessment of the risks of
material misstatement of the financial report. The results of our audit procedures, including the
procedures performed to address the matters below, provide the basis for our audit opinion on the
accompanying financial report.
1. Life Insurance Policy Liabilities
Financial report reference: Note 5
Why significant to the audit
How our audit addressed the key audit matter
The measurement and recognition of Life
Insurance Policy Liabilities entails complex
calculations involving large volumes of
policyholder data and judgement-based
assumptions.
Key assumptions used in the Group’s model to
determine the value of the Life insurance Policy
Liabilities include:
• Claims incidence and Termination Rates
• Lapse rates
• Discount rates
•
Inflation rate
• Maintenance expenses
These assumptions, along with policy
information, are used as inputs to the Group’s
model to calculate the Life Insurance Policy
Liabilities.
This is a key audit matter due to the degree of
judgement and estimation uncertainty
associated with the valuation.
-
Our audit procedures involved an assessment of
the effectiveness of relevant controls over
policy information used as inputs into the
Group’s model.
Our audit procedures included the following in
the evaluation of the assumptions used by the
Group:
• Assessed methodology and assumptions
used by the Group with a focus on
changes made since the prior year end
and associated governance procedures
in respect of those changes.
• Assessed the results of the experience
investigations carried out by the Group
to determine whether they supported
the assumptions used by the Group.
Our audit procedures included the following in
the evaluation and application of methodology in
the valuation:
• Assessed the changes made to actuarial
models and associated governance
procedures.
• Performed procedures over the analysis
of earnings for the period, with a focus
on large experience gains/losses and
any material unexplained items.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
170
ClearView Annual Report 2023
Page 3
Why significant to the audit
How our audit addressed the key audit matter
• Assessed the movements in modelled
profit margins and best estimate
liabilities.
• Assessed the impact of changes in
economic assumption on policy
liabilities.
Where appropriate, we involved our life
insurance actuarial specialists in the above
procedures and overall assessment of the
valuation methodology, key assumptions and
models deriving the valuation of the Life
Insurance Policy Liabilities.
We assessed the adequacy of the related
financial report disclosures.
2.
Intangible Capitalisation and Recoverability
Financial report reference: Note 4
Why significant to the audit
How our audit addressed the key audit matter
As at 30 June 2023 the Group’s intangible asset
balance totalled $24 million.
The recognition and measurement of intangible
assets is a key audit matter because of the
Group’s ongoing investment in a new policy
administration system and the judgment
required to:
• Recognise when costs incurred are
eligible for capitalisation in accordance
with AASB 138 Intangible Assets; and
• Assess the useful life of Information
Technology assets.
Our audit procedures included the following:
• Obtained an understanding the relevant
processes and controls relating to
capitalised costs.
• Assessed amounts capitalised for
significant projects against the
capitalisation requirements prescribed
by AASB 138 Intangible Assets.
• Assessed the Group’s assessment of
indicators of impairment in accordance
with AASB 136 Impairment of Assets.
• Assessed the appropriateness of the
useful lives applied to the IT assets.
• Assess the adequacy of the related
financial report disclosures.
A member firm of Ernst & Young Global Limited
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3. Recoverability of Goodwill
Financial report reference: Note 4
Why significant to the audit
How our audit addressed the key audit matter
As at 30 June 2023, the Group’s goodwill
balance totalled $4 million. This amount is
attributable solely to the Life Cash Generating
Unit (‘CGU’). The Goodwill attributed to the
Wealth Segment has been reclassified to assets
Held for Sale as at 30 June 2023 and totalled
$8.5 million.
An impairment assessment is performed at each
reporting period, comparing the carrying
amount of each CGU with its recoverable
amount. The recoverable amount of each CGU is
determined on a Value in Use basis. To support
the Value in Use calculation the Group performs
an Embedded Value which requires judgement in
determining the key assumptions which
underpin the expected future cash flows and the
utilisation of relevant assets.
