Annual Report
2024
Chairman’s address
Page 4
Managing Director’s report
Page 7
Directors’ report
Page 10
Operating and financial review
Page 18
Operating segment review
Page 35
Remuneration report
Page 53
Auditor’s independence declaration
Page 76
Financial report
Page 77
Consolidated entity disclosure statement
Page 177
Directors’ declaration
Page 178
Independent auditor’s report
Page 179
Shareholders’ and note holders’ information
Page 186
Directory
Page 188
Contents
Annual General Meeting
7 November 2024
Half year end
31 December 2024
Half year result announcement
February 2025
Year end
30 June 2025
Annual report
August 2025
Dates are subject to change
Financial
calendar
Directors’ Report
4
ClearView Annual Report 2024
Financial year 2024 at ClearView was a year of
transition as transformation moved to growth and
maturity. The business achieved critical key milestones
and importantly, built significant momentum in
sales, putting ClearView on target to achieve the
FY26 goals we set last year. The Board’s confidence
in the implementation of ClearView’s strategy was
demonstrated in the payment of an interim dividend.
Before discussing the company’s performance in more
detail it is worth reflecting on the environment that
ClearView and our customers across Australia have
operated in throughout the period, and how we think
it might play out moving forward.
Clearly the higher cost of living has been the single
most influential factor impacting Australians. Higher
inflation has eroded the savings built up through
COVID, unemployment is trending higher, and global
uncertainty continues to be destablising to markets.
Despite government initiatives like the recent energy
bill relief rebate and tax cuts, many Australian
households will continue to experience cost of living
pressures for a few more years at least. All these
factors make the role of life insurance and protection
even more important, and the cost of insurance a key
driver in decision making.
ClearView policies provide benefit indexation,
ensuring that benefits align with the rising cost of
living. Despite this, studies show that Australians are
significantly underinsured by up to $25 billion1. A key
aspect of our strategy over the next few years is to
address this.
In my previous Chairman’s address I highlighted our
simplification and transformation initiatives. I am
delighted to report that we are now transitioning into
a growth phase. Whilst we still have some work to
complete our transformation journey, we are already
seeing the benefits of these changes flowing through
in strong premium growth, supported by an uplift in
underlying service and efficiencies. This is reflected in
the improved acquisition costs per policy achieved this
year.
Despite Australians remaining underinsured, it is
encouraging to see increasing year-on-year life
insurance sales across the whole life industry. For the
first time in a number of years, industry new business
sales increased, up 11% for the rolling 12 months to
31 March 2024, following four years of declining
sales. ClearView was well positioned to leverage
this opportunity, growing market share of advised
new business to 11.0%2 (FY23 9.2%). In dollar terms,
ClearView’s new business premium in FY24 was
$33.7 million, up 34% on FY23. A combination of new
business growth, policy indexation, and premium rate
increases contributed to ClearView’s in-force premium
as at 30 June 2024, increasing by 10% to $373.9
million (FY23: $339.3 million).
Chairman’s
address
Geoff Black
Directors’ Report
ClearView Wealth Limited
5
ClearView’s distribution footprint expanded with a
material increase in the number of relationships with
top-tier and mid-tier adviser groups, and positioning
on the approved product list of all major advice
groups. ClearView’s share of the new business wallet
from top tier advisers grew from 11.5%2 in June 2023 to
15.8% in March 2024.
We have observed a slight uptick in lapses and claims
incidence that often go hand-in-hand with household
budget stress. However, as many ClearView customers
purchase their insurance through superannuation
the immediate cost of living impact is not felt, which
importantly enables them to retain cover. In addition,
ClearView continued to undertake a number of
proactive initiatives through FY24 to assist customers
through difficult times.
As I flagged in last year’s address, FY24 saw the
introduction of a new accounting standard AASB
17 – ‘Insurance Contracts’. This new standard, while
not changing the underlying economics of life
insurance, has had a material impact on the timing
and recognition of profit. The FY23 comparatives have
been adjusted to reflect the different methodology.
ClearView’s preferred measure of performance
remains Group Underlying NPAT (from continuing
operations) and was $35.3 million for FY24 (FY23:
$28.2 million). This is a strong result, particularly given
the primary focus was to execute on the strategic
transformation program, and was driven by the growth
in new business while offset by increased claims.
Simplification and transformation
Excellent progress was made on the wider
transformation initiatives, although final execution of
the wealth exit has taken a little longer than originally
planned. In respect of the wealth exit, key milestones
included the completion of the sale of CFML, our
responsible manager, and exit from the superannuation
trustee business. The final milestone remaining is the
completion of the trustee’s successor fund transfer
(SFT) that will result in the derecognition of the group
life investment contracts and related assets from the
Balance Sheet. This is in train and expected to occur in
FY25. Once this occurs, ClearView will have no residual
wealth exposure resulting in a simpler, less complex
business, focused on life insurance only.
Phase 1 of the Policy Administration System
implementation was completed during FY24 and
migration of our legacy policies on to the new
platform has commenced. The migration is expected
to complete in 1H FY26. On completion, ClearView
will have all policies on one administrative platform,
resulting in both a better customer experience and
significant efficiency benefits.
During the year ClearView sold its interest in
Centrepoint Alliance enabling the business to position
itself as a pure life insurer.
Sustainability and Resilience
ClearView has continued to enhance its product
development processes with the completion of the
Phase 1 IDII review. A more mature data analytics
capability is providing insights into the insurance
portfolio to enable a more proactive management.
This capability, and a maturing risk management
culture will support sustainable growth in the future.
In line with industry trends, ClearView has observed
an uptick in claims, in particular relating to Total and
Permanent Disability policies. We are monitoring this
trend and continue to invest heavily in this area.
The threat of cyber-attacks and data breaches remain
a key risk for businesses, and we have taken important
steps to uplift our Cyber Security rating to further
safeguard the privacy of our customer information.
There continues to be a significant amount of
regulatory reform, including the introduction of
CPS230 Operational Risk Management which will be
effective 1 July 2025, and the Financial Accountability
Regime (FAR) that will be effective for ClearView
from March 2025. The implementation of these
major standards will strengthen both the operational
resilience of ClearView and accountability from
Executives and Directors.
Dividend and capital
During the year the Board declared and paid an
interim fully franked dividend of 1.5cps. A final
dividend of 1.7cps has been declared by the Board
taking the full year dividend to 3.2cps for FY24 (3cps
in FY23). This represents a 6.7% increase and is at the
top end of the Board’s target payout ratio of 40% to
60% of Underlying NPAT. The Board has reintroduced
the dividend reinvestment program for the final FY24
dividend.
ClearView continues to maintain a strong capital
position and future growth plans will be funded by
the positive capital generation from the Group’s in-
force portfolio. In FY25 ClearView will complete the
exit from wealth and progress the completion of the
Group’s new Policy Administration System across the
whole organisation. Achievement of these milestones
will continue to strengthen the Group’s capital
position.
Directors’ Report
6
ClearView Annual Report 2024
Acknowledgements
I would like to thank Nadine and the Executive Leadership
Team for their continued commitment and perseverance
in what has been another challenging year. The leadership
transition could not have been more seamless and the
results this year reflect that.
I would particularly like to acknowledge the Directors
of ClearView Life Nominees, our Superannuation
Trustee company. ClearView’s exit from wealth required
considerable additional time and commitment from them
to ensure an orderly transfer of Trustee responsibilities
to Equity Trustees Superannuation Limited. This was a
critical milestone in the wealth exit.
FY24 also required a number of additional Board
meetings, in order to ensure ClearView’s implementation
of AASB 17 was as seamless as possible. I thank Board
members for their contributions over the period.
Geoff Black
Chairman
1
Deloitte “Mind the gap” August 2023.
2
ClearView calculations based on NMG Risk Distribution Monitor Reports for Retail Advice New Business Analysis for relevant periods – NMG
Market analysis includes total of 'Retail' consistently applied (that is, IFA, Bank Advice and Aggregator channels). FY24 new business market
share based on NMG Risk Distribution Monitor Reports for Retail Advice New Business Analysis based on rolling 12 months to 31 March 2024.
Directors’ Report
ClearView Wealth Limited
7
Reflections of first year in the role
It has been a year since taking on the role of Managing
Director of ClearView. As I reflect on the first 12
months, it has been both exciting and rewarding and
if I could sum up this period in one word it would be
“growth”. Personally, there has been a lot to learn and
I am extremely grateful to have a supportive Board
and a strong executive leadership team with deep
life insurance experience. The Retail life insurance
market is growing and adviser numbers have started
to steadily increase. ClearView has also experienced
growth: in our new business market share and adviser
footprint; progress in our strategic transformation; and
by expanding the diversity and depth of experience of
our people.
The heart of ClearView’s culture continues to shine
through on a daily basis, summarised as a small
company with big aspirations. There is a strong “can
do” attitude across our business, as we strive to
service our customers and partners and deliver on our
promises. The “dynamic challenger” culture is alive
and well at ClearView.
This year has validated the strategic decisions that
were made in 2020 to simplify and focus on our core
business which is Life Insurance. We are extremely
proud of the progress made in executing on our
strategy. Across ClearView our teams have worked
hard on being easy to do business with and to further
enhance our transformation efforts of the last three
and a half years, and our results this year are a
testament to this.
With a focused and disciplined approach, we continue
to grow our market share, by providing targeted
quality business, and servicing our customers faster,
better, and smarter. ClearView is well positioned
to continue to gain share in a growing Retail life
insurance market.
I have had the opportunity over the last year
to meet with many of our customers, advisers
and shareholders in person and I look forward
to continuing to do this over the next year. Their
feedback has been invaluable and helps to strengthen
relationships and make ClearView a better business.
Our Purpose - Helping more
Australians
One of the most fulfilling aspects of our work as a Life
Insurance business is the privilege to see and hear
first-hand how we make a difference in everyday lives,
often when people are at their most vulnerable.
Our business is essentially delivering on a promise.
When our customers have an injury or sickness, our
focus is on supporting them through the entire claims
Managing
Director’s
report
Nadine Gooderick
Directors’ Report
8
ClearView Annual Report 2024
experience, not just their claim entitlements. By
assisting customers as quickly as we can with respect,
kindness, and consideration, we aim to help them
through some of the most challenging times in their
lives.
In FY24 ClearView paid $134.9 million in claims to
1,040 customers. This reinforces our purpose which
is to help as many Australians and their families as
possible achieve peace of mind for the future.
Financial Advice Landscape
Following years of unprecedented regulatory
disruption leading to a significant reduction in
adviser numbers, the industry is now returning to
growth. Pleasingly, in the last 12 months the number
of specialist life insurance advisers increased by 21%1.
This has been reflected in the growth of industry new
business sales.
This stabilisation of Financial Adviser numbers
presents a critical inflection point for the life insurance
industry, and we must continue to develop support
systems and innovation to ensure continued growth
and access to advice for more Australians. Quality
products and being easy to do business with have
never been more important.
Recognising the underinsurance gap in the market, we
have made strategic decisions, such as partnering with
specialist Life Advice firms that embrace attracting a
younger demographic of client through social media,
podcasts, and refined technology, and processes. As
a result we are seeing an increase in younger lives
entering our risk pool.
More needs to be done to address the underinsurance
gap and we are supportive of the Delivering Better
Financial Outcomes (DBFO) legislative drivers to
enable us to support our customers with their queries
more easily. We continue to be an active member of
CALI, working with them to ensure industry lobbying
efforts are focused on long term, sensible reform.
A positive impact on our people,
partners, customers, and
community
Our ClearView Lifeline Australia Scholarship Program
has continued this year, supporting nominated
employees with paid community service leave up to
92 hours per calendar year, and through donations and
awareness raising activities such as the Lifeline Pushup
Challenge. We continue to support those charities
nominated by our employees, making donations to
key organisations including the Australian Kookaburra
Kids Foundation, Cancercare Australia, Cerebral Palsy
Alliance and Sony Foundation Australia.
This year we also provided additional support to
our customers diagnosed with cancer through our
provision of the Cancer Coach program in partnership
with Osara Health. Since the commencement of
the partnership, 60% of our customers diagnosed
with cancer have engaged in the program, and their
testimonials support our belief that this is a valuable
offering to our customers navigating this challenge.
Update on Strategic Execution
I am incredibly proud of the team’s achievements
in delivering on our refreshed strategy in FY24. We
have achieved many significant milestones, further
reinforcing ClearView’s foundations and allowing us
to grow consistently while progressing our wider
transformation goals. Our strategy is laid out through
to FY26, and it is pleasing to see that we continue to
be on track to meet our targets across the board.
In particular, I am really proud that during FY24 we:
• Accelerated sales momentum through
strengthening adviser relationships;
• Enhanced our service proposition and operational
resilience through the completion of our target
Policy Administration System build, significant
uplift of our cyber security rating, and Operations’
performance improvements;
• Maintained product leadership with our FY24
ClearChoice refresh, data analytics capability uplift,
and completion of APRA IDII Review 1;
• Demonstrated the maturity and growth of the
business, which enabled us to increase our
underwriting risk and pay our inaugural interim
dividend; and
• Completed the implementation of AASB 17.
I was also delighted to be able to broaden the
diversity and depth of experience in the executive
leadership team during the first half of the year, with
the appointment of a new Chief of Staff and Chief
People Officer. These changes fortified an already
solid team, helping to ensure that ClearView is set up
for success.
Directors’ Report
ClearView Wealth Limited
9
Protect
Optimise
Diversify
Explore
End to end
active portfolio
management
Extract more
value from what
we have built
Assess, prioritise
and action
Horizon II
possibilities
Get curious
The Future - Easy to do business with / superior experience with
operational efficiency
We are one year into our 3-year strategic plan built on the pillars of Protect, Optimise, Diversify, and Explore.
As we look to FY25, our goals are to remain focused on our core life insurance business and continue to
outperform the market by amplifying Retail growth. At the same time we will be utilising our data, analytics, and
technology, leveraging customer and adviser feedback to continually improve our service offering and enhance
our operational efficiency.
Our strength is in our agility and flexibility combined with our dynamic challenger culture and “can do” attitude.
We need to remain curious and open-minded as we strive to be the best at Life Insurance. Our results this year
support our investment in transformation, commitment to customer service and the product enhancements we
have delivered, and I am looking forward to another successful and productive year as we get closer to delivering
on our FY26 strategic goals.
Acknowledgments
I would like to thank the Executive Leadership Team for their ongoing support during my first year as Managing
Director. The personal and professional growth I have experienced during this time is thanks to their invaluable
counsel, encouragement, and assistance. I look forward to achieving more great things together in FY25.
I would also like to thank all our employees for their commitment, hard work, and dedication over FY24. As seven-
time F1 World Champion Lewis Hamilton says: “We win and lose together” - our successes and growth this year
are thanks to each and every one of us.
Finally, I would like to thank the ClearView Board for trusting and consistently supporting me to take ClearView to
the next stage of its growth journey.
Nadine Gooderick
Managing Director
1
Based on NMG Risk Distribution Monitor Report for Retail Advice New Business Analysis for the period January – March 2024.
10
ClearView Annual Report 2024
Directors’
report
Directors’ Report
ClearView Wealth Limited
11
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 2024 (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 (Resigned as Director and appointed as Alternate Director to Eloise Watson on 8 April 2024,
and resigned and re-appointed as Director on 24 May 2024)
• Gary Burg
• Edward Fabrizio
• 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 (Resigned as Alternate Director to Nathanial Thomson and appointed as Director on 8 April
2024, and resigned as Director on 23 May 2024)
Principal activities
ClearView is an Australian financial services company with businesses that, during the year, offered life insurance,
superannuation and investment products and services under the ClearView brand.
ClearView’s life insurance products are manufactured under a retail life insurance Australian Financial Services
(AFS) licence and 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).
Significant progress was made in FY24 to reset and simplify the business with the ambition of retaining its core
focus of being a life risk insurance provider. The Company disposed of its remaining equity interest in Centrepoint
Alliance Limited (Centrepoint Alliance) allowing for the full exit from financial advice and furthermore material
steps were made on the exit from the Wealth Management business (including completion of the sale of the
investment management business and retirement of the ClearView trustee). Further details are provided later in
the report.
Directors’ report
Directors’ Report
12
ClearView Annual Report 2024
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 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 at Crescent Capital Partners Management, a
leading Australian private equity investment firm. Nathanial has over
20 years of experience in strategy consulting, private equity and
investment banking. He has significant consulting experience from his
prior role at McKinsey & Co. Nathanial is the current Chair and non-
executive director of Cardno Limited, National Dental Care Limited,
Clover Insurance, and AireSafe International Pty Ltd. Nathanial is also a
non-executive director of Australian Clinical Laboratories.
Nathanial holds a Bachelor of Commerce Degree and Bachelor of Laws
Degree from the University of Western Australia.
Nathanial was appointed to the Board on 22 October 2012 and
currently serves as a member of the Nomination and Remuneration
Committee.
Directors’ Report
ClearView Wealth Limited
13
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.
Michael is the current Chairman of Australian Clinical Labs Limited,
Green Leaves Early Learning Centres Pty Ltd and Bremick Pty Ltd.
Michael was re-appointed to the Board on 24 May 2024, following a
period as Alternate Director for Eloise Watson between 4 April and 23
May 2024. Michael served as a Non-Executive Director from 22 October
2012 to 4 April 2024. In addition to his Board appointment, he also
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.
Directors’ Report
14
ClearView Annual Report 2024
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 was 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.
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 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.
Directors’ Report
ClearView Wealth Limited
15
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
Company
Period of Directorship
Gary Burg
Edu Holdings Limited
24 March 2016 – current
Michael Alscher
Cardno Limited
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
Australian Clinical Labs Limited
14 May 2021 – current
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 2024, 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
Attended
Eligible
to attend
Attended
Eligible
to attend
Attended
Eligible
to attend
Attended
Geoff Black
15
15
6
6
4
4
5
5
Gary Burg
15
14
6
6
4
4
5
4
Michael Alscher1
15
7
—
—
—
—
5
—
Nathanial Thomson
15
15
—
—
—
—
5
4
Jennifer Lyon
15
15
6
6
4
4
5
5
Edward Fabrizio
15
15
6
6
4
4
5
5
Eloise Watson2
14
12
—
—
—
—
4
2
1
Resigned 8 April 2024 and appointed as Ms Watson’s alternate until Mr Alscher’s re-appointment as Non-Executive Director on 24 May 2024.
2
Resigned 23 May 2024.
Directors’ Report
16
ClearView Annual Report 2024
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
Fully Paid
Ordinary Shares
Performance Rights2
Restricted Rights3
Vested and
Exercisable
Subject
to vesting
conditions
Vested and
Exercisable
Subject
to vesting
conditions
Geoff Black
100,000
—
—
—
—
Gary Burg
10,918,090
—
—
—
—
Michael Alscher1
—
—
—
—
—
Nathanial Thomson1
—
—
—
—
—
Jennifer Lyon
27,212
—
—
—
—
Edward Fabrizio
—
—
—
—
—
Nadine Gooderick
63,212
62,481
1,617,519
28,745
382,448
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.
1
Mr Alscher and Mr Thomson represent the interests of CCP Bidco Pty Limited and its Associates that non-beneficially hold 326,429,614 shares.
2
LTVR Performance Rights granted in respect of remuneration over the years ending 30 June 2021 to 30 June 2024.
3
STVR Restricted Rights granted in respect of remuneration over the years ending 30 June 2021 to 30 June 2024, with 225,147 rights approved
to be granted..
Directors’ Report
ClearView Wealth Limited
17
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 of 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:
clearview.com.au/governance.
18
ClearView Annual Report 2024
Operating
and financial review
Directors’ Report
ClearView Wealth Limited
19
Operating and financial review
The Board presents its FY24 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.
ClearView strategy
ClearView is strategically focused on what ClearView does best: Life Insurance.
ClearView’s vision is to help Australians and their families achieve peace of mind about their future while being a
positive force for our people, partners, customers and community.
To support the corporate vision, ClearView has articulated its key focus objectives aligned to purpose, people and
performance as:
Customer
Outcomes
Community
impact
People
Outcomes
Business
partner
outcomes
Earnings /
Return on
capital
Capital
adequacy
Support
Australians
and their
families
to achieve
peace of
mind for
the future,
by being
easy to do
business
with
Be a positive
force for the
community
by
protecting
the financial
wellbeing
and
resilience of
Australian
society
Be an
employer
of choice,
with a high-
performance
culture and
collegiate
small
company
feel
Be fair and
transparent
with
business
partners
to support
long term
relationships
Grow the
economic
value of the
company,
reflected in
share price,
stable return
on capital
and regular
dividend
Be a trusted
brand to
deliver on
obligations
through
prudent
capital
approach
PURPOSE
PEOPLE
PERFORMANCE
ClearView has refreshed its business strategy to focus on the growth of its core life insurance business.
ClearView’s mission is to be a dynamic challenger targeting quality sustainable growth by being easy to do
business with and delivering a superior customer experience.
ClearView’s size and simplicity provide a competitive advantage through flexibility and speed to market, with the
longer term aim to diversify its distribution channels and product offerings.
Across the next twelve months (given the exit from wealth management), ClearView will revisit its Corporate
Social Responsibility Agenda to assess where ClearView can make the most impactful change for the benefit of its
customers, partners, people and the community.
ClearView’s core life insurance strategy (in the retail segment) is broadly tracking to plan, achieved through
simplification, disciplined execution and strategic transformation.
Directors’ Report
20
ClearView Annual Report 2024
This is outlined in further detail below:
Core Focus
Life insurance
Creating advantage through strategic transformation
Simplifi ed
Cloud-based
Architecture
1
We are targeting a market-
leading, single policy
administration system
(PAS) with cloud-based
architecture
This technology provides
signifi cant product fl exibility
and customisation to change
off erings effi ciently and at
scale
Smaller size
with core
Life focus
2
Our ambition is to be the
best at Life Insurance,
leveraging our size and
simplicity as well as our data
insights capability to make
fast and informed decisions
Our core Life strategy
enables a singular focus
on being easy to do
business with and delivering
a superior customer
experience
Speed
to market
3
We strive to continually
understand the needs of
our customers and respond
quickly and appropriately
We are developing the
technological and business
agility to address our
customers and the changing
market with speed and
effi ciency
Financial Advice
Wealth Management
Exited November 2023
Exit in progress
November 2023 - Sale of
Centrepoint equity stake
for $15.2m cash
December 2023 -
ClearView Trustee retired
and ETSL appointed
January 2024 - Sale of
Investment Management
business to Human
Financial
In progress - Unwind of
life investment contracts
upon SFT1
1
SFT relates to the successor fund transfer of the ClearView Retirement Plan and related unwind of the life investment contracts
ClearView’s goal is to be the best at Life Insurance, moving from a mid-tier to a top tier player over time. Key
focus areas to achieve this objective are as follows:
• Focus on its core life insurance business by completing the full exit of non core businesses;
• Completion of the strategic transformation journey and program of work;
• Building out a strong foundation with a high performance culture, capability and management;
• Executing on the core retail distribution strategy in the financial adviser market; and
• Diversifying earnings through expanding product and distribution channels in the longer term (Horizon II).
Protect
Optimise
Diversify
Explore
End to end
active portfolio
management
Extract more
value from what
we have built
Assess, prioritise
and action
Horizon II
possibilities
Get curious
Directors’ Report
ClearView Wealth Limited
21
Key highlights of the business simplification, disciplined execution and growth focus that were achieved in the
financial year are as follows:
• Exit of the ownership of financial adviser networks - the minority equity stake in Centrepoint Alliance
(acquired through the merger with the ClearView financial advice businesses in November 2021) was sold in
November 2023 allowing for the full exit from financial advice.
• Divestment of the wealth management business - significant progress has been made on the exit including
completion of the sale of the funds management business, ClearView Financial Management Limited (CFML) to
Human Financial Pty Limited (Human Financial) in January 2024. The superannuation fund trustee, ClearView
Life Nominees Pty Limited (CLN) retired as the trustee of the ClearView Retirement Plan (CRP) in December
2023, with the simultaneous appointment of Equity Trustees Superannuation Limited (ETSL) in its place. The
final milestone remaining is the completion of the trustee’s successor fund transfer (SFT) that will result in the
derecognition of the group life investment contracts and related assets from the Balance Sheet. This is in train
and expected to occur in FY25. Once this occurs, ClearView will have no residual wealth exposure resulting in a
simpler, less complex business, focused on life insurance only.
• Winning share in a growing retail life insurance market - the sales momentum and growth of ClearView
ClearChoice has continued in FY24 with the new business market share up to 11% and new business up 34%
to $33.7 million. ClearView is gaining new business share in a growing (advised life insurance sales) market.
ClearView has established a diversified distribution network with circa 1,000 dealer groups comprised of over
4,000 advisers and remains well positioned to continue to increase its new business market share.
• Technology transformation - the enhancement and build out of the back end of the technology platform has
further progressed in the financial year, with the successful completion of Phase 1 of the project. The focus has
now shifted to the migration of the in-force policies onto the new technology platform (for policies issued prior
to 1 October 2021), with a targeted completion date in 1H FY26. The achievement of the operational efficiencies
and additional scale benefits are expected to start flowing through from completion of the migration.
• Investment in people and processes - this included the 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; and
• Increased underwriting risk for new business - from 1 October 2023, ClearView’s exposure to underwriting risk
for new business has been increased, thereby increasing the sum insured retained that (subject to actual claims
experience) should result in higher new business profit margin over time (as new business is written from that
date). The confidence to increase the underwriting risk exposure for new business is due to the increased size
of the in-force portfolios, improved Group capital position and product sustainability measures seen in the
Group’s recent financial performance.
The simplification program and core focus on life insurance is driving the operating results and growth.
Directors’ Report
22
ClearView Annual Report 2024
FY26 goals
ClearView has in place its FY26 financial goals that remain unchanged from those previously communicated to the
market:
FY26
Goals3
New Business
Market Share1
12-14%
In-force Premium
Market Share1
~4%
Life Insurance
Underlying
NPAT4 Margin2
11-13%
40-60%
Gross
Premiums
$400m
Dividend
Policy
ClearView remains on track to achieve its FY26 goals:
• New Business target market share 12-14% - the current sales trajectory and product and channel focus (data
driven outcomes-based approach) are driving growth and the increased new business market share with
continued market outperformance in profitable segments.
• In-force target market share ~4% - the new business growth, retention strategies (lapse management), benefit
indexation, further repricing of the in-force portfolios to realign pricing to risk and experience, product and
streamlined channel engagement are driving the increase, aligned to the FY26 goal of in-force premiums
exceeding ~$400m.
• Life insurance Underlying NPAT target margin range of 11% - 13% – the back-office investment and operational
efficiencies from the new platform form a key part of the FY26 targets. The operational efficiency benefits of
technology investment are anticipated to be achieved post completion of the migration of the (pre 1 October
2021) in-force policies onto the new platform. The scale benefits, increased exposure to underwriting risk for
new business, and operational efficiency from the back office and technology investment support margin
accretion (over time). Experience assumption changes have been allowed for in the FY26 target margin range
of 11% - 13%.
The further (medium term) growth opportunities for the business to be considered, include but are not limited to:
• Entering into new customer channels to support its core IFA market channels;
• New products and services to further help Australians and their families achieve peace of mind about their
future; and
• Other opportunities that support this overall life insurance focused strategy.
1
ClearView calculations based on NMG Risk Distribution Monitor Reports for Retail Advice New Business and In-force Analysis – NMG Market
analysis includes total of 'Retail' consistently applied (that is, IFA, Bank Advice and Aggregator channels).
2
Is calculated as Life Insurance Underlying NPAT divided by Gross Premium Income.
3
FY26 goals based on AASB 17 FY25-27 business plan forecasts approved by the Board on 16 July 2024.
4
Underlying NPAT (from continuing operations) continues to be adopted by the Board as its key measure of Group profitability and basis for
dividend payment decisions. It is used as a non IFRS measure of earnings that excludes the impacts of market and interest rate volatility,
with the definition updated to reflect the application of AASB 17. Underlying NPAT (from continuing operations) has been defined as the
consolidated profit after tax excluding the effects of economic changes on both the AASB 17 insurance contract liability and the incurred
income protection disabled lives reserves, the (non-cash) impairment of the asset for acquisition cash flows (AIACF), changes in the loss
component that is predominantly driven by the level premium business, current year timing impacts of assumption changes on the contractual
services margin and any costs considered unusual to the Group’s ordinary activities. Underlying NPAT includes the amortisation of capitalised
software and leases, underlying investment income (the portfolio carry yield on the investment portfolio and interest rate earned on physical
cash holdings), costs associated with the incurred claims reinsurance treaties and interest costs associated with corporate debt and Tier 2
Capital.
Directors’ Report
ClearView Wealth Limited
23
Regulatory environment and change
The financial services industry has continued to face significant regulation and scrutiny.
Regulators are expected to continue their supervision and enforcement activities to ensure good product design
processes, appropriate distribution of products, accurate disclosure on sustainability and efficient management of
claims handling.
The Financial Accountability Regime will apply to the life insurance industry from 15 March 2025. The Regime
imposes explicit accountability obligations on directors and senior executives and mandates certain notifications
to ASIC and APRA relating to the division of responsibilities. These obligations are aimed at increasing overall
accountability for the management and the operating culture of financial services entities and providing ASIC and
APRA with improved transparency.
APRA has finalised its Prudential Standard CPS 230 ‘Operational Risk Management’, which will commence from
1 July 2025. Operational risk and resilience have been significant issues for the financial services industry over
recent years, as regulated entities have faced disruptions from events such as the COVID-19 pandemic, volatile
markets and cyber security and technology-related threats. Accordingly, APRA has sharpened its focus on
operational risk management through the finalisation of CPS 230. Broadly, CPS 230 is aimed at ensuring APRA-
regulated entities can better manage operational risks and appropriately respond to, and continue to operate
through business disruptions. The implementation of CPS 230 is of critical importance and will require significant
changes to governance, compliance, contractual and incident response arrangements for all APRA-regulated
entities.
On 7 December 2023, the Government provided its final response to the Quality of Advice Review (QAR). These
significant reforms are aimed at making quality financial advice more accessible and affordable for consumers by
reducing the cost and regulatory burden for financial advisers who provide personal financial advice.
The Delivering Better Financial Outcomes draft legislation was introduced into parliament on 27 March 2024,
aimed at addressing the first tranche of the QAR reforms by implementing 11 of the 22 QAR recommendations
and includes customer-consent obligations for adviser commissions to be paid in relation to personal advice. Draft
legislation addressing the second tranche of the proposed QAR reforms is likely to be introduced into parliament
later in 2024 and is expected to introduce a new class of financial adviser, referred to as qualified advisers, and a
more simplified financial advice document process.
ClearView continues to actively monitor both regulatory and legislative industry reforms.
Directors’ Report
24
ClearView Annual Report 2024
Risk management
Risk management in ClearView has priority with the Board, Executive Leadership Team and the business. The
way in which risks are managed continues to evolve to meet the ongoing changes and challenges in economic
conditions, the competitive landscape, stakeholder (including regulatory) expectations and the delivery of solid
and sustainable financial performance. In FY24, our areas of focus were on enhancing information and cyber
security, business resilience and progressing the implementation of requirements introduced in the new APRA
Standard CPS 230 - Operational Risk Management.
ClearView’s risk management framework supports the business with managing the risks to achieving our
objectives within risk appetite. These risks include a combination of existing and emerging risks within our
financial and non-financial risk exposures.
ClearView regards the skills, experience and focus of our 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 220 Risk Management) and is subject to an independent review
every three years.
The following diagram illustrates the key elements of the RMF.
Risk Governance
•
Policies and guidelines
•
Boards and board committees
•
Management committees
•
Reporting
•
Performance measurement
•
Training and awareness
Risk Management Approach
•
Risk Appetite Statement (RAS)
•
Risk Management Strategy
(RMS)
•
Material Risk Categories
(Strategic / Operational / Credit /
Market and Investment / Liquidity /
Insurance / Compliance)
•
Capital (ICAAP)
Risk Management Process
•
Identification
•
Assessment
•
Management
•
Monitoring
•
Attestation / Assurance
•
Stress and scenario analysis
Risk Management Accountability
•
1st line – own the risk
•
2nd line – advisory, challenge
and oversight
•
3rd line – independent assurance
Risk Culture
The RMF is described by Board-approved documents, including (but not limited to):
• The Risk Appetite Statement (RAS) articulates the material risks that ClearView is exposed to and specifies the
type and level of risk we are willing to accept in pursuit of strategic, business and financial objectives, giving
consideration to the interests of our policyholders.
• The Risk Management Strategy (RMS) describes ClearView’s strategy for managing current and emerging
material risks, including an outline of risk management policies and processes and the risk governance
structure.
Directors’ Report
ClearView Wealth Limited
25
• The Risk Culture Framework (RCF) describes the
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 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 our 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 are 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 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 risk management
framework. The Risk Committee is responsible for
developing and monitoring the risk management
policies and reports regularly to the relevant Boards
on its activities.
The Risk Committee oversees how management
monitors compliance with the 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
• Conduct
• 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 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 work plan which enables the business to focus
on specific areas of activity to continue to improve our
maturity.
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
Directors’ Report
26
ClearView Annual Report 2024
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 and 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.
Implementation of AASB 17
ClearView has adopted AASB 17 – ‘Insurance
Contracts’ for the first time, with the standard
becoming effective from 1 July 2023.
AASB 17 – ‘Insurance Contracts’ represents a material
change in the accounting for life insurance contracts,
and introduces significant change in the recognition,
measurement, presentation and disclosure of these
contracts.
Key changes from the adoption of the new standard
include:
• Balance Sheet - lower net assets at transition
(1 July 2022) of $83.6 million (after tax) and
creation of a related deferred tax asset of $35.9
million. As at the transition date, the 1 July 2022
opening Balance Sheet has an initial net asset
reduction of $83.6 million (after tax) - this is then
released (over time) leading to a positive impact
on future profit release. As these temporary
differences create income tax losses on transition
and that it is probable that the Group will make
future profits against which the tax losses can be
utilised, the additional deferred tax asset of $35.9
million has been recognised on balance sheet on
transition.
• Capital - no change in regulatory capital
requirements. The Group will however realise a tax
(capital) benefit in future periods as the income tax
losses (recognised) on transition are utilised.
• Profitability - changes to the timing and pattern
of profit release including impacts on statutory
reported profit from the more detailed level of
granularity and onerous contract assessment.
AASB 17 impacts the timing of the profit release
pattern (coverage units release), with no impact
over the full life of a policy. Furthermore, the
stepped premium business is now treated as a
short-term contract boundary under AASB 17
(as opposed to the level premium business and
reinsurance that continue to be recognised as long
duration contracts). This difference in treatment
of the gross and reinsurance contract boundary
(for stepped premium contracts) causes a timing
mismatch that changes the pattern of profit
recognition between periods (no impact over the
life of a policy).
• Non IFRS Underlying NPAT remains the Board’s
key measure of performance and normalises
the statutory reported profit for the granularity,
onerous contract assessment and volatility that
has been introduced with the adoption of the
new standard, including the non-cash impairment
of the asset for insurance acquisition cash flows
(AIACF), interest rate and market volatility, current
year timing impacts of assumption changes on the
contractual services margin and loss recognition
movements between periods.
AASB 17 does not impact the fundamental economics
of ClearView’s life insurance business – there is no
change to the underlying product cash flows, financial
strength, claims paying ability, or dividend capacity.
It is a new accounting standard for insurance and
reinsurance contracts required by the Australian
Accounting Standards Board (consistent with
International Financial Reporting Standards) that
impacts the timing of the recognition of insurance
earnings, not the quantum in total.
Further details on AASB 17 – ‘Insurance Contracts’ are
outlined in Note 5 and 9.6 of the Financial Statements.
FY24 Results overview
The ClearView Group achieved the following results
for the year ended 30 June 2024, with comparatives
updated on a AASB 17 basis.
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 reconcile to the
same number.
Directors’ Report
ClearView Wealth Limited
27
After Tax Profit by Segment, $M
FY24
FY23
(restated)
%
$M
$M
Change4
Life Insurance
39.5
32.1
23%
Listed/Group costs
(4.2)
(3.9)
10%
Group Underlying NPAT from continuing operations1,2,3
35.3
28.2
25%
Financial advice – interest in Centrepoint Alliance
2.8
0.7
Large
Wealth management – discontinued operation
(4.6)
(2.7)
Large
Group Underlying NPAT
33.5
26.2
28%
Change in loss component
(12.2)
(4.6)
Large
Economic assumption impact on AASB 17 liability
(2.2)
3.0
Large
Net economic assumption impact on disabled lives reserves (DLR)
0.8
(2.3)
Large
Changes in AIACF impairment
(16.4)
(10.0)
64%
Current year timing impacts from assumption changes on CSM
2.3
—
NM
Wealth Management exit
(14.9)
(0.8)
NM
Costs considered unusual to ordinary activities
(3.4)
(2.6)
31%
Reported NPAT
(12.5)
8.9
NM
Key financial metrics
FY24
FY23
%
$M
$M
Change4
New business
33.7
25.2
34%
In-force premiums5
373.9
339.3
10%
Gross premium income
358.1
325.1
10%
Life Underlying NPAT margin (%)6
11.0%
9.9%
110bps
Net underlying investment income
4.0
2.8
43%
Reinsurance premium expense
(130.2)
(123.2)
6%
Net claims expense
(48.2)
(37.9)
27%
Operating expenses
(69.2)
(64.9)
7%
Reported diluted EPS (cps) (continuing operations)7
0.65
1.88
(65)%
Underlying diluted EPS (cps) (continuing operations)7
5.50
4.40
25%
1
Underlying NPAT (from continuing operations) continues to be adopted by the Board as its key measure of Group profitability and basis for
dividend payment decisions. It is used as a non IFRS measure of earnings that excludes the impacts of market and interest rate volatility, with
the definition updated to reflect the application of AASB 17.
2
Underlying NPAT (from continuing operations) has been defined as the consolidated profit after tax excluding the effects of economic
changes on both the AASB 17 insurance contract liability and the incurred income protection disabled lives reserves, the (non-cash)
impairment of the asset for acquisition cash flows (AIACF), changes in the loss component that is predominantly driven by the level premium
business, current year timing impacts of assumption changes on the contractual services margin and any costs considered unusual to the
Group’s ordinary activities. Underlying NPAT includes the amortisation of capitalised software and leases, underlying investment income (the
portfolio carry yield on the investment portfolio and interest rate earned on physical cash holdings), costs associated with the incurred claims
reinsurance treaties and interest costs associated with corporate debt and Tier 2 Capital.
3
From continuing operations; Underlying NPAT includes Life Insurance business unit and the listed segment; excludes the wealth management
business (discontinued operation), the equity accounted earnings of Centrepoint Alliance from the date of completion (1 November 2021)
and the profit on sale of the shares in Centrepoint Alliance in November 2023. 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.
4
% change FY23 to FY24.
5
In-force premiums are the annualised premium in-force at balance date for the advice products (LifeSolutions and ClearChoice) and the closed
direct products no longer marketed to new customers.
6
Is calculated as Life Insurance Underlying NPAT divided by Gross Premium Income.
7
FY23 restated given change to AASB 17
Directors’ Report
28
ClearView Annual Report 2024
The FY24 result reflects the increased interest rates between periods, the strong growth and underlying business
momentum that has been driven by the ongoing business simplification. It has been positively impacted by
a stepped change in new business sales, inflation linked premiums and lapse experience (largely in line with
expectations), offset by adverse income protection and Total Permanent Disability (TPD) claims experience.
The claims assumptions have been updated (at 30 June 2024) to reflect the increased income protection and
TPD claims costs and experience. The FY26 target margin range of 11% - 13% allows for a further phase of the
gross premium repricing cycle in CY25 to cover the increased claims and (if applicable) reinsurance costs across
these products. The improving target margin range (over time) is driven by scale benefits, increased exposure to
underwriting risk for new business (from 1 October 2023) and operational efficiency savings from the back office
and technology investment (FY26+).
The FY24 actual life insurance key performance indicators are outlined below:
FY24
Actual
New Business
Market Share1
11.0%
In-force Premium
Market Share
3.5%
Life Insurance
Underlying
NPAT Margin2
11.0%
60%
payout
Gross
Premiums
$358.1m
+10%
Fully franked
FY24 dividend3
3.2cps
The business has now shifted to a growth focus as can been from the key indicators outlined below:
• Gross premium income increased by 10% to $358.1 million;
• New business increased by 34% to $33.7 million;
• New business market share (on a rolling 12 month basis) increased to 11.0% (up from 9.2% in FY23);
• Advice in-force premiums increased 12% to $341.9 million; and
• Total in-force premiums increased 10% to $373.9 million
This resulted in:
• Group Underlying NPAT from continuing operations increasing by 25% to $35.3 million;
• Life Insurance Underlying NPAT increasing by 23% to $39.5 million; and
• Life Insurance Underlying NPAT margin of 11.0% being achieved
The exit from the wealth management business allows for the removal of its historical drag on earnings. It
continues to be treated as a discontinued operation.
During the year, the sale of the equity interest in Centrepoint Alliance in November 2023 resulted in proceeds
of $15.2 million and a gain on sale of $2.2 million. Furthermore, the sale of CFML completed on 31 January 2024,
with a deferred consideration of $4.85 million (net of a $0.15 million completion payment). The consideration was
received on 28 February 2024.
This is aligned to the core focus of being a life risk insurance provider.
1
FY24 new business market share based on NMG Risk Distribution Monitor Reports for Retail Advice New Business Analysis (includes the total
of 'Retail' consistently applied - that is, IFA, Bank Advice and Aggregator channels). NB market share is based on a rolling 12 months to 31
March 2024. FY24 in-force market share as at 31 March 2024 based on NMG Risk Distribution Monitor in-force report.
2
Is calculated as Life Insurance Underlying NPAT divided by Gross Premium Income.
3
Fully franked dividend. Dividend reinvestment plan to operate for FY24 final dividend.
Directors’ Report
ClearView Wealth Limited
29
Revenue from continuing operations
The Group’s revenue base in the year was generated from premiums charged to life insurance policyholders.
The increase in gross life insurance premiums to $358.1 million (+10%) was driven by premiums in force that rose
from $339.3 million in FY23 to $373.9 million in FY24 (+10%). Core in-force premium growth primarily reflects the
net impact of new business flows, lapses and age, CPI and premium rate increases.
New business (sales) is driven solely by the ClearView ClearChoice product suite as the LifeSolutions, Non-Advice
and Legacy portfolios are closed to new business.
This is discussed in further detail below:
Chart 1: ClearView is gaining new business market share in a growing market
IFA New Business ($m) and Market Share1,2 (%)
FY24A
FY23A
FY22A
FY21A
FY20A
FY19A
FY18A
FY17A
FY16A
FY15A
FY14A
FY13A
FY12A
3.7
0.2
3.5
17.0
23.6
27.5
34.7
8.4
8.6
12.1
11.5
14.3
13.2
19
15.7
40.3
19.7
20.6
42.3
19.7
22.6
39.2
17.3
21.9
24.3
10.1
14.2
9.8
8.4
13.9
7.9
25.2
16.2
10.4
33.7
17.5
11.3
2H
1H
Launch of technology
platform for new business
16.3
2.10%
0.50%
3.10%
4.00%
5.20%
6.30%
7.60%
8.60%
5.90%
5.10%
20.2
6.60%
9.20%
11.0%
New business market share
New Business
Market Share
12-14%
FY26
Target
ClearView’s sales increased by 34% to $33.7 million in the financial year and reflects a stepped change in the sales
run rate since the last quarter of FY23, aligned to the overall market growth. The overall IFA market has grown
11% to circa $300 million of new sales (in the year to 31 March 2024) driven by improving industry dynamics
and adviser productivity, supported by the underlying demand for life insurance products. At the same time,
ClearView has increased its market share in the IFA market to 11.0%, up from 9.2% in FY23. The deep distribution
relationships, quality of the ClearChoice product and a data analytics focus is driving new business share gains.
ClearView has a strong presence and reputation in the IFA market. The strong adviser support of the ClearView
ClearChoice product has the business well positioned to take advantage of the market rebound and achieve its
goal of 12%-14% market share of new business by FY26.
1
ClearView calculations based on NMG Risk Distribution Monitor Reports for Retail Advice In-force and New Business Analysis for relevant
periods – NMG Market analysis includes total of 'Retail' consistently applied (that is, IFA, Bank Advice and Aggregator channels).
2
FY24 new business market share based on NMG Risk Distribution Monitor Reports for Retail Advice New Business Analysis – NB market share
based on rolling 12 months to 31 March 2024.
Directors’ Report
30
ClearView Annual Report 2024
Chart 2: Consistent YoY growth of in-force premium since entry in the IFA market
FY26
Target
FY24A
FY23A
FY22A
FY21A
FY20A
FY19A
FY18A
FY17A
FY16A
FY15A
FY14A
FY13A
FY12A
4
45
71
106
146
184
214
235
255
277
306
375
0.1%
0.3%
0.7%
1.0%
1.4%
1.8%
2.2%
2.6%
2.8%
3.0%
2.9%
3.5%
Advice (In-force) ($m) and Market Share1,2 (%)
CVW Advice IF
IF Mkt Share
3.2%
342
19
In-force Premium
Market Share
~4%
FY26
Target
1
ClearView calculations based on NMG Risk Distribution Monitor Reports for Retail Advice In-force and New Business Analysis for relevant
periods – NMG Market analysis includes total of 'Retail' consistently applied (that is, IFA, Bank Advice and Aggregator channels).
2
FY24 in force market share based on NMG Risk Distribution Monitor Reports for Retail Advice In-force Analysis as at 31 March 2024.
Chart 3: Strong track record of top line growth
Gross Premium - $m
FY26
Target
FY24A
FY23A
FY22A
FY21A
FY20A
FY19A
FY18A
FY17A
FY16A
FY15A
FY14A
FY13A
FY12A
40.9
20.8
20.1
55.1
76.8
105.1
138.3
29.2
25.9
40.6
36.2
55.5
49.6
73.4
64.9
177.7
93.3
84.4
215.2
110.5
104.7
233.6
116.6
117.0
260.0
131
129.0
278.2
139.8
138.4
299.7
152.1
147.6
325.2
165.2
160.0
358.1
180.1
178.0
400.0
2H
1H
Gross Premiums
across channels
$400m+
FY26
Target
Directors’ Report
ClearView Wealth Limited
31
The life insurance market has in-force premiums of
~$18 billion market across retail, group and direct to
consumer channels. ClearView only participates in the
~$9.6 billion retail life insurance advice channel.
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
3.5% of the retail life insurance advice channel, with in-
force premiums up 12% to $341.9 million (total in-force
premiums of $373.9 million including the closed to
new business direct channels).
Gross Premium income broadly represents the average
in-force premiums between periods.
The repricing of the in-force portfolios (across the
industry) has been taking place over the last few years
to appropriately price for risk and experience (claims
and reinsurance impacts). In January 2024, ClearView
commenced the last phase of its initial repricing cycle
on the ClearView LifeSolutions portfolio to cover the
cost of the reinsurance premium rate increases and
material changes to the claims assumptions (based on
experience) in or around 2020. As part of the repricing
process the impact on consumers and affordability
concerns continues to be considered.
Group result - continuing operations
Underlying NPAT continues to be adopted by the
Board as its key measure of Group profitability and
basis for dividend payment decisions. It is used as
a non IFRS measure of earnings with the definition
updated to reflect the application and adoption of
AASB 17 in the financial year.
Items not included in Underlying NPAT primarily result
from costs relating to major restructuring initiatives,
impacts of market and interest rate volatility,
impairments of assets, amortisation of acquired
intangibles and other transactions outside the ordinary
course of business. These are consistently applied
period to period.
The Underlying NPAT from continuing operations
definition has been updated and defined as the
consolidated profit after tax excluding:
• the effects of economic changes (including
changes to long-term discount rates) as noted
earlier in the report;
• the (non cash) impairment of the asset for
insurance acquisition cash flows (AIACF);
• changes in the loss component that is
predominantly driven by the level premium
business;
• current year timing impacts from assumption
changes on the contractual services margin (CSM);
and
• any costs considered unusual to the Group’s
ordinary activities.
Underlying NPAT from continuing operations
increased 25% to $35.3 million (FY23: $28.2 million)
and fully diluted Underlying EPS increased 25% to
5.50cps (FY23: 4.40 cps).
Underlying NPAT from continuing operations includes
the underlying investment income (the portfolio carry
yield on the investment portfolio and interest rate
earned on physical cash holdings), costs associated
with the incurred claims reinsurance treaties and
interest costs associated with corporate debt and Tier
2 Capital.
Net underlying interest income for the Group
increased to $4.0 million in FY24, increasing from
$2.8 million in the prior year. This was driven by
an increase in the underlying earning rate on the
investment portfolio and interest income on physical
cash, partially offset by the increased costs on the Tier
2 subordinated debt.
Group operating expenses (from continuing
operations) increased to $69.3 million in FY24
(FY23: $64.9 million), up 6.7%. Whilst ClearView has
experienced the impacts of inflation on its cost base
(given a significant portion is head count related), the
increase in the cost base was predominantly driven
by an investment into the key areas of the business as
follows:
• investment in cyber security uplift;
• investment in the IT transformation program (and
related increased software amortisation charge);
• ongoing costs associated with the implementation
of AASB 17; and
• investment in business capability (head count
related).
ClearView has achieved a strong FY24 performance
underpinned by the transformation strategy and
investment in the business.
Directors’ Report
32
ClearView Annual Report 2024
FY24 Reported NPAT
FY24 Reported NPAT decreased to a reported loss of $12.5 million (FY23 reported profit: $8.9 million) and was
adversely impacted by certain items that are not considered meaningful to the Group’s performance or are
considered unusual to the ordinary activities of the business.