This calculation incorporates a range of
assumptions including:
• Mortality and morbidity (Life CGU only)
•
Investment returns
• Discount rates
• Lapse rates
• Maintenance costs
This was a key audit matter due to the degree of
judgement and estimation uncertainty
associated with impairment assessment.
Our audit procedures included the following:
• Obtained an understanding of the
relevant controls relating to the Group’s
impairment assessment and the
preparation of the valuation models
used to assess the recoverable amount
of the Group’s CGUs.
• Assessed the identification of CGU’s and
allocation of goodwill and cash flows for
the purposes of assessing the value in
use of the CGU.
• Assessed if the non-economic
assumptions applied in the Embedded
Value model for the Life CGU were
consistent with those adopted for policy
liabilities as at 30 June 2023.
•
Involved our actuarial specialists in
assessing the methodology and
assumptions used in the Embedded
Value calculation, including comparison
to market benchmarks.
• Assessed cashflow forecasts against
those used in the policy liability cash
flow projections.
• Assessed sensitivity analysis on
management’s impairment assessment
to determine appropriate disclosure
within the financial statements, and to
consider if any foreseeable change in
assumption could lead to a material
impairment.
• Tested the mathematical accuracy of
the impairment model for each CGU.
Our actuarial specialists were involved in the
above procedures where appropriate.
We assessed the adequacy of the related
financial report disclosures.
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Page 5
Information other than the financial report and auditor’s report thereon
The directors are responsible for the other information. The other information comprises the
information included in the Company’s 2023 annual report but does not include the financial report
and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon, with the exception of the Remuneration Report
and our related assurance opinion.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the Company’s and
Group’s ability to continue as a going concern, disclosing, as applicable, matters relating to going
concern and using the going concern basis of accounting unless the directors either intend to liquidate
the Company or Group or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgment and maintain professional scepticism throughout the audit. We also:
►
Identify and assess the risks of material misstatement of the financial report, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
► Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company’s or the Group’s internal control.
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► Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
► Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Company’s or Group’s ability to
continue as a going concern. If we conclude that a material uncertainty exists, we are required to
draw attention in our auditor’s report to the related disclosures in the financial report or, if such
disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor’s report. However, future events or conditions
may cause the Company or the Group to cease to continue as a going concern.
► Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events
in a manner that achieves fair presentation.
► Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the financial report. We are
responsible for the direction, supervision and performance of the Group audit. We remain solely
responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, actions
taken to eliminate threats or safeguards applied.
From the matters communicated to the directors, we determine those matters that were of most
significance in the audit of the financial report of the current year and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
Report on the audit of the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 50 to 75 of the directors’ report for the
year ended 30 June 2023.
In our opinion, the Remuneration Report of ClearView Wealth Limited for the year ended 30 June
2023, complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
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Page 7
Ernst & Young
Louise Burns
Partner
Sydney
22 August 2023
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Shareholders’ and Note holders’
Information
As at 7 August 2023
Shareholders’ information disclosed below include ordinary issued shares as well as shares issued under the ESP as at 7
August 2023.
Substantial shareholding information
Substantial shareholders
CCP Bidco Pty Ltd and Associates1
Perpetual Corporate Trust Limited
Sony Life Insurance Co., Ltd2
No. of shares
399,543,860
74,450,844
101,254,639
% of issued
capital
60.44
11.26
15.32
1
Crescent Capital Partners Management Pty Limited represent the interests of CCP Bidco Pty Limited (CCP Bidco) and Perpetual Corporate Trust Limited (Perpetual)
as manager. Perpetual’s shareholding % is therefore included in the 60.44% holding of CCP Bidco in the table above.
2
Sony Life Insurance Co., Ltd’s (Sony Life) shareholding is held through its custodian, Citicorp Nominees Pty Limited and under the Option Agreement signed with
Crescent and therefore also included in the 60.44% holding of CCP Bidco in the table above.
Twenty largest shareholders
Shareholders
CITICORP NOMINEES PTY LIMITED
PERPETUAL CORPORATE TRUST LIMITED
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