Reported NPAT from continuing operations decreased to $4.3 million (FY23: $11.7 million) and fully diluted
Reported EPS decreased 65% to 0.65 cps (FY23: 1.88 cps). The items that are not considered meaningful to the
Group’s performance or are considered unusual to the ordinary activities of the business is outlined in the table
below, with explanations that follow:
FY24 $m
AASB 17
FY23 $m
AASB 17
Reported NPAT
(12.5)
8.9
As per statutory accounts
Reported NPAT from Discontinued
Operations and interest in Centrepoint
Alliance
16.8
2.8
Reported NPAT from Continuing
Operations
4.3
11.7
Economic assumption impact on AASB 17
Liability
2.2
(3.0)
Net economic assumption impact on
disabled lives reserves (DLR)
(0.8)
2.3
Impairment of AIACF
16.3
10.0
Changes in Loss Component
12.2
4.6
Current year timing impacts from
assumption changes on CSM
(2.3)
-
Costs considered unusual to ordinary
activities
3.4
2.6
Underlying NPAT from Continuing
Operations
35.3
28.2
Boards key measure of profitability
and basis on which dividends are
determined
Reported loss from discontinued operations and interest in Centrepoint Alliance (-$16.8 million impact)
Underlying NPAT from continuing operations excludes the impacts from:
• the wealth management businesses that is continued to be treated as a discontinued operation (-$19.6 million);
and
• the equity accounted earnings (to date of sale) and profit on sale of the minority equity stake in Centrepoint
Alliance in November 2023 (+$2.8 million).
Wealth management discontinued operation and exit
The wealth management businesses incurred an underlying operating loss of $4.7 million for the year ended 30
June 2024 (FY23: -$2.7 million) .
Fee income and other related variable costs were impacted by the sale of the investment management business
to Human Financial in the second half of the financial year and therefore included only those related to the
superannuation business under the two remaining life investment contracts (WealthFoundations product) post
completion of the sale.
The wealth management operating expenses are expected to be fully eliminated post completion of the exit.
They are expected to progressively reduce from FY25 as the related services and activities being performed under
the various agreements with Human Financial and ETSL are terminated.
An impairment loss of $10.5 million was recognised in the half year period (FY23: nil) that includes the impairment
of the goodwill allocated to the wealth management segment (-$8.5 million) and the net of tax impairment of
Directors’ Report
ClearView Wealth Limited
33
the front-end wealth portal capitalised software asset
(-$2.0 million). A loss on the sale of CFML was also
recognised in the financial year (-$2.1 million).
Costs related to the exit of the superannuation
business of $2.3 million (FY23: $0.8 million) have also
been separately reported. These include redundancies,
legal fees and consulting costs incurred to date.
Further costs are expected to be incurred to the date
of the exit after which these costs will cease (mainly
related to redundancies and technology exit costs).
Investment in Associate (Centrepoint Alliance)
On 17 November 2023, ClearView announced the sale
of approximately 39.6 million shares in Centrepoint
Alliance to COG Financial Services Limited (COG),
at a share price of 33 cents per share representing
total consideration of $13.1 million. The sale shares
represented approximately 19.9% of Centrepoint
Alliance’s issued capital.
The remaining 8.4 million shares were subsequently
sold on the market from 17 November 2023, at
an average exit price of circa 27 cents per share,
representing total consideration of $2.2 million (net of
costs of sales).
The sale resulted in $2.2 million gain on disposal
(FY23: Nil). ClearView has fully divested the
investment in associate and holds no Centrepoint
Alliance’s shares as at 30 June 2024.
The Centrepoint Alliance transaction has been equity
accounted until the date of sale, contributing $0.6
million in FY24 (FY23: $0.6 million).
Economic assumption impact on AASB 17
liability (-$2.2 million)
This is as a result of changes in the long term discount
rates used to determine the (re)insurance contract
asset/insurance contract liability which is discounted
using market discount rates that typically vary at
each reporting date. ClearView separately reports
this volatility. AASB 17 has materially changed
the sensitivity of reported profit to interest rate
movements.
The impact of the changes in long-term discount rates
on the AASB 17 insurance contract liability in the year
(including the economic effects from assumption
changes), caused an decrease in after-tax profit of
-$2.2 million (FY23: +$3.0 million).
Impairment of AIACF (non-cash) (-16.3 million)
ClearView’s underlying (gross) yearly renewable term
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.
Due to a shorter contract boundary for the stepped
premium business, ClearView recognises the directly
attributable insurance acquisition costs over the longer
term by raising an asset for insurance acquisition cash
flows on Balance Sheet, related to the future renewals
of the yearly renewable term business.
Premiums that are collected over the life of the
insurance contract include an allowance for the
recoverability of the acquisition costs incurred. The
AIACF is amortised based on the present value of
premiums and is written off over the life of a stepped
premium contract.
The onerous contract (and related impairment) testing
of the AIACF is more granular under AASB 17 and as
such impairment (over and above the amortisation)
may lead to material reported profit impacts, although
there is no change in the annual cash flows of a policy
and is therefore recoverable from the cash flows at a
portfolio level (subject to lapse risk).
As such, the AIACF impairment reflects a (brought
forward) timing difference in the write off of the asset
and changes the pattern and timing of the reported
profit release over the life of a stepped premium
policy.
The increased claims assumptions (for income
protection and TPD products) impacted the AIACF
impairment (and loss recognition) in FY24. This
is driven by a timing delay (between periods) in
increasing premium rates to cover these increased
costs (that has not been allowed for in the valuation).
The further phase of the gross premium repricing cycle
in CY25 is likely to result in the AIACF impairment
(and the loss recognition) partially reversing in FY25
(given this is a timing variant to the premium rate
increase).
The non-cash impairment is separately removed from
Underlying NPAT given that the cash flow collection
and recoverability on the portfolio as a whole remains
unchanged and reflects a timing in the release of
profit. The Underlying NPAT is adjusted to ensure
the AIACF that is amortised does not reflect any
impairments post the transition date of 1 July 2022.
The impact of the impairment of the AIACF in the year,
caused a decrease in after-tax profit of -$16.3 million
(FY23: -$10.0 million).
Change in loss component (loss recognition)
(-$12.2 million)
Given the level of granularity of reporting (and
onerous contract assessment) under AASB 17, the loss
component (and related loss-recovery component)
has been separately reported to remove the upfront
Directors’ Report
34
ClearView Annual Report 2024
loss recognition (net of loss recovery) from underlying
earnings, in particular the capitalised effect on level
premium business that is no longer cross subsidised
under AASB 17.
As noted above, the loss component (net of loss
recovery) was impacted by the changes made to the
claims assumptions in FY24. The net impact of the loss
recognition in the year, caused a decrease in after-tax
profit of -$12.2 million (FY23: -$4.6 million).
Net economic assumption Impact on disabled
lives reserves (DLR) (+$0.8 million)
The 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).
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 mandated PIMCO to manage the
shareholder funds that relate to the insurance liabilities
(including inflation), claims and capital reserves and
surplus capital in the life company.
The impact on earnings from changes in investment
market values has also been reported below the line
(underlying earning rate on the portfolio is reported
as part of underlying NPAT). This resulted in an overall
net increase after-tax profit of +$0.8 million (FY23:
-$2.3 million).
Current year timing impacts from assumption
changes on the contractual service margin (+$2.3
million)
As noted elsewhere in the report, certain assumptions
have been updated at 30 June 2024. Whilst the overall
impact of these assumption changes is adverse, under
AASB 17 certain timing issues arise whereby the
impact on reinsurance profits is recognised faster than
the reduction to profit on gross contracts. In FY24,
this has resulted in a profit being recognised in the
first year of the assumption change. This is due to two
factors:
1
The pattern of coverage units which are used
to release the CSM into profit results in earlier
recognition of reinsurance profit or loss than for
gross contracts; and
2 In the first year of any assumption change, the
impact on gross contracts is lower than the impact
on reinsurance contracts due to the different
contract boundaries.
Whilst the total impact from the assumption changes
on the contractual services margin in FY24 was
$5.0 million, the current year timing impacts from
assumption changes on the contractual services
margin was +$2.3 million (FY23: Nil). This has been
excluded from Underlying NPAT, but included in
reported profit.
Costs unusual to ordinary activities (-$3.4
million)
Other costs of $3.4 million (after tax) expensed
include:
• IT transformation costs of $2.7 million - these
relate to the Life Insurance IT transformation
project (the transformation and duplicate system
costs associated with the implementation of the
technology platform), that are considered costs
unusual to the ordinary activities (FY23: $1.6
million). The costs of migration will be incurred
over the next 12-18 months, subsequent to which
the operational efficiencies are expected to be
achieved from (and the transformation project will
then be completed);
• Other costs of $0.6 million (FY23: $1.0 million)
related to the restructure and strategic review costs
that have ceased.
ClearView Wealth Limited
35
Operating
segment review
Directors’ Report
36
ClearView Annual Report 2024
FY24 Results segment analysis
Life Insurance result
The Life Insurance result is outlined in the tables below:
12 Months to June 2024 ($M)1
2023
(restated)
2024
%
1H
2H
FY23
1H
2H
FY24
Change2
Gross life insurance premiums
160.0
165.2
325.1
178.0
180.1
358.1
10%
Interest income
4.2
5.8
10.0
6.4
6.2
12.6
26%
Interest expense on Tier 2
(1.3)
(1.4)
(2.7)
(1.5)
(1.6)
(3.1)
15%
Claims incurred (gross)
(66.2)
(66.6)
(132.8)
(84.1)
(91.9)
(176.0)
33%
Reinsurance recoveries
46.6
48.3
94.9
61.5
66.3
127.8
35%
Reinsurance premium expense
(61.3)
(61.9)
(123.2)
(64.1)
(66.1)
(130.2)
6%
Commission & other variable costs
(33.4)
(35.3)
(68.7)
(41.0)
(41.3)
(82.3)
20%
Operating expenses
(30.5)
(33.2)
(63.7)
(34.1)
(33.8)
(67.9)
7%
Movement in insurance contract
liability
2.9
3.9
6.8
6.5
10.9
17.4
Large
Income tax (expense) / benefit
(6.3)
(7.4)
(13.7)
(8.3)
(8.6)
(16.9)
23%
Life Insurance Underlying NPAT
14.7
17.4
32.1
19.4
20.1
39.5
23%
Life Insurance Underlying NPAT increased by 23% to $39.5 million (FY23: $32.1 million) and Underlying NPAT
margin increased to 11.0% (FY23: 9.9%). The business has continued to deliver above system growth in market
share and in-force premiums. Other key drivers of the strong FY24 result include:
• benefits from inflation linked premiums;
• overall positive underlying lapse performance relative to expectation;
• continued repricing of the LifeSolutions in-force portfolios to take into account the impacts of experience and
prior period changes in reinsurance costs;
• benefits of the transformation strategy starting to flow through; and
• an increased interest rate environment (relative to the prior year).
1
Inter-segment revenues/expenses are not eliminated in the managements view.
2
% change represents the movement from FY23 to FY24.
Directors’ Report
ClearView Wealth Limited
37
ClearView continues to focus on its financial disciplines to achieve its target Underlying NPAT margin range:
Chart 4: Life Insurance Underlying NPAT profit growth
FY24
FY23
FY24: 11.0%
FY24 2H
FY24 1H
FY23 2H
FY23 1H
160
14.7
165.2
Gross Premium
Life Insurance Underlying NPAT
Underlying NPAT margin
17.4
178
19.4
180.1
20.1
Life Insurance Underlying NPAT1 ($m) Margin2 (%)
FY23: 9.9%4
Life Insurance
Underlying NPAT
margin2
11-13%
FY26
Target3
325.2
32.1
358.1
39.5
9.2%
10.5%
10.9%
11.2%
1
Life Insurance Underlying NPAT has been defined as the life insurance profit after tax excluding the effects of economic changes on both
the AASB 17 insurance contract liability and the incurred income protection disabled lives reserves, the (non-cash) impairment of the asset
for acquisition cash flows (AIACF), changes in the loss component that is predominantly driven by the level premium business, current year
timing impacts of assumption changes on the contractual services margin and any costs considered unusual to the Group’s ordinary activities.
Underlying NPAT includes the amortisation of capitalised software and leases, underlying investment income (the portfolio carry yield on the
investment portfolio and interest rate earned on physical cash holdings), costs associated with the incurred claims reinsurance treaties and
interest costs associated with corporate debt and Tier 2 Capital.
2
Is calculated as Life Insurance Underlying NPAT divided by Gross Premium Income.
3
FY26 goals based on AASB 17 FY25-27 business plan forecasts approved by the Board on 16 July 2024.
4 2H FY24 Underlying NPAT margin restated to 10.5% (from 10.1%) to remove impacts on Underlying NPAT from changes in claims assumptions
in FY23 to ensure consistency between periods. FY23 total margin restated to 9.9% (from 9.7%)
Directors’ Report
38
ClearView Annual Report 2024
The Underlying Life NPAT margin of 11.0% (FY23: 9.9%)
is at the lower end of the FY26 11-13% target range.
However, the materially improved margin in FY24 (+110
bps) reflects interest rate changes between periods,
the strong business momentum and benefits of the
transformation program. An improving target margin
(over time) is driven by scale benefits, increased
exposure to underwriting risk for new business (from 1
October 2023) and the operational efficiency savings
from the IT investment aligned to the technology
platform implementation schedule.
The FY24 Underlying NPAT margin was adversely
impacted by claims experience (in particular income
protection and TPD claims costs). Overall, the portfolio
as a whole reported a claims experience loss of $4.3
million after tax.
The year end claims reserving included the increase
in the incurred but not reported claims delay
assumptions, in particular for TPD claims aligned to the
actuarial claims experience studies. This was offset by
the impacts of assumption changes on the contractual
services margin and a reduction in the claims
provisions (in particular a release of the COVID-19
provision and reduction in the reopen provision for
income protection claims that is assessed at each
reporting period).
The actuarial assumptions on the long-term income
protection and TPD claims were also strengthened
to allow for the increased claims costs. There was a
partial offset through the reduction in trauma and non
advice (closed to new business) claims assumptions.
This (together with a further gross premium repricing
cycle in CY25 across the relevant products) has been
allowed for in the FY26 target margin range of 11% -
13%.
ClearView has continued its investment in claims
capability, rehabilitation programs and other
initiatives to support return to work outcomes.
ClearView continues to closely monitor the TPD
claims experience. The claims capability, investment
(including for TPD claims) and focus provides
confidence in the ability to deliver with the FY26
target margin range.
The FY24 result includes a lapse experience profit of
$0.9 million. Lapses have been better than the industry
but there has been a more recent increased trend
in lapse rates across the industry given the higher
interest rate environment and cost of living pressures
in a post COVID environment.
ClearView’s target market and funding of premiums
from superannuation (circa 40% of the advice in-force
portfolios) are a risk mitigant to the increased trend
albeit affordability (interest rate increases and impacts
on household budgets) continues to be closely
monitored in the current economic environment.
The long term actuarial lapse assumptions were
broadly reshaped as at 30 June 2024 with the related
flow on impacts to the results.
Industry participants continue to increase prices
on their in-force portfolios. The final phase of the
initial staggered price increases from the reinsurance
price increases and material changes to the claims
assumptions based on experience in 2020 has been
implemented from 1 January 2024.
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).
ClearView increased its exposure to underwriting risk
for new business from 1 October 2023. This confidence
to increase the underwriting risk exposure is due to
the increased size of the in-force portfolios, improved
Group capital position and product sustainability
measures seen in the Group’s more recent financial
performance.
Reinsurance price changes on the LifeSolutions in-
force portfolio continue to be monitored closely.
Directors’ Report
ClearView Wealth Limited
39
Listed/Group result
The Listed/Group Underlying NPAT3 of the listed/group segment recognised a loss of $4.2 million (FY23: loss of
$3.9 million):
12 Months to June 2024 ($M)1
2023
2024
%
1H
2H
FY23
1H
2H
FY24
Change2
Interest Income
0.4
0.6
0.9
0.8
0.6
1.4
56%
Interest on debt & facility fees
(2.6)
(2.8)
(5.4)
(3.4)
(3.5)
(6.9)
28%
Operating expenses
(0.8)
(0.4)
(1.2)
(0.6)
(0.7)
(1.3)
8%
Income tax (expense) / benefit
0.9
0.9
1.8
1.1
1.6
2.7
50%
Listed Underlying NPAT from
continuing operations
(2.1)
(1.8)
(3.9)
(2.1)
(2.1)
(4.2)
8%
The listed/ group segment earns interest on its physical cash holdings and pays interest on corporate debt.
Corporate debt includes the loan establishment and interest costs on the Debt Funding Facility and the $75
million subordinated, unsecured Tier 2 notes. An additional $15 million was drawn down under the Debt Funding
Facility in the year to partly fund the FY23 final cash dividend.
The costs associated with maintaining a listed entity have remained broadly consistent period to period. These
costs include directors fees, investor relations expenses, insurance, audit fees and other related costs.
1
Inter-segment revenues/expenses are not eliminated in the managements view.
2
% change represents the movement from FY23 to FY24.
3
Underlying NPAT (from continuing operations) has been defined as the consolidated profit after tax excluding the effects of economic
changes on both the AASB 17 insurance contract liability and the incurred income protection disabled lives reserves, the (non-cash)
impairment of the asset for acquisition cash flows (AIACF), changes in the loss component that is predominantly driven by the level premium
business, current year timing impacts of assumption changes on the contractual services margin and any costs considered unusual to the
Group’s ordinary activities. Underlying NPAT includes the amortisation of capitalised software and leases, underlying investment income (the
portfolio carry yield on the investment portfolio and interest rate earned on physical cash holdings), costs associated with the incurred claims
reinsurance treaties and interest costs associated with corporate debt and Tier 2 Capital.
Directors’ Report
40
ClearView Annual Report 2024
Statement of financial position
The Group’s statement of financial position is set out on page 79.
Net assets at 30 June 2024 decreased to $353.2 million (30 June 2023: $393.4 million) or net asset value per
share to 54.2 cents per share (30 June 2023: 55.5 cents per share). The decrease in net assets is driven by:
• the reported loss of $12.5 million for the year as noted earlier in the report (FY23: reported profit of $8.9
million); and
• the payment of both the FY23 final and HY24 interim cash dividends of $29.7 million in the financial year.
ClearView is capitalised with Common Equity Tier 1 capital and Tier 2 capital.
The shareholder view of the Balance Sheet at 30 June 2024 reflects:
• Shareholder cash and investments position of $523.6 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 $418.1 million - includes the $31 million drawn down under the Debt
Funding Facility and the Tier 2 subordinated debt on issue ($74.5 million net of costs). The $15.2 million
proceeds from the sale of the investment in Centrepoint Alliance and an additional $15 million that was drawn
down under the Debt Funding Facility was used to fund the cash dividend payments made during the year.
• The goodwill allocated to the life insurance cash generating unit ($4 million) is tested for impairment triggers
using the embedded value methodology. This compares the carrying value of goodwill to the in-force
portfolios written to date. The goodwill allocated to the wealth management cash generating unit ($8.5
million) has been fully impaired in the year.
• Carrying value of the intangibles related to capitalised software costs ($31.7 million) and includes the
amounts recognised in respect of the customisation and configuration costs incurred in implementing the
SaaS arrangements for the technology platform ($24.6 million). The capitalised software that was previously
included in assets held for sale has been fully impaired in the year ($2.9 million).
• The life insurance contract liability includes the changes under AASB 17 and have been reported and classified
as outlined in the financial report; and
• The AIACF for the stepped premium business ($280.8 million) is reflected on Balance Sheet and converts to
cash as the future premiums are collected (subject to lapse risk).
Directors’ Report
ClearView Wealth Limited
41
Capital position
The following table reflects the net capital position of the Group as at 30 June 2024:
Life
Wealth
Other
APRA
Regulated
Entities
NOHC3/
Other
Group
$M
$M
$M
$M
$M
$M
Net assets at 30 June 20241
372.9
8.5
0.4
381.8
(28.6)
353.2
Intangible adjustments2
—
—
—
—
(20.3)
(20.3)
Net assets after intangible adjustments
372.9
8.5
0.4
381.8
(49.0)
332.8
Capital Base Adjustment:
Insurance contract liability
(239.2)
—
—
(239.2)
—
(239.2)
DTA adjustments
(37.4)
(2.3)
—
(39.8)
(4.2)
(43.9)
Tier 2 Capital4
30.0
—
—
30.0
45.0
75.0
Regulatory Capital Base
126.3
6.2
0.4
132.8
(8.2)
124.7
Prescribed Capital Amount
(20.6)
(3.7)
—
(24.4)
—
(24.4)
Available Enterprise Capital
105.6
2.4
0.4
108.5
(8.2)
100.3
Risk Capital
(60.4)
(2.3)
—
(62.6)
(10.6)
(73.2)
Net capital position
45.3
0.2
0.4
45.8
(18.8)
27.1
The net surplus capital position of the Group above internal benchmarks is $27.1 million and represents a decrease
of $0.4 million since the prior year, predominantly driven by:
• the payment of the FY23 final and HY24 interim cash dividends (-$29.7 million):
• the capital benefit from the sale of the investment in Centrepoint Alliance (+$5.2 million);
• the release of capital from the sale of CFML (+$5.9 million);
• given the simplicity and core focus of the business on life insurance, a reduction in the target risk capital and
related items (+$20.3 million); and
• The net impact of the capital generation, underlying regulatory and target capital increases due to the growth
in the business and costs considered unusual to the ordinary course of business (-$2.1 million).
The capital position is stated prior to any further capital release or costs from the exit of the wealth management
business due to the unwind of the life investment contracts on completion by ETSL of the SFT of the CRP or any
cash component of the FY24 final dividend.
Subsequent to its retirement as the trustee of the CRP, CLN is no longer an operating entity and is therefore no
longer required to hold the capital previously held by it (Operating Risk Financial Requirement - ORFR). Aligned
to the transition of the trustee, the listed entity has entered into arrangements with the EQT group to provide
ORFR funding of $3.5 million to ETSL until the SFT is completed ($3.25 million has been drawn down by ETSL
under the terms of the agreement).
1
Net Assets as at 30 June 2024 excluding Employee Share Plan Loans. Net assets includes the asset for insurance acquisition cash flows
(AIACF) component of insurance contract liabilities and right of use asset arising from leases.
2
Intangible adjustments relate to goodwill and capitalised software (excluding 50% of the capitalised software held in the administration
entity). It also includes the removal of $0.5 million of capitalised costs in relation to the Tier 2 capital raising.
3
NOHC is a non operating holding company regulated by APRA under the Life Insurance Act.
4
ClearView raised $75m of Tier 2 subordinated notes in November 2020.
Directors’ Report
42
ClearView Annual Report 2024
Chart 5: Capital position as at 30 June 2024 ($M)
(20.3)
75.0
(97.6)
353.2
(283.2)
Regulatory
capital base
Tier 2
capital
Net assets
Less:
intangible
adjustments
Less:
capital base
adjustments
Less:
reserved
capital1
Net capital
position
124.7
27.1
The capital position reflects:
• The net assets of $353.2 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 $20.3 million are deducted from the net assets and includes goodwill ($4 million),
capitalised software ($15.8 million) and costs associated with Tier 2 raising ($0.5 million). Given that the
capitalised software is held in the shared services entity, 50% of its carrying value is deducted for capital
purposes.
• Capital base adjustments reflects the difference between the adjusted insurance contract liabilities held for
capital purposes and the insurance contract liabilities held under AASB 17. This predominantly reflects the
removal of the deferred acquisition cost asset (AIACF) that is not permitted to be counted in the regulatory
capital base under the APRA capital standards.
• The capital base adjustment also includes the removal of any deferred tax assets that cannot be included
under the standards. As a result of the transition to AASB 17, the Group’s accounting net life insurance contract
liability, for which the carrying amount will be settled in future periods has increased. This results in an increase
in the deductible temporary differences and a related deferred tax asset of $35.9 million, given the movement
in the net life insurance contract liability is deductible when settled in the future. While the Australian Taxation
Office (ATO) and Treasury has yet to provide any announcement or guidance in respect of the AASB 17
impacts on life insurance companies, there is no indication that AASB 17 will result in a change to the income
tax laws. As these temporary differences create income tax losses on transition and that it is probable that
the Group’s future taxable profit will be available against which the tax losses can be utilised, the additional
deferred tax asset of $35.9 million has been recognised on balance sheet on transition. Total Group deferred
tax asset (related to Group carried forward losses) of $43.8 million is held on Balance Sheet as at 30 June
2024. The tax benefit should be realised in future periods as the losses are utilised.
• 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
$124.7 million.
1
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.
Directors’ Report
ClearView Wealth Limited
43
• Reserved capital includes any APRA supervisory adjustment for CLAL as required by APRA as part of the IDII
sustainability measures (phase 1 of which has been successfully completed in the financial year).
• 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 2024.
• As a result of limits under the incurred claims treaty, ClearView continues to hold a irrevocable letter of credit
issued by a major Australian bank on behalf of Swiss Re with a dollar limit on the letter of credit of $70 million
as an additional risk mitigation over the medium term to further reduce any likelihood of concentration risk
exposure. The terms of the letter of credit were updated to align to the revised LPS 117 standard.
• Fitch continues to assign ClearView with 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 FY20:
Chart 6: Life insurance underlying before tax capital generation
FY24
FY23
FY22
FY21
FY20
48.2
86.2
Life Insurance Underlying Before Tax3 Capital Generation1 - $m
New Business Captial Utilisation
Underlying NBPT and In-force Generation
Net Generation Before Tax
43.3
50.3
69.3
-40.1
-29.5
-38.8
-42.9
-54.2
26.4
8.1
13.8
11.5
32.0
•
ClearView’s life insurance business has generated $86.2 million (before tax) of underlying capital from its in-
force portfolios prior to reinvestment in new business and the multi year IT transformation project.
• New business capital utilisation is predominantly related to the upfront policy acquisition costs2 of a policy–
the capital strain varies between periods and is dependent on new business volumes. Each year, these
acquisition costs are recovered via premiums and is repaid over the life of the policy (subject to lapse risk).
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. Life Insurance business only – excludes listed segment.
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.
3
Life Insurance Underlying NPAT has been defined as the life insurance profit after tax excluding the effects of economic changes on both
the AASB 17 insurance contract liability and the incurred income protection disabled lives reserves, the (non-cash) impairment of the asset
for acquisition cash flows (AIACF), changes in the loss component that is predominantly driven by the level premium business, current year
timing impacts of assumption changes on the contractual services margin and any costs considered unusual to the Group’s ordinary activities.
Underlying NPAT includes the amortisation of capitalised software and leases, underlying investment income (the portfolio carry yield on the
investment portfolio and interest rate earned on physical cash holdings), costs associated with the incurred claims reinsurance treaties and
interest costs associated with corporate debt and Tier 2 Capital.
Directors’ Report
44
ClearView Annual Report 2024
• 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 period.
• The Group has a PCA capital coverage ratio of 5.1 times at 30 June 2024, reflecting the strength of the overall
capital position of the Group.
Chart 7: Group Regulatory Capital Coverage ($M)
Prescribed Capital Amount
Regulatory Capital Base
124.7
24.4
PCA ratio
of 5.1x
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. It is intended that the target payout ratio of 40%-
60% will be uplifted post completion of the IT transformation investment and wealth management exit to 50%-
70% of Underlying NPAT subject to the capital requirements of the business at the time.
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
• Ensure transparent communication to the market around Embedded Value estimation and its relationship to
the prevailing share price.
A FY23 fully franked final cash dividend of $19.8 million, equating to 3 cents per share was paid on 22 September
2023. This represented an increase of 50% on the prior year.
A FY24 fully franked interim cash dividend of $9.9 million, equating to 1.5 cents per share was paid on 22 March
2024, the first time an interim dividend has been paid.
The Board has declared (on 21 August 2024), a fully franked FY24 final dividend of $11.1 million, equating to 1.7
cents per share, with a record date of 5 September 2024 (FY24 final dividend is payable on 20 September 2024).
1
Underlying NPAT (from continuing operations) continues to be adopted by the Board as its key measure of Group profitability and basis for
dividend payment decisions. It is used as a non IFRS measure of earnings that excludes the impacts of market and interest rate volatility,
with the definition updated to reflect the application of AASB 17. Underlying NPAT (from continuing operations) has been defined as the
consolidated profit after tax excluding the effects of economic changes on both the AASB 17 insurance contract liability and the incurred
income protection disabled lives reserves, the (non-cash) impairment of the asset for acquisition cash flows (AIACF), changes in the loss
component that is predominantly driven by the level premium business, current year timing impacts of assumption changes on the contractual
services margin and any costs considered unusual to the Group’s ordinary activities. Underlying NPAT includes the amortisation of capitalised
software and leases, underlying investment income (the portfolio carry yield on the investment portfolio and interest rate earned on physical
cash holdings), costs associated with the incurred claims reinsurance treaties and interest costs associated with corporate debt and Tier 2
Capital.
Directors’ Report
ClearView Wealth Limited
45
The total dividends paid in respect of the FY24 financial year is therefore 3.2 cents per share, up 7% on the prior
year and represents a dividend yield of 5.5% based on a 90 day VWAP share price at 30 June 2024 of $0.5772 per
share. The dividend uplift of 7% (compared to the prior year) lags the growth in Underlying NPAT due to adoption
of the new accounting standard (prior year dividend was calculated on old basis).
The FY24 total payout ratio is 60% of Underlying NPAT (from continuing operations) – at the top end of the target
payout ratio range.
The Company’s Dividend Reinvestment Plan (DRP) will be reinstated and operate for the FY24 final dividend in
accordance with the DRP rules below:
• Shareholders will have the opportunity to reinvest into the growth ambitions of the Company while retaining
capital within the Group;
• Given the current liquidity of ClearView’s share trading, it is not considered appropriate to minimise the dilutive
impact of the DRP through the on-market purchase of the number of shares to satisfy the DRP participation;
and
• It is also not the intention to seek support for any shortfall in shareholder participation by underwriting the
shortfall to maintain the capital base within the group given that the Group is now in a net capital generation
position.
Shares under the DRP will be issued at a fixed price of $0.59, consistent with ClearView’s DRP rules.
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.
Employee buy-back of Executive Share Plan shares
In the year ended 30 June 2024, there were a further 8,523,505 Executive Share Plan shares held by employee
participants that have been forfeited and bought back in accordance with the rules of the plan.
Directors’ Report
46
ClearView Annual Report 2024
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.
The Life Insurance EV (including franking credits) increased 9.4% in the year to $608.1 million.
The EV for the wealth management business ($3.1 million) continues to be reflected at net assets as at 30 June
2024 (included in the net worth).
The net assets of the Listed segment that is reported in the EV reduced to -$20.1 million, driven by the payment of
the cash dividends totaling $29.7 million in the financial year.
A risk free rate of 4.0% has been adopted for the purposes of the EV calculations at 30 June 2024 (30 June 2023:
4.0%).
The EV has been prepared on a consistent basis with prior reported periods, without any allowance in the future
projections for the changes to the tax cash flow given the change in the timing of the pattern of profit release
under AASB 17.
The EV is discussed in further detail below.
EV calculations at a range of risk discount margins (DM) is shown below.
Discount rate
Risk margin over risk free rate
($M), (unless otherwise stated)
3% dm
4% dm
5% dm
Life insurance
522.7
502.3
462.3
Value of In Force (VIF)
522.7
502.3
462.3
Net worth
6.3
6.3
6.3
Total EV
529.0
508.6
468.6
ESP Loans
0.9
0.9
0.9
Total EV including ESP Loans
529.9
509.5
469.5
Franking Credits @ 70%:
Life Insurance
79.9
75.3
71.3
Net worth (accrued franking credits)
6.3
6.3
6.3
Total Franking Credits
86.2
81.6
77.6
Total EV including ESP loans and franking credits
616.1
591.1
547.1
EV per Share including ESP Loans (cents)
81.9
78.8
72.6
EV per Share including ESP Loans and Franking Credits (cents)
95.2
91.4
84.6
Directors’ Report
ClearView Wealth Limited
47
Chart 8: EV movement waterfall
EV - 30 Jun 2023 @4% dm
EV - 30 June 2023 @4% dm (restated)
Dividends paid
Expected gain
Value of new business added
Impact of claims experience
Impact of discontinued operation
Investment experience
Net change in assumptions and other impacts
Impact of insurance lapses and inflation
Maintenance expense experience
EV - 30 June 2024 @4% dm
Listing and other costs
Changes in ESP loans, franking credits and other
Effect of change in discount rates and tax impacts
38.2
(0.2)
(8.2)
(4.3)
4.2
(1.4)
(0.9)
5.6
6.9
(1.8)
(29.7)
587.0
557.3
591.1
(4.3)
The key movements in the EV between 30 June 2023 and 30 June 2024 are described in detail below.
FY23 Final Dividend and HY24 Interim Dividend (-$29.7 million)
• The EV is reduced by the final FY23 cash dividend (-$19.8 million) and introduction of the FY24 interim cash
dividend (-$9.8 million), both of which were paid in the financial year.
• The EV is stated prior to the cash component of the FY24 final dividend (-$11.1 million) that will be paid in
September 2024, noting that the DRP will be reinstated.
• The net impact of the capital transfers between segments includes the $5.9 million capital benefit from the
sale of CFML in the listed segment.
Expected Gain (+$38.2 million)
• The expected gain represents the unwind of the discount rate within the value of the life insurance in-force
portfolio and the investment earnings on the net worth.
Value of New Business (-$0.2 million)
• The VNB has improved (over time) driven by the stepped change in new business without the related material
stepped increase in fixed acquisition costs.
• The ClearView ClearChoice product is benefiting from the broader reset of the industry, and an increased focus
on sustainability.
• ClearView’s sales increased by 34% to $33.7 million in FY24 and is now achieving a circa 11% market share in
the IFA market, up from 9% in FY23.
• The VNB is broadly neutral for the year and is achieving a circa 8% after tax return on capital based on the
business mix achieved.
Directors’ Report
48
ClearView Annual Report 2024
Impact of Discontinued Operations and interest
in Centrepoint Alliance (-$8.2 million)
• It includes the earnings attributable to the interest
in Centrepoint Alliance including the profit on the
sale of the investment (+$2.8 million).
• It also includes the net impacts of the wealth
management business (-$11.1 million) made up of
the Underlying NPAT operating loss, the loss on
sale of CFML, the net of tax impairment of the
front-end wealth portal capitalised software asset
and exit costs incurred. The goodwill impairment
does not impact the EV calculations.
Life Insurance Claims (-$4.3 million)
• Underlying adverse claims performance (relative
to assumptions) resulted in a reduction in the EV in
FY24. The claims performance was driven by higher
than expected incidence on the income protection
and TPD products.
• ClearView has continued its investment in claims
capability, rehabilitation programs and other
initiatives to support return to work outcomes.
• The actuarial assumptions on the long-term income
protection and TPD claims were strengthened to
allow for the increased claims costs. There was
a partial offset through the reduction in trauma
and non advice (closed to new business) claims
assumptions.
• See further commentary on claims experience for
the year on page 37.
Lapses and inflation impacts (+$4.2 million)
• For the year, lapses have been largely in line with
expectation for the advice business including
allowances for the re-pricing of the portfolios.
• Inflation linked premiums for the year have been
materially higher than expected given both the
inflation rate and take up of the indexed benefit by
customers.
• Superannuation is a significant funding source of
life insurance and the relatively low unemployment
rate has supported both the inflation take up rate
as well as the lapse performance of the business.
• The interest rate increases and impacts on
household budgets will continue to be closely
monitored.
• See further commentary on lapse experience on
page 37.
Maintenance Expenses (-$1.4 million)
• The actual maintenance overrun of $1.4 million is
driven by investment into key areas of the business
as noted earlier in the report.
• The key focus is on the technology transformation
to enable operational efficiencies, scale benefits
and enhanced data and analytics.
• 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 the 1H FY26.
Net Investment Experience (-$0.9 million)
• This reflects the investment return benefit relative
to underlying earning rate of 4% adopted in the EV
calculations. This was offset by the interest cost of
the corporate debt and Tier 2 subordinated loans
that is not allowed for in the EV calculations.
Other expense Impacts (-$4.3 million)
Overall the 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
(-$0.9 million after tax); and
• Costs considered unusual to the ordinary activities
including those recognised in relation to the
strategic review and information technology system
costs (-$3.4 million).
Net change in assumptions and other impacts
(+$6.9 million)
• The long-term actuarial assumptions on the income
protection and TPD claims were strengthened to
allow for the increased claims costs.
• The long term actuarial lapse assumptions were
broadly reshaped as at 30 June 2024.
• These assumption changes (together with a
further gross premium repricing cycle in CY25
across the relevant products to cover these
assumption changes) have been allowed for in the
EV calculations at 30 June 2024. Assumptions
used in the EV are consistent with best estimate
assumptions in the statutory insurance contract
liability valuation, with the exception of the
assumed CY25 repricing noted above.
• Other impacts include the reduction in the target
risk capital and related items given the simplicity
and core focus of the business on life insurance (as
noted earlier in the report).
Directors’ Report
ClearView Wealth Limited
49
Effects of changes in discount rates and tax impacts (+$5.6 million)
• Includes the impact of changes in the discount rates on the income protection claims reserves and related
projected cost in the EV calculations.
• Includes the tax related and timing benefit in FY24 from the impacts of the change in assumptions on the
AIACF impairment and changes in the loss component.
Franking credit, ESP loan and other changes (-$1.8 million)
• The franking credit movement effectively reflects the impact of movements in the value of future tax
payments, noting the reduction in the franking account balance due to the payment of the fully franked
dividends during the year.
• Given non-recourse nature of the ESP loans, $0.9 million is considered as part of the EV calculations at 30
June 2024 (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 57.74 cents per share at 30 June 2024, of the remaining 6.1 million ESP shares on issue (and
included in the total shares on issue of 651.0 million), 2.1 million ESP shares are considered to be in the money with a ESP loan recoverable
balance of $0.9 million. 4.0 million out of the money ESP shares could therefore be bought back, thereby reducing the shares on issue to
647.0 million shares. As such, $0.9 million of ESP loans have been added to the net assets and 647.0 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 2.6 million treasury shares, a further 9.1 million
performance and restricted rights can be converted into ordinary shares - these have been excluded for the purposes of the calculation.
Chart 9: Embedded Value sensitivity analysis @ 4%DM
Claims +10%;-10%
Discontinuance Rates +1%;-1%
Expenses +10%;-10%
Risk-free rate +1%;-1%
Inflation -0.5%;+0.5%
-30
-20
-10
0
10
20
30
-4.9
-19.9
-13.8
-16.2
-30.4
5.0
22.1
13.8
18.0
30.4
Industry Outlook
• The Australian life insurance market is increasingly attractive with an improved regulatory outlook, structural
reforms (in line with the changes to design and pricing of income protection policies) and a significant
underinsurance gap.
• There has also been significant market consolidation by the larger multinational players.
• There has been significant change across the industry due to the implementation of the new accounting
standard, AASB 17.
Directors’ Report
50
ClearView Annual Report 2024
Operational Outlook
• ClearView’s strategic focus has shifted back to growth underpinned by the launch of the ClearView
ClearChoice product in 1H FY22 and supported by the business transformation program.
• The ClearView ClearChoice product is a beneficiary from the broader reset of the industry and an increased
focus on sustainability.
• ClearView’s core focus has been on business simplification (including leveraging technology to improve access
and fulfillment) and uplifting capability through data and analytics allowing for deeper insights.
• Significant progress has been made in the year with regard to the exit from the wealth management business
and the full exit from financial advice through the sale of the minority equity interest in Centrepoint Alliance.
This is aligned to the core strategy to focus on life insurance.
• The continued implementation of the IT transformation strategy remains a key driver to achieve scale and
efficiency benefits of the multi year technology investment - these operational benefits are expected to start
to progressively flow through from the successful completion of the in-force policy migration (target 1H FY26).
• ClearView’s resilient business model is underpinned by a large in-force and growing annuity style revenue base,
coupled with price increases and inflation-linked premiums that is expected to continue to substantially offset
cost inflation pressures.
• ClearView has continued to increase its new business market share, seeking to optimise insurance margins.
• Continued outperformance in profitable segments is a key initiative.
Financial Outlook
• The strong FY24 life insurance result reflects the further growth in new business market share to 11% (up from
5% in FY21) and improving margins.
• Life Underlying NPAT margin of 11% was achieved in FY24, which is operating at the bottom end of the FY26
target Underlying NPAT margin range of 11% - 13%.
• The near-term economic outlook remains cautious given pressures on household budgets. Overall lapse rates
remained largely in line with expectation in FY24, noting superannuation is a significant funding source of life
insurance.
• ClearView has a strong Balance Sheet and capital base - the net assets are backed by cash and highly rated
securities.
• The net surplus capital position of the Group above internal benchmarks is $27.1 million at 30 June 2024 and is
stated prior to the payment (cash component) of the FY24 final dividend of $11.1 million.
• The surplus capital position and future business capital generation is anticipated to fund the net capital
expenditure impacts of the continued technology investment over the remaining transformation period (12-18
months).
• The forecast capital generation allows for progressive increased new business generation (and market share)
and a further phase of the gross premium repricing cycle in CY25 to cover the increased claims and (if
applicable) reinsurance costs across the products that had adverse experience.
• A final fully franked FY24 dividend of 1.7 cents per share was declared, bringing the total dividend for the FY24
year to 3.2 cents per share, up 7% on the prior year.
• The Group’s dividend policy remains unchanged at 40%-60% of Underlying NPAT. The target payout ratio is
intended to be uplifted post completion of the IT transformation, investment and wealth exit to reflect the
capital generation position of the business.
Directors’ Report
ClearView Wealth Limited
51
• Key FY26 Life insurance targets remain unchanged as follows:
FY26
Goals3
New Business
Market Share1
12-14%
In-force Premium
Market Share1
~4%
Life Insurance
Underlying
NPAT4 Margin2
11-13%
40-60%
of Underlying NPAT
Gross
Premiums
$400m
Dividend
Policy
• Underlying NPAT (from continuing operations) continues to be adopted by the Board as its key measure of
Group profitability and basis for dividend payment decisions. It is used as a non IFRS measure of earnings that
excludes the impacts of market and interest rate volatility, with the definition updated to reflect the application
of AASB 17.
• Underlying NPAT from continuing operations is targeted to continue to grow at double digits, as previously
communicated to the market.
1
ClearView calculations based on NMG Risk Distribution Monitor Reports for Retail Advice New Business and In-force Analysis – NMG Market
analysis includes total of 'Retail' consistently applied (that is, IFA, Bank Advice and Aggregator channels).
2
Is calculated as Life Insurance Underlying NPAT divided by Gross Premium Income.
3
FY26 goals based on AASB 17 FY25-27 business plan forecasts approved by the Board on 16 July 2024.
4
Underlying NPAT (from continuing operations) continues to be adopted by the Board as its key measure of Group profitability and basis for
dividend payment decisions. It is used as a non IFRS measure of earnings that excludes the impacts of market and interest rate volatility,
with the definition updated to reflect the application of AASB 17. Underlying NPAT (from continuing operations) has been defined as the
consolidated profit after tax excluding the effects of economic changes on both the AASB 17 insurance contract liability and the incurred
income protection disabled lives reserves, the (non-cash) impairment of the asset for acquisition cash flows (AIACF), changes in the loss
component that is predominantly driven by the level premium business, current year timing impacts of assumption changes on the contractual
services margin and any costs considered unusual to the Group’s ordinary activities. Underlying NPAT includes the amortisation of capitalised
software and leases, underlying investment income (the portfolio carry yield on the investment portfolio and interest rate earned on physical
cash holdings), costs associated with the incurred claims reinsurance treaties and interest costs associated with corporate debt and Tier 2
Capital.
Directors’ Report
52
ClearView Annual Report 2024
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 2024.
Subsequent events
FY24 Final Dividend
A final fully franked FY24 cash dividend of 1.7 cents per share or $11.1 million has been declared subsequent to
year end. This brings the total dividends paid in respect of FY24 to 3.2 cents per share, comparing with dividends
of 3.0 cents per share for FY23. The FY24 payout ratio is 60% of Underlying NPAT – at the top end of the target
payout ratio. The DRP has been reinstated and will operate for the FY24 final dividend.
FY24 Dividend from ClearView Life Assurance Limited
A dividend of $17.5 million was declared to be paid from ClearView Life Assurance Limited (CLAL) to its parent
entity, ClearView Group Holdings Pty Limited (CGHPL) on 20 August 2024. Subsequently, a dividend of $17.5
million was declared to be paid from CGHPL to its parent entity, ClearView Wealth Limited (CWL), part of which
will be used to fund the cash component of the FY24 final dividend.
ClearView Wealth Limited
53
Remuneration
report
Directors’ Report
54
ClearView Annual Report 2024
Remuneration report
This Remuneration Report for the year ended 30 June 2024 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.
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
Term as
KMP1
Audit
Nomination &
Remuneration
Risk &
Compliance
Non-Executive Directors
Geoff Black
Independent Non-Executive
Chairman
Full year
✓
✓
✓
Michael Alscher2
Non-Executive Director
Part year
✓
Gary Burg
Independent Non-Executive Director
Full year
✓
✓
✓
Jennifer Lyon
Independent Non-Executive Director
Full year
✓
C
C
Nathanial Thomson
Non-Executive Director
Full year
✓
Eloise Watson2
Non-Executive Director (Alternate
to Nathanial Thomson / Michael
Alscher)
Part year
✓
Edward Fabrizio
Independent Non-Executive Director
Full year
C
✓
✓
Executives
Nadine Gooderick
Managing Director
Full year
Judilyn Beaumont3
General Counsel and Chief Risk
Officer
Full year
Christopher
Blaxland- Walker
Group Executive, Distribution
Full year
Athol Chiert
Chief Financial Officer
Full year
Joanne Faglioni
Group Executive, Operations
Full year
Nick Kulikov
Group Executive, Product and
Pricing
Full year
Hicham Mourad
Chief Technology Officer
Full year
Cloe Reece4
Chief Risk Officer
Full year
✓ = Member, C = Chair
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
Appointed as Alternate Non-Executive Director to Nathanial Thomson and Michael Alscher. Resigned as Director on 23 May 2024.
3
Position title updated to General Counsel and Chief Risk officer effective from 2 September 2024. Previously Group Executive, General Counsel
and Corporate.
4
Resigned as Chief Risk Officer effective from 1 September 2024.
Directors’ Report
ClearView Wealth Limited
55
2. Remuneration Overview
2.1 ClearView’s Remuneration Framework Overview
During FY24, 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 FY24 is set out below.
Fixed pay
Variable remuneration
Short term variable remuneration
Long term variable remuneration
Purpose
To pay fairly and
according to
external market
conditions for
each role.
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.
Delivery
Base Salary,
Superannuation,
and Other
Benefits.
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.
Directors’ Report
56
ClearView Annual Report 2024
FY 24
Approach
Short term remuneration and STVR
Long term remuneration and LTVR
Opportunity as % of Fixed pay
Opportunity as % of Fixed pay
Target
Stretch
Target
Managing
Director
50%
60%
Managing
Director
100% - 120%
Other executives
30%
36%
Other
executives
50% - 70%
Weightings
Performance conditions
30%
Business performance and growth
Customer
Transformation, simplification and employee engagement
Risk management and compliance
Shareholder management and engagement
9%
42%
13%
6%
Target outcomes
2024 LTVR Issue: The TSR vesting is based
upon the Company’s performance against
two equally-weighted vesting conditions on
30 June 2027 being:
(1) Total Shareholder Return reflected as
the Company’s share price as at the end of
the measurement period based on a vesting
scale in the share price range of $0.78 -
$0.84. The Company’s TSR is calculated as
growth in shareholder value based on share
price growth and dividends.
(2) Embedded Value (EV), excluding
franking credits, calculated at the end
of the measurement period (using the
discount rate adopted in the 30 June 2023
EV calculations) based on a vesting scale
in the range of $620-$680 million. The EV
calculation is adjusted for dividends, capital
restructuring and related impacts.
2023 LTVR Issue: The TSR vesting is based
upon the Company’s performance against
two equally-weighted vesting conditions on
30 June 2026 being:
(1) Total Shareholder Return reflected as
the Company’s share price as at the end of
the measurement period based on a vesting
scale in the share price range of $0.72 -
$0.78. The Company’s TSR is calculated as
growth in shareholder value based on share
price growth and dividends.
(2) Embedded Value (EV), excluding
franking credits, calculated at the end of
the measurement period based on a vesting
scale in the range of $625-$675 million. The
EV calculation is adjusted for dividends,
capital restructuring and related impacts.
2022 LTVR Issue: Based on the Company’s
TSR calculated as a growth in shareholder
value based on share price growth and
dividends, assuming they are reinvested into
shares. The TSR vesting condition is based
upon a market capitalisation target of the
Company1 of $483.75m on 30 June 2025.
2021 LTVR Issue: Based on the Company’s
TSR calculated as a percentage growth
in shareholder value based on share
price growth and dividends, assuming
they are reinvested into shares. The TSR
vesting condition is based upon an annual
compound growth rate of 25% over the
measurement period (FY24).
Underpinned by gate openers being risk management,
culture and values with the 2024 deferral component
settled on 30 June 2027.
Directors’ Report
ClearView Wealth Limited
57
Malus and
Clawback
In the event that the Board forms the opinion that a Participant has committed an act of fraud,
defalcation or gross misconduct in relation to the Company then the Participant will forfeit all
unvested entitlements under the plan (STVR and LTVR), including all unvested rights.
1
Based on the number of shares on issue at the start of the measurement period.
Remuneration Framework Timeline FY24
FY24
FY25
FY26
FY27
Fixed pay
STVR Performance
period
Audit & STVR
Assessment
60% Cash Award*
40% Restricted Rights*
LTVR Performance Period - Performance Rights with a TSR Vesting Condition as well as a EV Condition.
*STVR Cash awards are generally awarded following the release of the audited Annual Report. Restricted rights will be issued in relation to the
deferred portion of the STVR and will vest three years post the measurement period (ie 30 June 2027).
2.2 FY24 Company Performance At-A-Glance
The following outlines the Company’s performance in FY24, which is intended to assist in demonstrating the link
between performance, value creation for shareholders, and executive reward:
FY End
Date
Net
profit
after
tax
($’000)
Underlying
NPAT from
Continuing
Operations2
($’000)
Share price (cents)
Dividend
(Interim)
(cents)
Dividend
(Final)
(cents)
Change in
shareholders
wealth
EV1
($m)
EV per
share1
(cents)
Start
End
Change
Total
value
%
30/6/2024
(12,449)
35,300
48.5
60.5
12.0
1.5
1.70
15.2
31.3%
591
91.4
30/6/2023
8,884
28,259
68.0
48.5
(19.5)
—
3.0
(16.5)
(24.3)%
587
91.2
30/6/2022
21,175
25,655
50.0
68.0
18.0
—
2.0
20.0
40.0%
605
92.2
30/6/2021
6,679
22,722
27.5
50.0
22.5
—
1.0
23.5
85.5%
640
95.7
30/6/2020
13,081
14,738
66.0
27.5
(38.5)
—
—
(38.5)
(58.3)%
643
95.3
1
Embedded Value (EV) at 4% discount rate margin, including a value for future franking credits and EV attributed to continuing operations from
time to time. Risk free rate of 4% (FY23: 4%; FY22: 3.5%; Prior years: 2%). EV is reflected net of cash dividends paid in each relevant period.
2
Underlying NPAT (from continuing operations) has been defined as the consolidated profit after tax excluding the effects of economic
changes on both the AASB 17 insurance contract liability and the incurred income protection disabled lives reserves, the (non-cash)
impairment of the asset for acquisition cash flows (AIACF), changes in the loss component that is predominantly driven by the level premium
business, current year timing impacts of assumption changes on the contractual services margin and any costs considered unusual to the
Group’s ordinary activities. Underlying NPAT includes the amortisation of capitalised software and leases, underlying investment income (the
portfolio carry yield on the investment portfolio and interest rate earned on physical cash holdings), costs associated with the incurred claims
reinsurance treaties and interest costs associated with corporate debt and Tier 2 Capital.
3
Underlying NPAT and Net profit after tax for FY23 (restated) and FY24 under AASB 17. FY22 and prior under old accounting standard AASB
1038.
Directors’ Report
58
ClearView Annual Report 2024
Key achievements during the year under review include:
• Business performance and growth: The sales momentum and growth of ClearView ClearChoice has continued
in FY24 with gross premium income increased by 10% to $358.1 million and new business up 34% to $33.7
million. Group Underlying NPAT from continuing operations increased by 25% to $35.3 million;
• Customer: An enhanced customer experience was driven through a focus on data, automation improvements,
tele-claims, rehabilitation capability and return to work outcomes. New business market share (on a rolling 12
month basis) increased to 11.0% (up from 9.2% in FY23). ClearView has established a diversified distribution
network with circa 1,000 dealer groups comprised of 4,000+ advisers and remains well positioned to continue
to increase its new business market share. ClearView’s lapse rates continue to be better than industry.
• Transformation, simplification and employee engagement: The enhancement and build out of the back end of
the technology platform has further progressed in the financial year, with the successful completion of Phase
1 of the project to approved baseline. Employee engagement scores remain a core focus during a period of
significant change. Significant progress has been made in the exit of the wealth management businesses;
• Risk management and Compliance: Risk management in ClearView has priority with the Board, Executive
Leadership Team and the business. The way in which risks are managed continues to evolve to meet the
ongoing changes and challenges in economic conditions, the competitive landscape, stakeholder (including
regulatory) expectations and the delivery of solid and sustainable financial performance;
• Shareholder management and Engagement: Progress in shareholder engagement has been made with
shareholder education sessions, roadshows, and conferences held over the year while ClearView has gained the
interest of new shareholders and increased analyst coverage.
2.3 FY24 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 FY24 for STVR and LTVR, and the ‘achieved’
remuneration payable in respect of the completed FY24 year and performance delivered:
Target
Achieved
200,000.00
400,000.00
600,000.00
800,000.00
1,000,00.00
1,200,00.00
Fixed pay
Cash STVR
Deferred STVR
LTVR
Managing director (averages)
Target
Achieved
100,000.00
200,000.00
300,000.00
400,000.00
500,000.00
600,000.00
700,000.00
Executives (averages)
37.17%
19.42%
6.46%
36.95%
55.72%
29.11%
9.68%
5.48%
54.01%
17.90%
5.49%
22.60%
58.11%
11.87%
5.90%
24.12%
“Achieved” refers to Fixed Pay received during FY24 and Cash STVR awarded in respect of FY24 performance (i.e.
after the end of the year) and any LTVR vested during the year. This table on a cash basis.
Executives exclude the Managing Director but includes Executive KMP.
The table below presents remuneration paid or vested for Executive KMP in relation to FY24 and FY23 which
includes:
• Fixed pay including base pay and superannuation contributions;
• The value of cash settled STVR awarded following completion of the financial year;
• The value of STVR Restricted Rights deferred from previous years that vested on 30 June 2024; and
• The value of LTVR awards with a performance period ending 30 June 2024.
Directors’ Report
ClearView Wealth Limited
59
Name
Fixed Package
(incl. Super)
Total STVR awarded
following completion
of the financial year
(cash)2
Total STVR Restricted
Rights (deferred) that
vested during the
financial year3
Value of LTVR
that vested with
a performance
period ending the
financial year4
Total
Remuneration
Package
(TRP)
Vested
LTVR from
change in
value during
the vesting
period5
Amount
($)
% of
TRP
Amount
($)
% of
TRP
Amount
($)
% of TRP
Amount
($)
% of
TRP
Amount ($)
Amount ($)
Executives
N Gooderick
2024
650,000
72%
195,000
22%
16,902
2%
36,739
4%
898,641
(5,123)
2023
403,381
78%
67,871
13%
45,248
9%
—
—%
516,500
—
J Beaumont
2024
432,600
68%
73,975
12%
40,566
6%
88,173
14%
635,314
(11,827)
2023
420,692
79%
69,023
13%
46,015
9%
—
—%
535,730
—
C Blaxland-Walker
2024
390,000
58%
70,902
11%
34,988
5%
176,346
26%
672,236
(23,654)
2023
390,346
77%
68,487
14%
45,658
9%
—
—%
504,491
—
A Chiert
2024
464,200
57%
83,556
10%
43,915
5%
220,432
27%
812,103
(29,568)
2023
440,346
78%
74,322
13%
49,548
9%
—
—%
564,216
—
J Faglioni
2024
358,000
85%
65,084
15%
—
—%
—
—%
423,084
—
N Kulikov
2024
420,000
86%
71,064
14%
—
—%
—
—%
491,064
—
H Mourad
2024
410,000
68%
67,158
11%
36,037
6%
88,173
15%
601,368
(11,827)
2023
370,346
79%
58,990
13%
39,327
8%
—
—%
468,663
—
C Reece
2024
410,000
86%
67,158
14%
—
—%
—
—%
477,158
—
2023
400,346
79%
65,470
13%
43,647
9%
—
—%
509,463
—
Former Executives1
S Swanson
2023
725,584
70%
188,993
18%
125,995
12%
—
—%
1,040,572
—
G Kerr
2023
460,346
77%
81,818
14%
54,546
9%
—
—%
596,710
—
D Lowe
2023
395,742
80%
60,333
12%
40,222
8%
—
—%
496,297
—
1
Awards relate to the period when they were KMP.
2
Value of the STVR cash award calculated following the end of the financial year. The amount is settled in cash.
3
Value of the STVR deferred from previous years that vested on 30 June 2024 (valued using the daily VWAP share price on 28 June 2024 of
$0.5880).
4
Value of the LTVR awards with performance period ended on 30 June 2024 (valued using the daily VWAP share price on 28 June 2024 of
$0.5880).
5
Changes in the value of the LTVR awards with performance period ended on 30 June 2024 (valued using daily VWAP share price on 28 June
2024 of $0.5880) and the grant value at the grant date.
Directors’ Report
60
ClearView Annual Report 2024
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:
External
Auditors
Independent Assurance
Board
Internal
Audit
Legal or other
professional
advice
Managing Director
Senior Management Team
Accountability
Accountability
Delegation
Delegation
Nomination and
Remuneration Committee
Risk and Compliance
Committee
Audit
Committee
Delegation
Assurance,
Oversight
through
Reporting
Directors’ Report
ClearView Wealth Limited
61
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.
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ClearView Annual Report 2024
3.4 FY24 Short Term Variable Remuneration (STVR) Plan
A description of the STVR structure applicable for FY24 is set out below:
Purpose
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.
Measurement
Period
The financial year of the company (1 July - 30 June).
Opportunity
Opportunity as % of Fixed Pay
Target
Stretch
Managing Director
Other executives
50%
30%
60%
36%
Outcome
Metrics and
Weightings
For FY24, the following metrics and weightings applied:
• Financial Measures: including: Group Underlying Net Profit After Tax1, Gross Premium
Income and Cost to Income ratio - 30%
•
Non-financial Measures: Business Targets - 70% including:
•
Customer
•
Transformation, simplification and employee engagement
•
Risk management and compliance
•
Shareholder management and 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 FY24. Refer to the section “The Link Between
Performance and Reward for FY24” for additional information regarding performance
outcomes relative to target.
Gate
The following Gate openers applied for FY24:
•
Risk Management
•
Culture and Values
Award,
Settlement and
Deferral
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 2027.
Any grant of deferred STVR Restricted Rights will be calculated based on the 90-day VWAP
leading up to the end of the FY24 performance period.
Delisting and
Corporate
Action
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.
Board
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
Underlying NPAT (from continuing operations) continues to be adopted by the Board as its key measure of Group profitability and basis for
dividend payment decisions. It is used as a non IFRS measure of earnings that excludes the impacts of market and interest rate volatility,
with the definition updated to reflect the application of AASB 17. Underlying NPAT (from continuing operations) has been defined as the
consolidated profit after tax excluding the effects of economic changes on both the AASB 17 insurance contract liability and the incurred
income protection disabled lives reserves, the (non-cash) impairment of the asset for acquisition cash flows (AIACF), changes in the loss
component that is predominantly driven by the level premium business, current year timing impacts of assumption changes on the contractual
services margin and any costs considered unusual to the Group’s ordinary activities. Underlying NPAT includes the amortisation of capitalised
software and leases, underlying investment income (the portfolio carry yield on the investment portfolio and interest rate earned on physical
cash holdings), costs associated with the incurred claims reinsurance treaties and interest costs associated with corporate debt and Tier 2
Capital.
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ClearView Wealth Limited
63
3.5 FY24 Long Term Variable Remuneration (LTVR) Plan
A description of the LTVR structure applicable for FY24 is set out below:
Purpose
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.
Instrument
The LTVR is in the form of Performance Rights with a nil Exercise Price, which are subject to
performance and service vesting conditions.
Measurement
Period
1 July 2023 to 30 June 2027 (4 Years)
Opportunity
Opportunity as % of Fixed Pay
Target LTVR
Managing Director
Other executives
100% - 120%
50%-70%
Grant
Calculation,
Performance
Metric and
Vesting Scale
The number of Performance Rights in a Tranche of FY24 Target 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 TSR share price. Vesting
is based on the Company’s performance against two equally-weighted conditions, being
a vesting scale based on the share price range of $0.78 - $0.84 (TSR); and an Embedded
Value range of $620m - $680m. 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.
In addition to the Target LTVR, the MD was also granted an additional tranche of LTVR
(‘Tranche 2 (Stretch)’) with vesting based on equally-weighted conditions a TSR measure of
$1.00; and an Embedded Value of $690m. The measures operate independently but there is
no award if a measure is not achieved, and no pro rata applies.
Re-testing
No re-testing facility is available under the CWL Rights Plan Rules.
Settlement
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.
Term
Performance Rights have a term of 15 years from the grant date and if not exercised within
the term the Performance Rights will lapse.
Delisting and
Corporate
Action
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.
Cessation of
Employment
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.
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ClearView Annual Report 2024
3.6 FY24 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 FY24:
Role
Main Board
Audit
Remuneration
Risk
Chair
200,000
30,000
30,000
30,000
Member
85,000
*Fees are inclusive of superannuation
Aggregate
Board Fees
The total amount of fees paid to Non-Executive Directors in the year ended 30 June 2024 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.
From 1 July 2024, the Board fees increased from $200,000 to $220,000 as the Chair and from $85,000 to
$100,000 as a Member.
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ClearView Wealth Limited
65
4. The Link Between Performance and Reward in FY24
The Board views the outcomes of remuneration for FY24 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 FY24 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
Weight
Achieved
Business Performance and growth
30.0%
28.5%
Business performance and growth consists of:
• Gross Premium Income (25%)
• Group Underlying NPAT (25%)
• CTI ratio (continuing operations) (25%)
• NB premium growth targets (25%)
The Group performed strongly in FY24, achieving
almost all financial metric targets. The result
reflects the strong growth and underlying business
momentum that has been driven by the ongoing
business simplification, a stepped change in new
business sales, inflation linked premiums and lapse
management offset by adverse claims in the year.
Risk management and compliance
13.0%
13.0%
Continued improvement in the risk maturity
profile of the business in FY24.
Performance metrics and baseline expectations
of risk performance were built out for FY24
across ClearView and there was a continued
focus on accountability and timely closure in
high rated audit items, operational risk and
compliance incident risk items, leading to
significant improvements across all baseline
expectations and risk management “core
metrics” during FY24.
No major cyber security incidents.
The improvement of the risk maturity profile is
considered to be on track with broad achievement
of the goals over FY24. Risk Culture survey
outcomes were very strong indicating employees
understand and feel supported with the risk
frameworks in place. No major cyber security
incidents occurred in FY24.
Customer
9.0%
9.0%
The Customer success factors for FY24 included
new business market share, adviser satisfaction
and lapse rates, with a focus on increasing
customer engagement and retention.
An enhanced customer experience was driven
through focus on data, automation improvements,
tele-claims, rehabilitation capability and return to
work outcomes.
Strong market share gains were achieved in the
year in a growing market.
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ClearView Annual Report 2024
Transformation, simplification and employee
engagement
42.0%
39.0%
FY24 focus was on delivery to approved baseline
(scope, cost, schedule, quality) - strategic
projects and uplift. Employee Engagement survey
participation and results.
Enhancement and build out of technology
platform progressed significantly with completion
of back-end functionality and commencement of
migration project. Employee Engagement survey
participation was high with initiatives launched
to support the uplift in leadership capability and
focus of succession planning of critical roles.
Significant progress was made in the exit of
wealth management businesses.
Shareholder management and engagement
6.0%
7.5%
The focus for FY24 was on growing shareholder
base, extending coverage, delivering high
quality investor experiences including Investor
Roadshows and conferences.
Expanded engagement, and broadening out of
shareholder base and analyst coverage. This is
reflected in the improved share price performance.
Overall the STVR outcomes for FY24, taking into account both the financial and non-financial measures as
determined through the Board’s assessment are outlined below:
Name
Opportunity (as % of FP
less Super)
Total
STVR
Awarded
($)
STVR
Outcome
as % of
Maximum
STVR
Outcome
as % of
Target
STVR
Forfeited
as % of
Maximum
STVR In
Excess
(Forfeited)
as % of
Target
Max STVR
Target STVR
N Gooderick
60%
50%
325,000
83%
100%
17%
—%
J Beaumont
36%
30%
123,291
79%
95%
21%
(5)%
C Blaxland-Walker
36%
30%
118,170
84%
101%
16%
1%
A Chiert
36%
30%
139,260
83%
100%
17%
—%
J Faglioni
36%
30%
108,474
84%
101%
16%
1%
N Kulikov
36%
30%
118,440
78%
94%
22%
(6)%
H Mourad
36%
30%
111,930
76%
91%
24%
(9)%
C Reece
36%
30%
111,930
76%
91%
24%
(9)%
4.2 FY24 LTVR Outcomes
On 30 June 2024, the FY21 LTVR award with TSR performance hurdles reached the end of the four-year
performance period and were subject to testing.
The TSR vesting condition was based upon an annual compound growth rate of 25% in shareholder value (based
on share price growth and dividends, assuming they are reinvested into shares) over the measurement period (1
July 2020 to 30 June 2024), with 100% of the tranche vesting on achievement of the hurdle. As at 30 June 2024,
the FY21 grant achieved a target vesting at 26.28% TSR per annum, with a 100% vesting outcome.
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ClearView Wealth Limited
67
5.
Statutory Tables and Supporting Disclosures
5.1
Executive KMP Statutory Remuneration
The following table outlines the statutory remuneration of Executive KMP.
Short term benefits
Post
employment
benefits
Long
term
benefits
Other
benefits
Share based payments
Total
Salary
and Fees
STVR
Cash10
Other
benefits
and
allowances
Super-
annuation
Long
Service
Leave
Termination
Payment9
Performance
/ Restricted
Rights10,11
Performance
based
$
$
$
$
$
$
$
%
$
Executives
N Gooderick4
2024
621,271
195,000
20,364
27,496
4,241
—
219,345
38.09%
1,087,717
2023
399,167
67,871
16,809
25,373
4,025
—
59,451
22.23%
572,696
J Beaumont
2024
412,527
73,975
20,364
27,496
4,152
—
97,489
26.96%
636,003
2023
381,444
69,023
21,377
25,373
2,609
—
61,055
23.19%
560,881
C Blaxland-Walker
2024
431,992
70,902
81,539
27,496
(60,407)
—
99,692
26.20%
651,214
2023
359,118
68,487
88,626
25,373
9,300
—
24,132
16.11%
575,036
A Chiert
2024
438,709
83,556
20,364
27,496
12,584
—
121,234
29.09%
703,943
2023
407,539
74,322
21,377
25,373
9,880
—
22,641
17.28%
561,132
J Faglioni6
2024
334,491
65,084
—
27,496
1,798
—
56,019
24.98%
484,888
N Kulikov7
2024
389,700
71,064
—
27,496
(1,782)
—
60,006
23.98%
546,484
H Mourad
2024
377,674
67,158
17,917
27,496
3,942
—
92,945
27.27%
587,132
2023
354,672
58,990
14,998
25,373
2,001
—
54,367
22.21%
510,401
C Reece
2024
384,006
67,158
—
27,496
1,761
—
80,447
26.32%
560,868
2023
377,517
65,470
—
25,373
1,146
—
53,719
22.78%
523,225
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ClearView Annual Report 2024
Short term benefits
Post
employment
benefits
Long
term
benefits
Other
benefits
Share based payments
Total
Salary
and Fees
STVR
Cash8
Other
benefits
and
allowances
Super-
annuation
Long
Service
Leave
Termination
Payment9
Performance
/ Restricted
Rights10,11
Performance
based
$
$
$
$
$
$
$
%
$
Former Executives
S Swanson3
2023
720,256
188,993
21,377
25,612
15,933
—
39,893
22.62%
1,012,064
G Kerr5
2023
429,611
81,818
14,998
25,373
1,808
—
76,747
25.15%
630,355
D Lowe5
2023
365,121
60,333
12,293
25,373
17,710
—
23,088
16.55%
503,918
J McLaughlin2
2023
265,077
—
—
20,428
(5,530)
262,281
(53,371)
(10.92)%
488,885
1
Ceased as General Manager, Licensee Services on 27 November 2021.
2
Ceased as KMP on 1 August 2022 and employment on 31 March 2023.
3
Ceased as Managing Director and KMP on 30 June 2023 (employment was ceased subsequent to that date during the year). During FY24, Mr
Swanson received salary and other benefits (including superannuation) of $108,065 and termination payment of $905,657.
4
Appointed as Managing Director effective from 1 July 2023.
5
Ceased to hold a KMP role on 30 June 2023 (employment was ceased subsequent to that date during the year). During FY24, Mr Kerr received
salary and other benefits (including superannuation) of $186,234 and termination payment of $435,394. Ms Lowe received salary and other
benefits (including superannuation) of $116,046 and termination payment of $390,927.
6
Appointed as Group Executive, Operations effective from 1 July 2023.
7
Appointed as Group Executive, Product and Pricing effective from 1 July 2023.
8
Cash amount of the STVR payable in relation to FY24 and FY23 financial year and accrued as at 30 June 2024 and 2023 respectively. Amount
to be paid, will be based on actual fixed remunerations for the year, on approval of the results of the relevant financial year.
9
Payment in lieu of notice, which incorporates statutory notice and severance entitlements.
10
Restricted Rights granted under the CWL Rights Plan covering the LTVR as well as the deferred component of the STVR respectively.
Restricted Rights can be settled in cash or equity based on the terms of each award.
11
Reflects the accruals or reversal for all previously granted 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.
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ClearView Wealth Limited
69
5.2 Non-executive Director (NED) KMP Statutory Remuneration
The compensation of each NED is set out below:
Year
Short term
benefits
Post
employment
benefits
Total
Performance
based
GST /
Superannuation
Salary & Fees
Superannuation
$
$
$
%
Non-executive Directors
G Black
2024
180,180
19,820
200,000
—
incl. Super
2023
180,995
19,005
200,000
—
incl. Super
G Burg
2024
85,000
—
85,000
—
excl. GST
2023
92,500
—
92,500
—
excl. GST
N Thomson /
E Watson
2024
85,000
—
85,000
—
excl. GST
2023
85,000
—
85,000
—
excl. GST
M Alscher /
E Watson
2024
85,000
—
85,000
—
excl. GST
2023
85,000
—
85,000
—
excl. GST
J Lyon
2024
157,658
17,342
175,000
—
incl. Super
2023
158,371
16,629
175,000
—
incl. Super
E Fabrizio3
2024
115,000
—
115,000
—
excl. GST
Former Non-executive
Director
S Young2
2023
86,727
9,106
95,833
—
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
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ClearView Annual Report 2024
5.3 Equity Interests and Changes
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 while some executives still hold shares from that
plan. A description of the ESP structure is set out below:
Purpose
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).
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.
Offers
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.
Financial
Assistance
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.
As all the ESP shares have vested, in June 2024 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 14 months after a Change in Control of the
Company (as defined in the ESP Rules).
Holding Lock
The shares granted under the ESP to participants are subject to a holding lock restricting
the holder from dealing with the shares until after the ESP Loan is fully repaid or unless
otherwise provided under the Invitation (such as to dispose of the shares and utilise the
proceeds to repay the remainder of the ESP Loan).
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.
The following table outlines the fair values, vesting conditions and expiry dates for the ESP shares issued to KMP
or their related entities as at the date of this report.
Share series
Fair value at
grant date
(pre-
modification1)
Fair value at
grant date
(post-
modification1)
Exercise
price per
share ($)
Aggregate
value at grant
date ($)
Vesting
conditions
Expiry date5
A Chiert
Series 7 1,2
0.07
0.10
0.49
98,057
Vested
End of loan term
Series 26 4
0.29
n/a
0.57
289,798
Vested
End of loan term
C Blaxland-
Walker
Series 16 1,3
0.10
0.13
0.50
127,366
Vested
End of loan term
Series 43
0.20
n/a
1.01
16,718
Vested
End of loan term
Series 44
0.23
n/a
1.01
19,372
Vested
End of loan term
Series 45
0.27
n/a
1.01
21,883
Vested
End of loan term
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
In June 2024, the Board exercised its discretion under the ESP Plan Rules to ensure the consistency between participants and given the
timeframe that the ESP shares have been on issue. This resulted in the amendment of the conditions attached to the remaining unvested ESP
shares (as they were subject to the ‘Change in Control’ vesting criteria), such that the Board approved the immediate vesting in June 2024.
5
The Board approved granting an extension of the loan term to expire 14 months after a change of control in the Company. A change of control
is defined as Crescent Capital Partners and its associates holding less than 20% of ClearView Wealth Limited’s voting shares.
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71
5.3.2 Movement of ESP shares under non-recourse loans
Movements of the 3,747,525 ESP shares (2023: 14,271,030 shares) held by executive KMP and former executive
KMPs during the reporting period are set out below:
Held at
1 July 2023
No.
Granted
No.
Exercised
No.
Forfeited
No.
Held at
30 June
2024
No.
Vested
during
the year
No.
Vested and
exercisable
at 30 June
20242
No.
Executives
A Chiert1
2,500,000
—
—
—
2,500,000
1,000,000
2,500,000
C Blaxland-Walker1
1,247,525
—
—
—
1,247,525
—
1,247,525
Former Executives
S Swanson3
10,000,000
—
(2,000,000)
(8,000,000)
—
—
—
D Lowe4
523,505
—
—
(523,505)
—
—
—
1
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.
2
Interest is charged on vested shares as resolved by the Board.
3
Ceased to hold a KMP role on 30 June 2023. The Board approved granting an extension of the loan term to 30 November 2023 relating Mr
Swanson’s vested ESP shares. During the year, 2 million shares were exercised and converted to ordinary shares, and the remaining 8 million
shares were forfeited.
4
Ceased to hold a KMP role on 30 June 2023. Employment terminated during the year. Unvested ESP shares fully lapsed on cessation of
employment and the associated expense was reversed.
Directors’ Report
72
ClearView Annual Report 2024
5.3.3 Performance Rights and Restricted Rights
Changes in each Executive’s holding of STVR and LTVR are set out in the table below:
Name
Rights
on issue
at 1 July
2023
(No.)
Rights granted
Rights exercised /
forfeited
Rights on
issue at
30 June
2024
(No.)
Rights
vested
during
the year
(No.)
Rights
vested and
exercisable
at 30 Jun
2024 (No.)
No.
Value1
No.
Value
Executives
N Gooderick
STVR
92,501
93,545
45,248
—
—
186,046
—
28,745
LTVR
596,668
1,083,332
364,356
—
—
1,680,000
62,481
62,481
J Beaumont
STVR
141,400
95,132
46,015
—
—
236,532
—
68,990
LTVR
684,141
238,095
81,762
—
—
922,236
149,954
149,954
C Blaxland-
Walker
STVR
125,592
94,394
45,658
—
—
219,986
—
59,503
LTVR
834,095
238,095
81,762
—
—
1,072,190
299,908
299,908
A Chiert
STVR
150,047
102,435
49,548
—
—
252,482
—
74,686
LTVR
1,042,619
297,619
102,202
—
—
1,340,238
374,885
374,885
J Faglioni
LTVR
—
238,095
81,762
—
—
238,095
—
—
N Kulikov
LTVR
—
238,095
81,762
—
—
238,095
—
—
H Mourad
STVR
121,604
81,305
39,327
—
—
202,909
—
61,288
LTVR
684,141
238,095
81,762
—
—
922,236
149,954
149,954
C Reece
STVR
30,927
90,236
43,647
—
—
121,163
—
—
LTVR
362,163
238,095
81,762
—
—
600,258
—
—
Former Executives
S Swanson4
STVR
403,071
260,483
125,995
—
663,554
—
191,890
LTVR2
3,336,384
—
—
(3,336,384)
606,795
—
—
—
G Kerr4
STVR
114,338
112,768
54,546
—
227,106
—
34,337
LTVR3
1,168,724
—
—
(180,000)
99,000
988,724
187,443
187,443
D Lowe4
STVR
141,607
83,155
40,222
—
224,762
—
70,915
LTVR
796,607
—
—
—
796,607
262,420
262,420
T Kardash4
STVR
58,506
—
—
—
58,506
—
58,506
LTVR
415,658
—
—
—
415,658
299,908
299,908
J McLaughlin4
STVR
114,012
—
—
—
114,012
—
54,216
1
The value of the STVR rights granted during the year is the fair value at grant date based on the VWAP share price of $0.4837. The value of the
TSR portion of the LTVR rights granted is the fair value at grant date calculated using the Monte Carlo simulation method which was $0.2678
and $0.2282 (in respect of the ‘stretch target’ tranche of N Gooderick’s LTVR). The fair value of the LTVR rights which are subject to the EV
conditions at grant date was $0.4190.
2
The value of rights forfeited is based on the value of the rights at grant date.
3
The value of the rights exercised is based on the VWAP share price of $0.55 on the exercise date.
4
Awards relate to the period when they were KMPs..
Directors’ Report
ClearView Wealth Limited
73
Details of LTVR awards made to Executives that were outstanding during the year ended 30 June 2024 are shown
in the table below.
Award
Measure
Grant date
Base date
Test date
Performance hurdle
achievement
Term
(in years)
No. of rights
on issue
FY24
TSR
Aug-23
1/7/2023
30/06/27
Not available
15
1,404,761
FY24
EV
Aug-23
1/7/2023
30/06/27
Not available
15
1,404,761
FY23
TSR
Jan-23
1/7/2022
30/06/26
Not available
15
1,121,794
FY23
EV
Jan-23
1/7/2022
30/06/26
Not available
15
1,121,794
FY22
TSR
Aug-21
1/7/2021
30/06/25
Not available
15
2,374,276
FY21
TSR
Aug-20
1/7/2020
30/06/24
100%
15
1,786,953
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 1 July
2023
No.
Subordinated
notes held at
1 July 2023
No.
Net
movement of
shares due
to other
changes
No.
Net
movement of
subordinated
notes due to
other changes
No.
Shares held
at 30 June
2024
No.
Subordinated
notes held at
30 June 2024
No.
G Black
100,000
—
—
—
100,000
—
J Lyon
27,212
—
—
—
27,212
—
G Burg1
10,918,090
100
—
—
10,918,090
100
1
Interest amount of $102,427 was paid to G Burg during FY24 in respect of the subordinated notes held.
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
2023
No.
Shares
received on
exercise of
ESP
No.
Shares
received on
exercise of
LTIP
No.
Shares
received on
exercise of
LTVR, STVR
No.
Net
movement
of shares
due to other
changes
No.
Shares held at
30 June 2024
No.
Executives
N Gooderick
63,212
—
—
—
—
63,212
A Chiert
722,266
—
—
—
—
722,266
C Blaxland-
Walker
197,811
—
—
—
(197,811)
—
Former Executives
S Swanson1
5,550,000
2,000,000
—
—
—
7,550,000
1
The shares held at the date S Swanson ceased as a KMP on 30 June 2023 plus additional shares received on exercise of ESP during the year.
Directors’ Report
74
ClearView Annual Report 2024
5.4 KMP Service Agreements
5.4.1 Executive KMP Service Agreements
The following outlines current executive KMP service agreements:
Executives
Term
Notice period by
either the employee
or the Company
Other
N Gooderick
Ongoing
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)).
A Chiert
Ongoing
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
In the case of redundancy, a severance payment
of 13 weeks' base salary (or any greater payment
required under the National Employment
Standards (NES)).
D Lowe
Ongoing
6 months
In the case of redundancy, a severance payment
of 13 weeks' base salary (or any greater payment
required under the NES).
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 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 have been disclosed.
*Note: Under the Corporations Act, broadly the Termination Benefit Limit is 12 months average Salary (over prior 3 years) unless shareholder
approval is obtained.
Directors’ Report
ClearView Wealth Limited
75
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 FY24
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 FY24 the Board engaged approved External Remuneration Consultants Godfrey Remuneration Group Pty
Ltd (GRG) to provide KMP remuneration advice and other services as outlined below:
• Non Executive Director remuneration benchmarking - $15,400 (incl. GST)
• Senior executives remuneration benchmarking – $23,100 (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
21 August 2024
76
ClearView Annual Report 2024
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
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 2024, 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
21 August 2024
Auditor’s Independence Declaration
ClearView Wealth Limited
77
Consolidated statement of profit or loss and
other comprehensive income
78
Consolidated statement of financial position
79
Consolidated statement of changes in equity
80
Consolidated statement of cash flows
82
Notes to the Financial Statements
1.
About this report
84
(a)
General Information
85
(b)
Statement of compliance
85
(c)
Basis of preparation
85
(d)
Basis of consolidation
85
(e)
Business combinations
86
(f)
Materiality
87
(g)
Material accounting policies
87
(h)
Critical judgements and estimates
87
(i)
Risk management
88
2.
Results for the year
93
2.1
Segment performance
94
2.2
Earnings per share
97
2.3
Dividends
98
2.4
Fee and other revenue
98
2.5
Investment income
99
2.6
Other operating expenses
100
2.7
Taxes
101
3.
Receivables, payables and investments
105
3.1
Receivables
106
3.2
Payables
106
3.3
Investments
107
3.4
Financial risk management
109
4.
Non-financial assets and liabilities
115
4.1
Goodwill and intangibles
116
4.2
Recoverability of intangible assets and
goodwill
117
4.3
Provisions
119
5.
Life insurance and investment contracts
121
5.1
Insurance and reinsurance contract
accounting treatment
122
5.2
Significant judgements and estimates in
applying AASB 17
131
5.3
Insurance revenue and expenses
135
5.4
Net investment result
139
5.5
Insurance contracts issued
140
5.6
Reinsurance contracts held
145
5.7
Capital adequacy
149
6.
Capital structure and capital risk
management
151
6.1
Issued capital
152
6.2
Movements in reserves
153
6.3
Shares granted under the executive
share plan
153
6.4.
Subordinated debt
154
6.5
Borrowings
154
6.6
Capital risk management
155
7.
Employee disclosures
157
7.1
Key management personnel
compensation
158
7.2
Share based payments
158
8.
Related parties and other Group entities
161
8.1
Equity interests in subsidiaries
162
8.2
Investment in associate
163
8.3
Transactions between the Group and its
related parties
163
8.4
Investment in controlled unit trusts
165
8.5
Discontinued operations
166
9.
Other disclosures
170
9.1
Notes to the Consolidated Statement of
cash flows
171
9.2
Contingent liabilities and contingent
assets
171
9.3
Leases
172
9.4
Capital commitments
174
9.5
Guarantees
174
9.6
New accounting standards
174
9.7
Subsequent events
176
Consolidated entity disclosure statement
177
Directors’ declaration
178
Independent auditor’s report
179
Shareholders’ and note holders’ information
186
Directory
188
2024 financial
report
contents
The Financial Report was authorised for issue by the Directors on 21 August 2024.
78
ClearView Annual Report 2024
Consolidated statement of profit or loss and other
comprehensive income
For the year ended 30 June 2024
Consolidated
Company
Note
2024
2023
2024
2023
$'000
$'000
$'000
$'000
Restated1
Continuing operations
Insurance revenue
5.3
333,911
290,815
—
—
Insurance service expenses
5.3
(372,180)
(290,001)
—
—
Net income from reinsurance contracts held
5.3
38,413
8,020
—
—
Insurance service result
144
8,834
—
—
Investment income
2.5, 5.4
21,076
13,313
8,819
24,946
Net fair value gains on financial assets
5.4
3,664
4,189
—
—
Change in life investment contract liabilities
5.4
68
(242)
—
—
Net investment income
24,808
17,260
8,819
24,946
Finance income from insurance contracts issued
5.4
23,169
18,535
—
—
Finance expense from reinsurance contracts held
5.4
(18,332)
(8,694)
—
—
Net insurance finance income
4,837
9,841
—
—
Net insurance and investment result
29,789
35,935
8,819
24,946
Fee and other revenue
2.4
37
72
—
107
Other operating expenses
2.6, 5.3
(13,956)
(11,797)
(6,051)
(2,209)
Other finance costs
2.6, 5.3
(10,172)
(8,243)
(10,030)
(8,062)
Loss on disposal of investments in subsidiaries
—
—
(5,012)
—
Share of net profit of investment in associate
8.2
636
666
636
666
Gain on disposal of investment in associate
8.2
2,197
—
2,197
—
Profit/(loss) before income tax expense
8,531
16,633
(9,441)
15,448
Income tax (expense) benefit
2.7
(1,531)
(3,909)
2,417
2,923
Profit from continuing operations
7,000
12,724
(7,024)
18,371
Loss from discontinued operations
8.5
(19,449)
(3,840)
—
—
Total comprehensive (loss)/income for the year
(12,449)
8,884
(7,024)
18,371
Attributable to:
Equity holders of the parent
(12,449)
8,884
(7,024)
18,371
Earnings per share - continuing operations
Basic (cents per share)
2.2
1.09
1.99
—
—
Diluted (cents per share)
2.2
1.09
1.99
—
—
Earnings per share - continuing operations
(excluding share of net profit and gain on
disposal of investment in associate)
Basic (cents per share)
2.2
0.65
1.88
—
—
Diluted (cents per share)
2.2
0.65
1.88
—
—
Earnings per share
Basic (cents per share)
2.2
(1.94)
1.39
—
—
Diluted (cents per share)
2.2
(1.94)
1.39
—
—
1
The comparative consolidated statement of profit or loss and other comprehensive income has been restated to reflect the retrospective
application of AASB 17 Insurance Contracts.
To be read in conjunction with the accompanying Notes.
ClearView Wealth Limited
79
Consolidated statement of financial position
As at 30 June 2024
Consolidated
Company
Note
30 June
2024
30 June
2023
1 July
2022
30 June
2024
30 June
2023
$'000
$'000
$'000
$'000
$'000
Assets
Restated1
Restated1
Cash and cash equivalents
78,206
94,522
150,735
13,593
13,929
Investments
3.3
423,709
394,885
2,289,624
443,822
443,822
Receivables
3.1
31,305
22,384
27,302
8,561
9,915
Assets held for sale
8.5
1,870,549
1,926,893
—
—
11,956
Fixed interest deposits
22,911
22,897
2,897
—
—
Insurance contract assets
5.5
122,612
85,339
124,674
—
—
Reinsurance contract assets
5.6
189,549
138,520
109,180
—
—
Deferred tax asset
2.7
48,922
46,633
47,766
3,100
291
Property, plant and equipment
711
647
468
—
—
Right-of-use assets
9.3
4,879
7,839
10,456
—
—
Investment in associate
8.2
—
13,440
13,734
—
13,440
Goodwill
4.1
4,011
4,011
12,511
—
—
Intangible assets
4.1
31,749
24,107
17,368
—
—
Total assets
2,829,113
2,782,117
2,806,715
469,076
493,353
Liabilities
Payables
3.2
11,782
21,561
21,123
4,313
2,486
Current tax liabilities
2.7
5,953
12,550
1,425
5,953
12,550
Liabilities directly associated with
assets held for sale
8.5
1,870,347
1,908,908
—
—
—
Provisions
4.3
5,377
7,834
6,119
18
28
Lease liabilities
9.3
5,577
8,598
11,160
—
—
Insurance contract liabilities
5.5
459,981
330,232
319,912
—
—
Reinsurance contract liabilities
5.6
9,971
7,897
18,078
—
—
Life investment contract liabilities
5.4
312
325
1,295,378
—
—
Liability to non-controlling interest
in controlled unit trusts
—
—
645,612
—
—
Deferred tax liabilities
2.7
1,108
585
606
35
35
Borrowings
6.5
31,000
16,000
16,000
31,000
16,000
Subordinated debt
6.4
74,543
74,200
73,857
74,543
74,200
Total liabilities
2,475,951
2,388,690
2,409,270
115,862
105,299
Net assets
353,162
393,427
397,445
353,214
388,054
Equity
Issued capital
6.1
470,060
466,843
466,655
472,377
469,250
Retained losses
6.2
(122,304)
(80,108)
(75,772)
(126,334)
(111,647)
Share based payments reserve
6.2
5,406
6,692
6,562
3,089
4,285
Profit reserve
6.2
—
—
—
4,082
26,166
Total equity
353,162
393,427
397,445
353,214
388,054
1
The comparative consolidated statement of financial position has been restated to reflect the retrospective application of AASB 17 Insurance
Contracts.
To be read in conjunction with the accompanying Notes.
80
ClearView Annual Report 2024
Consolidated statement of changes in equity
For the year ended 30 June 2024
Share
capital
Share
based
payments
reserve
Retained
earnings
(losses)
Attributable
to the
owners of
the parent
Consolidated
Note
$'000
$'000
$'000
$'000
Balance at 1 July 2022, as previously reported
466,655
6,562
7,881
481,098
Impact of initial application of AASB 17
9.6
—
—
(83,653)
(83,653)
Balance at 1 July 2022 (restated)
466,655
6,562
(75,772)
397,445
Profit for the year (restated)
—
—
8,884
8,884
Total comprehensive income for the year
—
—
8,884
8,884
Recognition of share based payments1
—
(166)
—
(166)
Transfer from accrued employee entitlements2
—
435
—
435
Dividend paid
—
—
(13,220)
(13,220)
ESP loans settled through dividend
—
199
—
199
ESP shares vested/(forfeited)
188
(338)
—
(150)
Balance at 30 June 2023 (restated)
6.1, 6.2
466,843
6,692
(80,108)
393,427
Profit for the year
—
—
(12,449)
(12,449)
Total comprehensive income for the year
—
—
(12,449)
(12,449)
Recognition of share based payments1
—
305
—
305
Transfer from accrued employee entitlements3
—
490
—
490
Dividend paid
195
—
(29,747)
(29,552)
ESP loans settled through dividend
—
325
—
325
ESP shares vested/(forfeited)
2,932
(2,316)
—
616
Shares released
90
(90)
—
—
Balance at 30 June 2024
6.1, 6.2
470,060
5,406
(122,304)
353,162
1
FY24, FY23, FY22 and FY21 Long Term Variable Remuneration (LTVR)
2
FY22 Deferred Short Term Variable Remuneration (STVR)
3
FY23 Deferred Short Term Variable Remuneration (STVR)
To be read in conjunction with the accompanying Notes.
ClearView Wealth Limited
81
Share
capital
Share
based
payments
reserve
Profit
reserve
Retained
losses
Attributable
to the
owners of
the parent
Company
$'000
$'000
$'000
$'000
$'000
Balance at 1 July 2022
469,062
4,155
21,015
(111,647)
382,585
Profit for the year
—
—
18,371
—
18,371
Recognition of share based payments1
—
(166)
—
—
(166)
Transfer from accrued employee entitlements2
—
435
—
—
435
Dividend paid
—
—
(13,220)
—
(13,220)
ESP loans settled through dividend
—
199
—
—
199
ESP shares vested/(forfeited)
188
(338)
—
—
(150)
Balance at 30 June 2023
469,250
4,285
26,166
(111,647)
388,054
Profit (loss) for the year
7,663
(14,687)
(7,024)
Recognition of share based payments1
—
305
—
—
305
Transfer from accrued employee entitlements3
—
490
—
—
490
Dividend paid
195
—
(29,747)
—
(29,552)
ESP loans settled through dividend
—
325
—
—
325
ESP shares vested/(forfeited)
2,932
(2,316)
—
—
616
Balance at 30 June 2024
472,377
3,089
4,082
(126,334)
353,214
1
FY24, FY23, FY22 and FY21 Long Term Variable Remuneration (LTVR)
2
FY22 Deferred Short Term Variable Remuneration (STVR)
3
FY23 Deferred Short Term Variable Remuneration (STVR)
To be read in conjunction with the accompanying Notes.
82
ClearView Annual Report 2024
Consolidated statement of cash flows
For the year ended 30 June 2024
Consolidated
Company
2024
2023
2024
2023
$'000
$'000
$'000
$'000
Restated1
Cash flows from operating activities
Receipts from client and debtors
443,577
409,214
—
—
Payments to suppliers and other creditors
(424,984)
(378,478)
(6,656)
(1,378)
Receipts from Group entities
—
—
10,759
17,343
Incurred claims treaty settlements
16,841
4,730
—
—
Interest received
4,580
12,514
868
346
Income taxes (paid)/received
(11,361)
1,314
(4,879)
1,314
Net cash generated by continuing operating
activities
28,653
49,294
92
17,625
Net cash (utilised)/generated by operating
activities - discontinued operations
(25,751)
22,107
—
—
Net cash generated by operating activities
2,902
71,401
92
17,625
Cash flows from investing activities
(Payment)/proceeds for the sale of subsidiaries
net of transaction costs
(2,519)
—
4,850
—
Proceeds from sale of/(payment for) investment
securities in associates
15,313
—
15,313
(554)
Payments for investment securities
(12,980)
—
—
—
Loan and advance made
(3,250)
—
(3,250)
—
Dividend received from associate
960
960
960
960
Acquisition of property, plant and equipment
(443)
(523)
—
—
Acquisition of capitalised software
(11,434)
(12,690)
—
—
Fixed interest deposits invested
(56)
(20,000)
—
—
Loans repayments received
673
50
—
2,913
Dividends received from subsidiary
—
—
4,830
—
Net cash (utilised)/generated by investing
activities - continuing operations
(13,736)
(32,203)
22,703
3,319
Net cash generated by investing activities -
discontinued operations
150,800
140,301
—
—
Net cash generated by investing activities
137,064
108,098
22,703
3,319
ClearView Wealth Limited
83
Consolidated
Company
2024
2023
2024
2023
$'000
$'000
$'000
$'000
Restated1
Cash flows from financing activities
Repayment of lease liability
(3,020)
(2,562)
—
—
Repayment of ESP loans
724
199
724
199
Dividend paid
(29,227)
(13,221)
(29,227)
(13,221)
Interest and other finance costs
(20,882)
(16,403)
(9,628)
(7,362)
Debt drawn down
15,000
—
15,000
—
Net cash utilised in financing activities -
continuing operations
(37,405)
(31,987)
(23,131)
(20,384)
Net cash utilised in financing activities -
discontinued operations
(129,830)
(159,394)
—
—
Net cash utilised in financing activities
(167,235)
(191,381)
(23,131)
(20,384)
Net (decrease)/increase in cash and cash
equivalents
(27,269)
(11,882)
(336)
560
Cash and cash equivalents at the beginning of the
financial year
138,853
150,735
13,929
13,369
Cash and cash equivalents at the end of the
financial year
111,584
138,853
13,593
13,929
Included in assets held for sale (see section
8.5(d))
(33,378)
(44,331)
—
—
Cash and cash equivalents attributable to
continuing operations at the end of the financial
year
78,206
94,522
13,593
13,929
1
The FY23 premium received and reinsurance premium paid have been disaggregated.
To be read in conjunction with the accompanying Notes.
Notes to the Financial Statements
84
ClearView Annual Report 2024
1. About this
report
85
a) General information
87
f) Materiality
85
b) Statement of compliance 87
g) Material accounting
policies
85
c) Basis of preparation
87
h) Critical judgements and
estimates
85
d) Basis of consolidation
88
i) Risk management
86
e) Business combinations
Notes to the
Financial Statements
For the year ended 30 June 2024
Notes to the Financial Statements
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 section 2.1.
b) Statement of compliance
These financial statements are general purpose
financial statements which have been prepared
in accordance with the Corporations Act 2001,
Accounting Standards and Interpretations, and comply
with other requirements of the law.
The financial statements comprise the consolidated
financial statements of the Group and the separate
financial statements of the parent entity. For the
purpose 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’).
The Company has adopted ASIC Corporations (Parent
Entity Financial Statements) Instrument 2021/195,
permitting entities to continue to include parent
entity financial statements in their financial reports.
Entities taking advantage of the relief are not required
to present the summary parent entity information
otherwise required by regulation 2M.3.01 of the
Corporations Regulations 2001.
The financial statements were authorised for issue by
the Directors on 21 August 2024.
c) Basis of preparation
The consolidated financial statements have been
prepared on the basis of historical cost, except
financial instruments 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 whether
that price is directly observable or estimated using
another valuation technique. In estimating the 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
to fair value but are not fair value, such as value in use
in AASB 136 Impairment of Assets.
In addition, for financial reporting purposes, fair
value measurements are categorised into Level 1,
2 or 3 based 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 are described as follows:
• 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 liability.
Insurance and reinsurance contract assets and liabilities
are measured using a fulfillment cash flow and
contractual service margin (CSM) basis.
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 in accordance with that Corporations Instrument,
amounts in the financial report are rounded off to the
nearest thousand dollars, unless otherwise indicated.
All amounts are presented in Australian dollars, unless
otherwise noted.
Certain items have been reclassified from the prior
year’s financial report to conform to the current year’s
presentation basis.
d) Basis of consolidation
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
• has the ability to use its power to affect its returns.
Notes to the Financial Statements
86
ClearView Annual Report 2024
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.
Profit or loss and each component of other
comprehensive 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.
All intragroup assets and liabilities, equity, income,
expenses and cash flows relating to transactions
between members of the Group are eliminated in full
on consolidation.
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 venture.
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 of the acquiree.
Acquisition-related costs are recognised in profit or
loss as incurred.
At the acquisition date, the identifiable assets acquired
and the liabilities assumed are recognised at their fair
value at the acquisition date, except that:
• deferred tax assets or liabilities and liabilities or
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
Notes to the Financial Statements
ClearView Wealth Limited
87
• 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
interests and entitle their holders to a proportionate
share of the entity’s net assets in the event of
liquidation may be initially measured either at fair value
or at the non-controlling interests’ proportionate share
of the recognised amounts of the acquiree’s identifiable
net assets. The choice of measurement basis is made
on a transaction-by-transaction basis. Other types of
non-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 are adjustments
that arise from additional information 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
Information has only been included in the financial
report to the extent that it has been considered
material and relevant to the understanding of the
financial statements. A disclosure is considered material
and relevant if, for example:
• the amount in question is significant because of its
size or nature;
• 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) Material accounting policies
The material accounting policies adopted in the
preparation of the financial report are contained in the
notes to the financial statements to which they relate.
All accounting policies have been consistently applied
in all periods presented, and the comparative period
ended 30 June 2023 and the opening balance sheet at
1 July 2022 have been restated to conform to AASB 17.
The impact of the application of AASB 17 on transition
is described in section 9.6 New accounting standards.
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. Actual results may
differ from these estimates.
Notes to the Financial Statements
88
ClearView Annual Report 2024
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:
• Insurance and reinsurance contract assets
and liabilities including actuarial methods and
assumptions (section 5.2);
• Recoverability of intangible assets and goodwill
(section 4.2);
• Deferred tax assets (section 2.7)
i) Risk management
ClearView is exposed to financial and non financial
risks arising from its operations. These risks are
managed through the Risk Management Framework
(RMF) inclusive of the Risk Management Strategy
(RMS) that is in place and which complies with the
requirements of CPS 220. The RMF is subject to
review to ensure that it continues to remain current
and reflect changes in the businesses operating
environment and regulatory and community
expectations.
The 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.
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.
Management information is produced that allows
financial 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).
ClearView 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)
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.
Notes to the Financial Statements
ClearView Wealth Limited
89
Type of contract
Detail of contract
workings
Nature of compensation
for claims
Key variables that
affect the timing and
uncertainty
Non-participating life
insurance contracts with
fixed terms (Term Life and
Disability)
Benefits paid on death or
ill health that are fixed and
not at the discretion of the
issuer
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
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.
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, Pricing and Data;
• Review by the Control Cycle Forum of experience investigations and changes to product, pricing, underwriting
process, claims process and distribution process;
Notes to the Financial Statements
90
ClearView Annual Report 2024
• 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
Liquidity risk is the risk that the Group will be unable
to meet its obligations when they fall due as a result
of policyholder benefit payments, cash requirements
from contractual commitments or other cash flows.
Credit risk is the risk of financial loss to the Group if a
counterparty fails to meet its contractual obligations,
and arises principally from the Group exposures from
its reinsurers, other 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 has
been included in the insurance 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.
• 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.
Capital management and reserving
In terms of regulatory requirements:
• ClearView Life is subject to regulatory capital
requirements, in accordance with APRA Life
Insurance Prudential Standards, in respect of
the principal financial risk exposures retained by
ClearView Life;
• ClearView Financial Management was also required
by ASIC to maintain minimum regulatory capital
before it was sold to Human Financial on 31 January
2024 (refer to section 8.5 for detail); and
• ClearView Life Nominees (CLN) was required to
maintain an Operational Risk Financial Requirement
(ORFR) as determined in accordance with
Superannuation Prudential Standard 114. SPS
Notes to the Financial Statements
ClearView Wealth Limited
91
114 requires that the trustee maintains adequate
financial resources to address losses arising from
the operational risks that may affect the ClearView
Retirement Plan (CRP). Since the retirement as
the trustee of CRP on 14 December 2023, CLN is
no longer an operating entity and subsequently
released the capital previously held for ORFR (refer
to section 8.5 for detail).
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) will breach their regulatory requirements
and so that the Group has sufficient capital to
manage its near term business plans and provide a
buffer (capital and time) to 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 Life’s statutory fund No.4 are borne by
policyholders of the life investment contracts as the
investment performance on those assets is passed
through, in full, to those policyholders (referred
to below as Policyholder assets). Nonetheless, the
Group has a secondary exposure to the Policyholder
assets and 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 exposure (for further detail on
Asset risks refer to section 3).
b) Asset-Liability mismatch risk
Asset-liability mismatch risk arises to the extent to
which the assets held by the Group to back its liabilities
(especially its contract liabilities and guaranteed
investment account liabilities) do not closely match
the nature and term of those liabilities. In practice,
the market risk and credit risk exposures of the Group
primarily relate to the extent that the Group retains a
net exposure with respect 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 (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 Policy and Guidelines, in high quality,
short dated fixed interest assets and cash. Asset-
liability risk is substantially reduced via this means;
and
• Similarly, assets held to support the contract
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 contract 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
ClearView is exposed to the risk of disruption to
its business operations and IT systems from a host
of disasters that vary in degree from minor to
catastrophic. Business continuity is the process of
restoring the business back to functionality after a
crisis. Disaster recovery differs in that it is the process
of getting all-important IT 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 functions including IT infrastructure
can be maintained or recovered in a timely fashion in
the event of a disruption. 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.
As part of ClearView’s BCM approach, the Crisis
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.
Notes to the Financial Statements
92
ClearView Annual Report 2024
Cyber / Information security
ClearView manages its cyber security exposure though
a combination of approaches. This includes policies,
processes, and controls at all layers of the technology
environment to prevent and detect malicious attempts
to obtain access to confidential and other information
assets. An uplift in the control environment relating to
cyber security is being managed through a dedicated
project – Project Secure. ClearView also has in place a
Cyber Insurance Program, that provides cover (at an
appropriate level) for losses incurred due to, Damage
to Digital Assets, Cyber Extortion, Data Protection
Reputation Harm, Third Party Liability and Non-
Physical Business Interruption and Extra Expense.
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 ClearView’s RMF.
The 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
• regular reporting and monitoring of risk culture
indicators to enable an understanding of where
issues may exist and provide an opportunity to
address them in a timely manner.
Notes to the Financial Statements
ClearView Wealth Limited
93
2. Results
of the year
This section provides information about the Group’s financial
performance in the period, including:
94
2.1 Segment performance
97
2.2 Earnings per share
98
2.3 Dividends
98
2.4 Fee and other revenue
99
2.5 Investment income
100
2.6 Other operating
expenses
101
2.7 Taxes
Notes to the Financial Statements
94
ClearView Annual Report 2024
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 offers life insurance, superannuation and
investment products and services under the ClearView
brand through two business segments, namely Life
Insurance and Wealth Management (discontinued
operations - see detail in section (b) below).
ClearView acquired a 24.5% holding (48 million shares)
in Centrepoint Alliance Limited (Centrepoint Alliance)
on 1 November 2021 as part of the consideration for
the sale of ClearView’s financial advice businesses to
Centrepoint Alliance.
On 17 November 2023, ClearView announced the sale
of approximately 39.56 million shares in Centrepoint
Alliance to COG Financial Services Limited (COG),
at a share price of 33 cents per share representing
total consideration of $13.05 million. The sale shares
represented approximately 19.9% of Centrepoint
Alliance’s total issued capital at that time. The
remaining 8.44 million shares were subsequently sold
on the market from 17 November 2023, at an average
exit price of circa 27 cents per share, representing
total consideration of $2.2 million. ClearView has fully
divested the investment in Centrepoint Alliance as
at 30 June 2024. ClearView’s holding in Centrepoint
Alliance was until its disposal, accounted for under the
equity accounting method.
The Listed/Other segment 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, and the equity accounted
earnings of Centrepoint Alliance until its sale, 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 in-force (closed)
portfolio of non-advised life insurance products. As at
30 June 2024, ClearView had combined in-force life
insurance premiums of $373.9 million (30 June 2023:
$339.3 million).
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).
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 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.
Notes to the Financial Statements
ClearView Wealth Limited
95
b) Wealth Management (‘investment’ products) - discontinued operations
The Wealth Management business offers products through various structures (see commentary below) and as at
30 June 2024, had total FUM of $3.5 billion (30 June 2023: $3.4 billion).
The Board has reset and simplified the business with the ambition of retaining its core focus on being a life risk
insurance provider. The Board continues to be committed to the exit of the wealth management business given its
lack of scale and limited growth options, with significant progress made during the year.
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.
In November 2023 and January 2024, ClearView signed revised sale agreements with Human Financial. Under
the terms of the revised sale agreements, the proceeds have a cash component of $5 million, with no allowance
for an equity interest in Human Financial. Prior to the sale, in January 2024, ClearView received a pre-completion
dividend of $0.75 million that does not result in CFML’s net tangible assets being less than $5 million. Completion
of the sale occurred on 31 January 2024, with a deferred consideration of $4.85 million (net of $0.15 million
completion payment) received on 28 February 2024.
The superannuation fund trustee, ClearView Life Nominees Pty Limited (CLN) retired as the trustee of the
ClearView Retirement Plan (CRP) in December 2023, with the simultaneous appointment of Equity Trustees
Superannuation Limited (ETSL) (DORA). The completion of these actions clears the way for ClearView to now
fully exit the wealth management segment in the shorter term.
The final milestone remaining is the completion of the trustee’s successor fund transfer (SFT) that will result in
the derecognition of the group life investment contracts and related assets from the Balance Sheet. This is in train
and expected to occur in FY25. Once this occurs, ClearView will have no residual wealth exposure resulting in a
simpler, less complex business, focused on life insurance only.
In accordance with AASB 5 Non-Current Assets Held for Sale and Discontinued Operations, the wealth
management segment continues to meet the criteria to be classified as held for sale in the consolidated financial
statements for the year ended 30 June 2024. As such it is 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 below.
The accounting policies of the reportable segments are the same as the Company’s accounting policies.
Total Revenue1
Inter-Segment Revenue
Consolidated Revenue
(Restated)
2024
2023
2024
2023
2024
2023
$'000
$'000
$'000
$'000
$'000
$'000
Segment revenue
Life Insurance
353,653
303,288
—
—
353,653
303,288
Listed entity/Other
1,371
912
—
—
1,371
912
Consolidated segment revenue
from continuing operations
355,024
304,200
—
—
355,024
304,200
1
Total revenue includes insurance revenue, investment income and fee and other revenue.
Notes to the Financial Statements
96
ClearView Annual Report 2024
Underlying net profit after tax is the Group’s key measure of business performance and is disclosed below by
segment:
Life
Insurance
Listed
Entity/
Other
Continuing
operations
- Total
Discontinued
operations
Total
2024
$'000
$'000
$'000
$'000
$'000
Underlying net profit/(loss) after tax before
equity accounted interest
39,542
(4,242)
35,300
(4,671)
30,629
Equity accounted interest1
—
2,833
2,833
—
2,833
Underlying net profit/(loss) after tax
39,542
(1,409)
38,133
(4,671)
33,462
Changes in loss component2
(12,236)
—
(12,236)
—
(12,236)
Economic assumption impact on AASB17
liability (LRC)3
(2,160)
—
(2,160)
—
(2,160)
Net economic assumption impact on
disabled lives reserve (DLR)3
808
—
808
—
808
Current year timing impact of assumption
changes on contractual service margin
(CSM)4
2,309
—
2,309
—
2,309
Changes in AIACF Impairment5
(16,364)
—
(16,364)
—
(16,364)
Wealth Management impairment6
—
—
—
(10,517)
(10,517)
Wealth Management divestment7
—
—
—
(4,148)
(4,148)
Strategic review/restructure costs8
—
(625)
(625)
—
(625)
Others9
(2,785)
—
(2,785)
(193)
(2,978)
Reported profit/(loss) per management
reported results
9,114
(2,034)
7,080
(19,529)
(12,449)
Reclassification (for statutory results)10
(80)
—
(80)
80
—
Reported profit/(loss) per statutory results
9,034
(2,034)
7,000
(19,449)
(12,449)
2023 (Restated)
Underlying net profit/(loss) after tax before
equity accounted interest
32,114
(3,855)
28,259
(2,711)
25,548
Equity accounted interest1
—
666
666
—
666
Underlying net profit/(loss) after tax
32,114
(3,189)
28,925
(2,711)
26,214
Changes in loss component2
(4,644)
—
(4,644)
—
(4,644)
Economic assumption impact on AASB17
liability (LRC)3
3,031
—
3,031
—
3,031
Net economic assumption impact on
disabled lives reserve (DLR)3
(2,269)
—
(2,269)
—
(2,269)
Changes in AIACF Impairment5
(10,041)
—
(10,041)
—
(10,041)
Wealth Management divestment7
—
—
—
(845)
(845)
Strategic review/restructure costs8
—
(1,128)
(1,128)
—
(1,128)
Others9
(1,572)
—
(1,572)
138
(1,434)
Reported profit/(loss) per management
reported results
16,619
(4,317)
12,302
(3,418)
8,884
Reclassification (for statutory results)10
422
—
422
(422)
—
Reported profit/(loss) per statutory results
17,041
(4,317)
12,724
(3,840)
8,884
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
Share of net profit of investment in associate (Centrepoint Alliance) for the period until disposal in November 2023 (FY23: 12 month period
from 1 July to 30 June 2023).
2
The changes in loss component have been separately reported given capitalised nature of these losses and the level of granularity of reporting
under AASB 17.
3
The economic assumption impact (i.e. discount rate) is the result of changes in the long term discount rates used to determine the (re)
insurance contract asset/liability which is discounted using market discount rates that typically vary at each reporting date and create volatility
in the (re)insurance contract asset/liability and consequently, earnings. ClearView separately reports this volatility.
4
The impact of assumption changes on CSM relates to the current year timing impacts of assumption changes on the CSM. As noted elsewhere
Notes to the Financial Statements
ClearView Wealth Limited
97
in the report, certain assumptions have been updated at 30 June 2024. Whilst the overall impact of these assumption changes is adverse,
under AASB 17 certain timing issues arise whereby the impact on reinsurance profits is recognised faster than the reduction to profit on gross
contracts.
5
The changes in AIACF impairment relate to non- cash impairment of acquisition cost asset and represents a timing difference in the release of
profit and has no impact on underlying earnings over the life cycle of a policy.
6
These relate to the impairment of goodwill, intangible assets and costs to sell of the Wealth Management business. See section 8.5 for detail.
7
Costs associated with the sale of the Wealth Management business.
8
Costs associated with the restructure announced in June 2023 and the strategic review which concluded in November 2022.
9
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.
10
The reclassification relates to income or expense items reported under the Wealth Management segment but not classified as discontinued
operations.
2.2 Earnings per share
Consolidated
2024
2023
Restated
Earnings per share - continuing operations (cents)
Basic earnings (cents)
1.09
1.99
Diluted earnings (cents)
1.09
1.99
Earnings per share - continuing operations (excluding share of net profit and gain on
disposal of investment in associate) (cents)
Basic earnings (cents)
0.65
1.88
Diluted earnings (cents)
0.65
1.88
Earnings per share (cents)
Basic earnings (cents)
(1.94)
1.39
Diluted earnings (cents)
(1.94)
1.39
Reconciliation of earnings used for earnings per share measures
Profit for the year from continuing operations attributable to owners of the Company
($'000)
7,000
12,724
Earnings used in the calculation of basic earnings per share - continuing operations
($'000)
7,000
12,724
Profit for the year from continuing operations attributable to owners of the Company
(excluding share of net profit and gain on disposal of investment in associate) ($'000)
4,167
12,058
Earnings used in the calculation of basic earnings per share - continuing operations
(excluding share of net profit and gain on disposal of investment in associate) ($'000)
4,167
12,058
Profit for the year attributable to owners of the Company ($'000)
(12,449)
8,884
Earnings used in the calculation of basic earnings per share ($'000)
(12,449)
8,884
Reconciliation of weighted average number of ordinary shares used for earnings per
share measures
Weighted average number of ordinary shares used in the calculation of basic earnings per
share (000's)
641,474
640,122
Shares deemed to be dilutive in respect of the employee rights plan (000's)
429
68
Weighted average number of ordinary shares used in the calculation of diluted earnings
per share (all measures) (000's)
641,903
640,190
Notes to the Financial Statements
98
ClearView Annual Report 2024
2.3 Dividends
Consolidated and Company
2024
2023
Per share
$'000
Per share
$'000
Dividend payments on Ordinary shares
2024 interim dividend (2023: nil) (cps)
1.5
9,916
—
—
2023 final dividend (2023: 2022 final dividend) (cps)
3.0
19,831
2.0
13,220
Total dividends on ordinary shares paid to owners of the Company
4.5
29,747
2.00
13,220
Dividends not recognised in the consolidated statement of
financial position
Dividends declared since balance date
2024 final dividend (2023: 2023 final dividend) (cps)
1.7
11,067
3.0
19,831
Dividend franking account
Amount of franking credit available for subsequent reporting periods
based on a tax rate of 30% (2023: 30%)
14,006
27,238
The Directors have declared a fully franked $11.1 million final cash dividend for the year ended 30 June 2024 (2023:
$19.8 million), equivalent to 1.7 cents per share. This brings the total dividends paid in respect of FY24 to 3.2 cents
per share, comparing with dividends of 3.0 cents per share for FY23. The dividend reinvestment plan (DRP) has
been reinstated and will operate for the FY24 final dividend.
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)
(FY24 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
Consolidated
Company
2024
2023
2024
2023
$'000
$'000
$'000
$'000
Funds management fees
6
4
—
—
Other income
31
68
—
107
Total fee and other revenue
37
72
—
107
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.
Notes to the Financial Statements
ClearView Wealth Limited
99
2.5
Investment income
Consolidated
Company
2024
2023
2024
2023
$'000
$'000
$'000
$'000
Interest income
• Cash and cash equivalents
4,429
2,432
868
346
• Investment securities at FVTPL
16,457
10,704
—
—
• Loans and advances
127
141
3,121
2,654
Dividend income
—
—
4,830
21,946
Distribution income
63
36
—
—
Total investment income
21,076
13,313
8,819
24,946
Interest income
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.
Notes to the Financial Statements
100
ClearView Annual Report 2024
2.6 Other operating expenses
Consolidated1
Company
2024
2023
2024
2023
$'000
$'000
$'000
$'000
Restated
Administration expenses
Administration expenses
13,956
11,797
1,803
1,549
Total administration expenses
13,956
11,797
1,803
1,549
Employee costs and directors' fees
Employee expenses
—
—
18
—
Share based payments
—
—
(109)
—
Directors’ fees
—
—
497
660
Total employee costs and directors’ fees
—
—
406
660
Other expenses
Impairment losses on investments in subsidiaries
—
—
3,842
—
Total other expenses
—
—
3,842
—
Total operating expenses
13,956
11,797
6,051
2,209
1
The consolidated other operating expenses are included as part of the insurance service and other expenses. Refer to section 5.3.2 for detail.
Consolidated
Company
2024
2023
2024
2023
$'000
$'000
$'000
$'000
Restated
Finance costs
Interest expenses
9,235
7,242
9,235
7,242
Other finance costs
937
1,001
795
820
Total finance costs
10,172
8,243
10,030
8,062
Consolidated
Company
2024
2023
2024
2023
$
$
$
$
Remuneration of auditors
Auditor of the parent entity
Audit and review of financial reports
925,808
466,000
235,768
140,000
Audit of APRA and ASIC regulatory returns
76,232
200,205
—
—
Audit of Managed Investment Schemes
89,856
116,000
—
—
Total remuneration for audit services
1,091,896
782,205
235,768
140,000
Other non-audit services - other assurance and agreed-upon
procedures under other legislation or contractual agreements
5,200
57,000
5,200
2,000
Other non-audit services - consulting1
—
818,000
—
—
Total remuneration for non-audit services
5,200
875,000
5,200
2,000
Total remuneration
1,097,096
1,657,205
240,968
142,000
1
This relates to the AASB 17 consulting services provided before Ernst & Young was appointed as ClearView’s auditors.
Notes to the Financial Statements
ClearView Wealth Limited
101
2.7
Taxes
Income tax
Consolidated
Company
2024
2023
2024
2023
$'000
$'000
$'000
$'000
Restated
a) Income tax recognised in profit or loss
Income tax expense/(benefit) comprises:
Current tax expense/(benefit)
5,588
7,219
—
(2,377)
Deferred tax expense/(benefit)
3,667
4,465
(2,492)
228
Over provided in prior years – current tax expense/(benefit)
(3,720)
87
75
(638)
Under provided in prior years – deferred tax expense/(benefit)
404
(114)
—
(136)
Income tax expense/(benefit)
5,939
11,657
(2,417)
(2,923)
Income tax expense/(benefit) from discontinued operations
4,408
7,748
—
—
Income tax expense/(benefit) from continuing operations
1,531
3,909
(2,417)
(2,923)
b) Tax losses
Unused tax losses for which no deferred tax asset has been
recognised
7,501
1,463
7,501
1,463
Potential tax benefit
2,250
439
2,250
439
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:
Consolidated
Company
2024
2023
2024
2023
$'000
$'000
$'000
$'000
Restated
c) Reconciliation of income tax expense to prima facie tax
payable
Profit/(loss) before income tax expense from discontinued
operations
(15,041)
3,908
—
—
Profit/(loss) before income tax expense from continuing operations
8,531
16,633
(9,441)
15,448
Profit before income tax expense
(6,510)
20,541
(9,441)
15,448
Policyholder tax (expense) credit recognised as part of the change
in policyholder liabilities in determining profit before tax
(8,441)
(9,218)
—
—
Profit before income tax excluding tax charged to policyholders
(14,951)
11,323
(9,441)
15,448
Prima facie tax calculated at 30%
(4,485)
3,397
(2,832)
4,634
Tax effect of amounts which are non deductible/assessable in
calculating taxable income:
Dividends received from subsidiaries
—
(1,450)
(6,583)
Non deductible (assessable) book gain on sale
(296)
97
—
—
Non assessable income
(892)
(246)
(850)
(200)
Non deductible transaction costs
1,153
—
1,730
—
Other non deductible expenses
2,385
66
910
—
Over (under) provision in prior years
(367)
(875)
75
(774)
Income tax expense/(benefit) attributable to shareholders
(2,502)
2,439
(2,417)
(2,923)
Income tax expense/(benefit) attributable to policyholders
8,441
9,218
—
—
Income tax expense/(benefit)
5,939
11,657
(2,417)
(2,923)
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
—
—
—
—
Notes to the Financial Statements
102
ClearView Annual Report 2024
Consolidated
Company
2024
2023
2024
2023
$'000
$'000
$'000
$'000
Restated
Deferred tax balances
Deferred tax assets1
The balance comprises temporary differences attributable to:
Tax losses carried forward
43,773
39,376
2,820
—
Accruals not currently deductible
497
567
71
27
Depreciable and amortisable assets
15
15
—
—
Provisions not currently deductible
3,578
4,530
209
264
Unrealised losses carried forward
703
2,386
—
—
Lease assets
210
44
—
—
Deferred tax asset
48,776
46,918
3,100
291
Deferred tax asset from discontinued operations
(146)
285
—
—
Deferred tax asset from continuing operations
48,922
46,633
3,100
291
Deferred tax liabilities
The balance comprises temporary differences attributable to:
Unrealised gains on investments
5,085
—
—
—
Prepaid expenses
603
549
—
—
Software amortisation
474
—
—
—
Capitalised expenses
31
36
35
35
Deferred tax liability
6,193
585
35
35
Deferred tax liability from discontinued operations
5,085
—
—
—
Deferred tax liability from continuing operations
1,108
585
35
35
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 $7.5 million (tax effected $2.3 million) consolidated, of
which none relating to life investment contracts (30 June 2023: tax losses of a capital nature of $1.5 million with tax effected $0.5 million
consolidated, of which none relating to life investment contracts), and $7.5 million (tax effected $2.3 million) for the Company (30 June 2023:
$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 recognised if the temporary difference arises from the
initial recognition of goodwill.
Notes to the Financial Statements
ClearView Wealth Limited
103
The carrying amount of deferred tax assets is reviewed
at the end of each reporting period and reduced to
the extent that it is no longer probable that sufficient
taxable profits will be available to allow all or part of
the asset to 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 reporting period, to recover or settle the carrying
amount 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 income taxes levied by the same taxation
authority and the Group intends to settle its current
tax assets and 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 head company of the tax consolidated group is
treated as a life insurance company for income tax
purposes as one of the subsidiary members of the tax
consolidated group is a life insurance company.
Entities within the tax consolidated group have
entered into a tax sharing and funding agreement with
the head 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.
Under the terms of the tax funding arrangement,
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.
The tax funding agreement also provides for the head
entity to make payments for tax losses of a group
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 ClearView Financial
Management Limited (CFML) to Human Financial on
31 January 2024, CFML ceased to be wholly-owned
subsidiary and consequently exited the ClearView
Wealth Limited tax consolidated group. Upon exit,
ClearView Wealth Limited agreed to release CFML
from its obligation under the tax sharing and funding
agreement on 31 January 2024.
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.
Notes to the Financial Statements
104
ClearView Annual Report 2024
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.
Deferred tax asset – AASB 17 transition and
income tax losses
As a result of the transition to AASB 17, the Group’s
accounting net life insurance contract liability, for
which the carrying amount will be settled in future
periods has increased. This results in an increase in
the deductible temporary differences and a related
deferred tax asset of $35.9 million on transition
and a further $3.5 million in FY23 bringing the total
related deferred tax asset to $39.4 million, given the
movement in the net life insurance contract liability is
deductible when settled in the future.
While the Australian Taxation Office (ATO) and
Treasury has yet to provide any announcement or
guidance in respect of the AASB 17 impacts on life
insurance companies, there is no indication that AASB
17 will result in a change to the income tax laws.
During the 2024 year, in addition to the income tax
deductions of $131.3 million (deferred tax asset of
$39.4 million) due to the net movement in the net life
insurance contract liability on AASB 17 transition, the
Group further incurred an income tax loss from its
operations of $14.7 million. This resulted in a carried
forward income tax loss of $146 million. Given that it is
probable that the Group’s future taxable profit will be
available against which the tax losses can be utilised,
the deferred tax asset of $43.8 million has been
recognised on balance sheet as at 30 June 2024.
Notes to the Financial Statements
ClearView Wealth Limited
105
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
106 3.1 Receivables
106 3.2 Payables
107 3.3 Investments
109 3.4 Financial risk management
Notes to the Financial Statements
106
ClearView Annual Report 2024
3. Receivables, payables and investments
3.1
Receivables
Consolidated
Company
30 June
2024
30 June
2023
30 June
2024
30 June
2023
$'000
$'000
$'000
$'000
Restated
Other premium receivable1
17,145
15,053
—
—
Investment income receivable
—
—
520
495
Prepayments
5,533
3,342
48
46
Receivables from controlled entities
—
—
3,840
8,669
Related party receivables
—
516
—
—
Loans receivable net of provision2
6,265
3,204
3,979
705
Other debtors
2,362
269
174
—
Total receivables
31,305
22,384
8,561
9,915
1
Other premium receivable includes rights to the realised tax benefit received by HUB24 Super Fund for the insurance premium deduction. This
balance is not part of the insurance contract assets or liabilities and it is measured under AASB 9.
2
Loan receivable includes $1.4 million (30 June 2023: $1.4 million) loans to KMP (which are related to the ESP Plan), and $3.25 million (30 June
2023: nil) loan to EQT (refer to section 8.5 for detail).
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.
3.2
Payables
Consolidated
Company
30 June
2024
30 June
2023
30 June
2024
30 June
2023
$'000
$'000
$'000
$'000
Restated
Trade payables
2,526
5,138
352
441
Employee entitlements
6,669
7,311
18
7
Advance from customers
847
699
—
—
Life investment premium deposits
129
470
—
—
Payables to controlled entities
—
—
2,534
487
Outstanding investment settlements
—
4,514
—
—
Other creditors
1,611
3,429
1,409
1,551
Total payables
11,782
21,561
4,313
2,486
Payables
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.
Notes to the Financial Statements
ClearView Wealth Limited
107
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.
3.3 Investments
Consolidated
Company
30 June
2024
30 June
2023
30 June
2024
30 June
2023
$'000
$'000
$'000
$'000
Growth investments
Investment in Group Companies
—
—
413,822
425,778
Equity investments
1,681,778
1,708,780
—
—
1,681,778
1,708,780
413,822
425,778
Interest-bearing investments1,2
Investments in subordinated debt
—
—
30,000
30,000
Short-term money
1,147
5,403
—
—
Government and semi-government bonds
182,091
165,322
—
—
Corporate bonds
140,085
117,828
—
—
Floating rate notes
92,059
81,884
—
—
415,382
370,437
30,000
30,000
Non-interest bearing investments
Short-term discount securities
161,258
184,266
—
—
161,258
184,266
—
—
Included in assets held for sale (see section 8.5(d))
(1,834,709) (1,868,598)
—
(11,956)
Total investments
423,709
394,885
443,822
443,822
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 2024 an investment of
$429.0 million including $422.3 million in interest securities and $6.7 million in cash (30 June 2023: $413.4 million including $393.7 million in
interest securities and $19.7 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.
Notes to the Financial Statements
108
ClearView Annual Report 2024
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.
The Group has elected to use their fair value option
for all investments as there would otherwise be an
accounting mismatch as the assets are held against
investment contract liabilities.
The Company’s investments in subordinated debt are
measured at fair value through profit or loss.
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
receivables and loans receivables.
Investments in Group Companies
The investments in Group Companies are measured at
costs less accumulated impairment. Impairments are
assessed at each financial reporting period.
Impairment of financial assets
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 or loss.
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 for which there has been a significant
increase in credit risk since initial recognition, a loss
allowance is required for credit losses expected over
the remaining life of the exposure, irrespective of the
timing of the default (a lifetime ECL).
For trade receivables and contract assets, the Group
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.
Offsetting of financial instruments
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 settle the liabilities
simultaneously.
Fair value hierarchy
The table below summarises financial instruments
carried at fair value, by valuation method. The different
levels have been defined as follows:
• 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
Notes to the Financial Statements
ClearView Wealth Limited
109
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 2024 and 30
June 2023.
Consolidated
Level 1
Level 2
Level 3
Total
$'000
$'000
$'000
$'000
Financial assets
30 June 2024
Growth investments
1,681,778
—
—
1,681,778
Interest bearing investments
183,238
232,144
—
415,382
Non-interest bearing investments
161,258
—
—
161,258
Included in assets held for sale (see section 8.5(d))
(1,752,431)
(82,278)
—
(1,834,709)
Total
273,843
149,866
—
423,709
30 June 2023
Growth investments
1,708,780
—
—
1,708,780
Interest bearing investments
170,725
199,712
—
370,437
Non-interest bearing investments
184,266
—
—
184,266
Included in assets held for sale (see section 8.5(d))
(1,793,382)
(75,216)
—
(1,868,598)
Total
270,389
124,496
—
394,885
Financial Liabilities
30 June 2024
Life investment contract liability
—
1,386,866
—
1,386,866
Liability to non-controlling interest in controlled unit trusts
—
467,562
—
467,562
Included in liabilities directly associated with assets held for
sale (see section 8.5(d))
—
(1,854,116)
—
(1,854,116)
Total
—
312
—
312
30 June 2023
Life investment contract liability
—
1,345,463
—
1,345,463
Liability to non-controlling interest in controlled unit trusts
—
557,485
—
557,485
Included in liabilities directly associated with assets held for
sale (see section 8.5(d))
—
(1,902,623)
—
(1,902,623)
Total
—
325
—
325
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.
a) Financial risk management objectives
The primary financial risks borne by the Group relate to the (re)insurance contract assets and liabilities, and 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 of the life investment contracts as the investment performance
Notes to the Financial Statements
110
ClearView Annual Report 2024
on those assets is passed through, in full, to these
policyholders (referred to below as Policyholder
assets). Nonetheless, the Group has a secondary
exposure to the Policyholder assets, via the impact
on the fees charged by the Group which vary with the
level of Policyholder funds under management, as well
as related reputational exposure.
b) Market risk
Market risk is the risk that (re)insurance contract assets
and liabilities will be affected by the changes in interest
rates and financial assets will be affected by changes in
interest rates, foreign exchange rates and 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 2024, ClearView’s
shareholder related assets were not invested in equities
and therefore not exposed to equity price risk.
In contrast to this, the Policyholder assets 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.
The investment of the Policyholder assets is undertaken
in accordance with the Investment Policy and
Guidelines approved by the Board, which inter alia
stipulates the investment allocation mix, the portfolio’s
risk characteristics, management response plans and
the use of derivatives.
To the extent required, capital reserves are held in
accordance with the ICAAP with respect to the Group’s
residual fee risk exposure.
c) Credit 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 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.
Notes to the Financial Statements
ClearView Wealth Limited
111
The following table reflects the shareholder financial assets with credit risk exposure monitored by the CIC. It
excludes policyholder financial assets and therefore represents shareholder assets invested in interest bearing
securities at the balance date.
Consolidated
Company
2024
2023
2024
2023
$'000
$'000
$'000
$'000
Cash and cash equivalents, term deposits and investments
Rating
AAA
304,204
298,096
—
—
AA
148,223
134,861
13,593
13,929
A
41,190
48,787
—
—
BBB
30,034
28,941
—
—
523,651
510,685
13,593
13,929
In addition to the credit risk exposures above, the Group’s balance sheet as at 30 June 2024 reflects a $147.8
million (30 June 2023: $118.5 million) exposure to Swiss Re Life & Health Australia Ltd in relation to reinsurer’s
share of contract liabilities. Credit risk associated with receivables is considered low. The main receivables balance
is in relation to loans receivable and prepayments. The concentration of other receivables is spread across the
various debtors except for the other premium receivable of $17.1 million from HUB24 Super Fund (30 June 2023:
15.0 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 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.
Under the terms of the Group’s products (issued via ClearView Life) the payment of unit fund redemptions to
policyholders may be delayed, if necessary, until funds are available. To date no such delays have been imposed.
Notes to the Financial Statements
112
ClearView Annual Report 2024
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.
Consolidated
2024
Less than
3 months
3 to 6
months
6 months
to a year
1 year
and over
Over 5
years
Total
$'000
$'000
$'000
$'000
$'000
$'000
Receivables
2,189
—
173
—
—
2,362
Other premium receivable
—
—
17,145
—
—
17,145
Loan receivables net of provision
—
—
3,250
3,015
—
6,265
Prepayments
2,589
730
1,666
548
—
5,533
Total
4,778
730
22,234
3,563
—
31,305
2023
Receivables
269
—
—
—
—
269
Other premium receivable
—
—
15,053
—
—
15,053
Loan receivables net of provision
—
—
—
3,204
—
3,204
Prepayments
2,164
483
673
22
—
3,342
Related party receivable net of provision
516
—
—
—
—
516
Total
2,949
483
15,726
3,226
—
22,384
Company
2024
Less than
3 months
3 to 6
months
6 months
to a year
1 year
and over
Over 5
years
Total
$'000
$'000
$'000
$'000
$'000
$'000
Trade receivables
22
20
180
—
—
222
Receivables from controlled entities
4,360
—
—
—
—
4,360
Loan receivables net of provision
—
—
3,250
729
—
3,979
Total
4,382
20
3,430
729
—
8,561
2023
Trade receivables
21
15
10
—
—
46
Receivables from controlled entities
9,164
—
—
—
—
9,164
Loan receivables net of provision
—
—
—
705
—
705
Total
9,185
15
10
705
—
9,915
Notes to the Financial Statements
ClearView Wealth Limited
113
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.
Consolidated
2024
Less than
3 months
3 to 6
months
6 months
to a year
1 year
and over
Over 5
years
Total
$'000
$'000
$'000
$'000
$'000
$'000
Payables
11,782
—
—
—
—
11,782
Lease liabilities
767
767
1,549
2,896
—
5,979
Borrowings1
420
420
840
34,574
—
36,254
Subordinated debt1
1,935
1,935
3,870
30,963
86,611
125,314
Total
14,904
3,122
6,259
68,433
86,611
179,329
2023
Payables
22,072
—
—
—
—
22,072
Lease liabilities
810
803
1,553
5,979
—
9,145
Borrowings1
213
213
426
17,797
—
18,649
Subordinated debt1
1,907
1,907
3,813
30,507
94,067
132,201
Total
25,002
2,923
5,792
54,283
94,067
182,067
Company
2024
Less than
3 months
3 to 6
months
6 months
to a year
1 year
and over
Over 5
years
Total
$'000
$'000
$'000
$'000
$'000
$'000
Payables
4,313
—
—
—
—
4,313
2023
Payables
2,486
—
—
—
—
2,486
1
Included contractual interest payments are undiscounted and calculated based on prevailing market floating rates as applicable at the
reporting date.
The following tables summarise the maturity analysis of the Group’s insurance contract liabilities and reinsurance
contract assets. The tables have been drawn up based on the present value of the future cash flows.
Consolidated
2024
Less than
1 year
1 to 2
years
2 to 3
years
3 to 4
years
4 to 5
years
Over 5
years
Total
$'000
$'000
$'000
$'000
$'000
$'000
$'000
Insurance contract liabilities
(96,824)
(25,605)
(13,330)
(9,608)
(7,903)
(361,486)
(514,756)
Reinsurance contract assets
(3,833)
(2,871)
(2,428)
(1,337)
(205)
156,710
146,036
2023
Insurance contract liabilities
(87,638)
(11,744)
(6,537)
(3,919)
(2,383)
(292,436)
(404,657)
Reinsurance contract assets
(7,067)
(8,903)
(8,888)
(8,220)
(7,372)
72,171
31,721
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 the shareholder funds in relation to the insurance liabilities (including inflation), claims and
capital reserves and surplus capital in the life company. The PIMCO mandate is monitored on a periodic basis by
the CIC.
At 30 June 2024, $429.0 million including $422.3 million in interest securities and $6.7 million in cash (30 June
2023: $413.4 million including $393.7 million in interest securities and $19.7 million in cash) is invested in the
PIMCO funds. An overall investment income of $14.1 million after tax was made in the year ended 30 June 2024
(2023: income of $10.4 million).
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
Notes to the Financial Statements
114
ClearView Annual Report 2024
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. ClearView pays an
interest charge on the liabilities related to the settlement of the incurred liabilities. As at 30 June 2024, ClearView
received $193.6 million of the reinsurer’s share of incurred claims liability (30 June 2023: $176.7 million).
The tables below detail the shareholder’s exposure to interest rate risk at the balance sheet date.
Consolidated
Company
2024
2023
2024
2023
$'000
$'000
$'000
$'000
Variable interest rate exposures
Financial assets
Cash and cash equivalents
78,404
94,045
13,593
13,929
Floating rate notes
57,285
44,529
—
—
Total
135,689
138,574
13,593
13,929
Financial liabilities
Borrowings
31,000
16,000
—
—
Subordinated debt
75,000
75,000
—
—
Reinsurance contract liabilities
Reinsurer's share of incurred claims liability received
193,571
176,730
—
—
Total
299,571
267,730
—
—
Interest rate sensitivity analysis for floating rate exposures
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% (2023: 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
Effect on net
exposure
Effect on
operating profit
Effect on net
exposure
Consolidated
Consolidated
Company
Company
2024
2023
2024
2023
2024
2023
2024
2023
$'000
$'000
$'000
$'000
$'000
$'000
$'000
$'000
±1.0% (2023: ±1.0%)
∓1639
∓1292
∓1639
∓1292
±136
±139
±136
±139
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 of the life investment
contracts.
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 policyholders of the life investment contracts 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.
Notes to the Financial Statements
ClearView Wealth Limited
115
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
115
4.1 Goodwill and intangibles
116
4.2 Recovery of intangible
assets and goodwill
118
4.3 Provisions
Notes to the Financial Statements
116
ClearView Annual Report 2024
4. Non-financial assets and liabilities
4.1
Goodwill and intangibles
Consolidated
2024
Goodwill
Capitalised
software
Client
Book
Total
intangibles
$'000
$'000
$'000
$'000
Gross carrying amount
Balance at the beginning of the financial year
11,952
60,108
65,017
125,125
Acquired directly during the year1
—
11,434
—
11,434
Written-off during the year
—
—
(65,017)
(65,017)
Balance at the end of the financial year
11,952
71,542
—
71,542
Accumulated amortisation and impairment losses
Balance at the beginning of the year
7,941
36,031
64,987
101,018
Amortisation expense in the current year
—
3,762
—
3,762
Written-off during the year
—
—
(64,987)
(64,987)
Balance at the end of the financial year
7,941
39,793
—
39,793
Net book value
Balance at the beginning of the financial year
4,011
24,077
30
24,107
Balance at the end of the financial year
4,011
31,749
—
31,749
2023
Goodwill
Capitalised
software
Client
Book
Total
intangibles
$'000
$'000
$'000
$'000
Gross carrying amount
Balance at the beginning of the financial year
20,452
66,616
65,017
131,633
Acquired directly during the year
—
12,690
—
12,690
Reclassification to assets held for sale (see section 8.5(d))
(8,500)
(19,198)
—
(19,198)
Balance at the end of the financial year
11,952
60,108
65,017
125,125
Accumulated amortisation and impairment losses
Balance at the beginning of the year
7,941
49,278
64,987
114,265
Amortisation expense in the current year
—
3,069
—
3,069
Reclassification to assets held for sale (see section 8.5(d))
—
(16,316)
—
(16,316)
Balance at the end of the financial year
7,941
36,031
64,987
101,018
Net book value
Balance at the beginning of the financial year
12,511
17,338
30
17,368
Balance at the end of the financial year
4,011
24,077
30
24,107
1
Includes $9.2 million (30 June 2023: $11.2 million) of capitalised costs in relation to the capitalisation of configuration and customisation costs
in SaaS arrangements.
As required under accounting standards the Group completes an impairment assessment at each reporting date.
As at 30 June 2024, no impairment charge was recognised (2023: 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
Notes to the Financial Statements
ClearView Wealth Limited
117
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.
Capitalisation of configuration and customisation
costs in SaaS arrangements
In implementing SaaS arrangements, the Group has
developed software code that enhances, modifies
and creates additional capability to the software
to which it owns the intellectual property. This
software increases the functionality of the SaaS
arrangement cloud-based 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 $9.2
million (2023: $11.2 million) as intangible assets in
respect of customisation and configuration costs
incurred in implementing SaaS arrangements. These
intangible assets are amortised on a straight-line basis
over the useful life of 10 years. As at 30 June 2024,
the accumulated amortisation of $5.0 million (30
June 2023: $2.0 million) has been recognised for the
intangible assets in use.
Client books
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
aging 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:
2024
2023
Software
Up to 3 years,
with major
core software
infrastructure
amortised over a
period up to 10
years
Up to 3 years,
with major
core software
infrastructure
amortised over a
period up to 10
years
Client books
6–10 years
6–10 years
Goodwill
Indefinite
Indefinite
Impairment testing
Goodwill and intangible assets that have indefinite
useful lives are tested at least annually for impairment.
Other intangible assets are reviewed for impairment
whenever events or changes in circumstances indicate
that the carrying amount may not be recoverable.
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
The goodwill and intangibles primarily arose from the
acquisition of:
• the business of Community and Corporate Pty
Limited in April 2009;
• ClearView Group Holdings Pty Limited in June
2010;
• Matrix Planning Solutions Limited in October 2014;
and
• 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
Management CGU’s of the Group based on the
expected synergies expected to be gained by each
CGU within the Group.
At the balance date the goodwill of $4.0 million was
allocated to the Life Insurance segment.
As a result of the Wealth Management divestment,
the goodwill of $8.5 million recognised within the
Wealth Management CGU’s has been impaired since
31 December 2023 and the impairment is part of the
disposal group. See section 8.5 for detail.
The goodwill recognised within the Life Insurance
CGU’s 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.
The recoverable amount for the Life Insurance CGU’s
has been determined based on the embedded value
calculations as at 30 June 2024. 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 expressed in today’s dollars.
No account is taken of future new business in the
embedded value calculations.
Notes to the Financial Statements
118
ClearView Annual Report 2024
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 (if applicable);
• Outflows;
• Maintenance costs; and
• Discount rates.
The embedded value uses assumptions that are
consistent with those adopted for contract liabilities in
this financial report.
A risk free rate of 4% has been adopted for the
purposes of the embedded value calculations at 30
June 2024 (30 June 2023: 4.0%) with a range of
discount range margins of 3%, 4% and 5% above the
risk free rate.
See section 5.2 for actuarial estimates and assumptions
that has been taken into accounting in setting these
assumptions.
For sensitivities on the EV calculations and their
potential 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 2024, no impairment was required to
the carrying value of goodwill within the Life Insurance
CGU.
Capitalised software impairment
At each reporting period the internally generated
software 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.
As a result of the Wealth Management divestment,
the front end wealth portal of $2.9 million recognised
within the Wealth Management CGU’s has been
impaired since 31 December 2023 and the impairment
is part of the the disposal group. See section 8.5 for
detail.
As at 30 June 2024, no impairment was required to the
carrying value of capitalised software.
Notes to the Financial Statements
ClearView Wealth Limited
119
4.3 Provisions
Consolidated
Company
2024
2023
2024
2023
$'000
$'000
$'000
$'000
Current and non current
Make good provision
5
145
—
—
Employee leave provisions
5,353
5,306
—
—
Provision for restructuring
—
2,323
—
—
Provision for onerous lease
—
29
—
—
Other provisions
19
31
18
28
Total
5,377
7,834
18
28
Movement of each class of provision during the financial year is set out below:
Consolidated
2024
Make good
provision1
Employee
leave
provision2
Provision for
restructuring3
Provision for
onerous lease
Other
provision4
Total
Balance at the beginning of
the financial year (restated)
145
5,306
2,323
29
31
7,834
Additional provisions raised
8
1,343
430
—
20
1,801
Utilised during the period
(148)
(1,296)
(2,753)
(29)
(32)
(4,258)
Balance at the end of the
financial year
5
5,353
—
—
19
5,377
2023
Balance at the beginning of
the financial year
193
5,044
693
168
223
6,321
Impact of initial application of
AASB 174
—
—
—
—
(202)
(202)
Balance at the beginning of
the financial year (restated)
193
5,044
693
168
21
6,119
Additional provisions raised
(restated)
25
1,181
2,073
—
19
3,298
Utilised during the period
(restated)
(73)
(919)
(443)
(139)
(9)
(1,583)
Balance at the end of the
financial year (restated)
145
5,306
2,323
29
31
7,834
Company
Other provision
2024
2023
Balance at the beginning of the financial
year
28
19
Additional provisions raised
20
20
Utilised during the period
(30)
(11)
Balance at the end of the financial year
18
28
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
The opening balance of other provision at 1 July 2022 and its movement during FY23 have been restated as a result of the initial application of
AASB 17 that impacts the provision for long outstanding reinsurance recovery receivables. See section 9.6 for detail.
Notes to the Financial Statements
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ClearView Annual Report 2024
Accounting policy
Provisions are recognised when the Group has a
present obligation (legal or constructive) as a result
of a past event, it is probable that the Group will
be required to settle the obligation, and a reliable
estimate can be made of the amount of the obligation.
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).
When some or all of the economic benefits required to
settle a provision are expected to be recovered from a
third party, a receivable is recognised as an asset if it
is virtually certain that reimbursement will be received
and the amount of the receivable can be measured
reliably.
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.
Onerous contracts
Present obligations arising under onerous contracts
are recognised and measured as provisions. An
onerous contract is considered to exist where the
Group has a contract under which the unavoidable
costs of meeting the obligations under the contract
exceed the economic 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 those affected by it. The
measurement of a restructuring provision includes
only the direct expenditures arising from the
restructuring, which are those amounts that are both
necessarily entailed by the restructuring and not
associated with the ongoing activities of the entity.
Notes to the Financial Statements
ClearView Wealth Limited
121
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.
122
5.1 Insurance and reinsurance
contract accounting
treatment
131
5.2 Significant judgements
and estimates in applying
AASB 17
135
5.3 Insurance revenue and
expenses
139
5.4 Net investment result
140
5.5 Insurance contracts issued
145
5.6 Reinsurance contracts held
149
5.7 Capital adequacy
Notes to the Financial Statements
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ClearView Annual Report 2024
Insurance contracts are contracts under which the Group accepts significant insurance risk from a policyholder by
agreeing to compensate the policyholder if a specified uncertain future event adversely affects the policyholder.
In making this assessment, all substantive rights and obligations, including those arising from law or regulation,
are considered on a contract-by-contract basis. The Group uses judgement to assess whether a contract transfers
insurance risk (that is, if there is a scenario with commercial substance in which the Group has the possibility of a
loss on a present value basis) and whether the accepted insurance risk is significant.
Contracts that have a legal form of insurance but do not transfer significant insurance risk and expose the Group
to financial risk are classified as life investment contracts and follow financial instruments accounting under
AASB 9.
In the normal course of business, the Group uses reinsurance to mitigate its risk exposures. A reinsurance contract
transfers risk if it transfers a component of the insurance risk resulting from the insured portion of the underlying
insurance contracts, even if it does not expose the reinsurer to the possibility of a significant loss.
The Group does not issue any contracts with direct participating features.
Summary of measurement approaches
AASB 17 introduces different measurement models in calculating (re)insurance contract assets and liabilities
reflecting the different extents of policyholder participation in investment or insurance entity performance:
non-participating or indirect (the general measurement model (GMM)) and direct participating (the variable fee
approach (VFA)). For short-duration contracts, AASB 17 permits a simplified approach (the premium allocation
approach (PAA)), which can be applied to contracts that have a coverage period of 12 months or less or for which
such simplification would produce a measurement of the liability for remaining coverage that would not differ
materially from the one that would be produced applying GMM.
ClearView has applied the GMM for recognition and measurement of all insurance contracts issued and
reinsurance contracts held.
Product classification
Measurement model
Contracts issued
Life insurance contracts
Insurance contracts issued
General measurement model (GMM)
Life investment contracts
Financial instruments
Financial liabilities measured at
FVTPL under AASB 9
Reinsurance contracts held
Reinsurance contracts
Reinsurance contracts held
General measurement model
5.1
Insurance and reinsurance contract accounting treatment
5.1.1 Separating components from insurance and reinsurance contracts
The Group assesses its life insurance and reinsurance contracts to determine whether they contain components
which must be accounted for under an accounting standard other than AASB 17 (distinct non insurance
components). After separating any distinct components, the Group must apply AASB 17 to all remaining
components of the (host) insurance contract. As at the date of this report, the Group’s products do not include
distinct components that require separation.
5.1.2 Level of aggregation
The Group has defined portfolios of insurance contracts (PICs) issued based on its business sold under ClearView
ClearChoice (open to new business), LifeSolutions (closed to new business) and a group of older legacy non-
advice based business (closed to new business) due to the facts that the products are subject to similar risks and
managed together. The business is also split between stepped and non-stepped (level) premium and lump sum
and disability income features. Each portfolio is further disaggregated into groups of contracts (GICs) split by
profitability (or onerous) categories and contain contracts issued no more than 12 months apart (cohorts).
Portfolios of reinsurance contracts held are assessed for aggregation separately from portfolios of insurance
contracts issued. The level of aggregation of reinsurance contracts is determined in the same manner as the
insurance contracts issued, apart from the split between stepped and non-stepped premium which does not apply
to the groups of reinsurance contracts.
Notes to the Financial Statements
ClearView Wealth Limited
123
These groups represent the level of aggregation at
which insurance and reinsurance contracts are initially
recognised and measured. Such groups are not
subsequently reconsidered.
5.1.3 Recognition and derecognition
5.1.3.1 Contract recognition
The Group recognises groups of insurance contracts
that it issues from the earliest of the following:
• The beginning of the coverage period of the group
of contracts;
• The date when the first payment from a policyholder
in the group is due, or when the first payment is
received if there is no due date; and
• For a group of onerous contracts, as soon as
facts and circumstances indicate that the group is
onerous.
The Group recognises a group of reinsurance contracts
held it has entered into from the earliest of the
following:
• The beginning of the coverage period of the group
of reinsurance contracts held. However, the Group
delays the recognition of a group of reinsurance
contracts held that provide proportionate coverage
until the date when any underlying insurance
contract is initially recognised, if that date is later
than the beginning of the coverage period of the
group of reinsurance contracts held; and
• The date the Group recognises an onerous group of
underlying insurance contracts if the Group entered
into the related reinsurance contract held in the
group of reinsurance contracts held at or before that
date.
The reinsurance contracts held by the Group provide
proportionate cover. Therefore the Group does not
recognise a proportional reinsurance contract held until
at least one underlying direct insurance contract has
been recognised.
The Group adds new contracts to the group in the
reporting period in which that contract meets one of
the criteria set out above.
5.1.3.2 Contract modification and derecognition
An insurance contract is derecognised when it is:
• extinguished (that is, when the obligation specified
in the insurance contract expires or is discharged or
cancelled); or
• the contract is modified and certain additional
criteria are met.
When an insurance contract is modified by the Group
as a result of an agreement with the counterparties
or due to a change in regulations, the Group treats
changes in cash flows caused by the modification as
changes in estimates of the fulfilment cash flows (FCF),
unless the conditions for the derecognition of the
original contract are met. The Group derecognises the
original contract and recognises the modified contract
as a new contract if the modified terms had been
included at contract inception and the Group would
have concluded that the modified contract:
• is not in scope of AASB 17;
• results in different separable components;
• results in a different contract boundary; or
• belongs to a different group of contracts.
When an insurance contract is derecognised from
within a group of insurance contracts, the Group:
• Adjusts the FCF to eliminate the present value
of future cash flows and risk adjustment for non-
financial risk relating to the rights and obligations
removed from the group;
• Adjusts the contractual service margin (CSM)
(unless the decrease in the FCF is allocated to
the loss component of the liability for remaining
coverage (LRC) of the group) in the following
manner, depending on the reason for the
derecognition:
• If the contract is extinguished, in the same
amount as the adjustment to the FCF relating to
future service.
• If the contract is transferred to a third party,
in the amount of the FCF adjustment less the
premium charged by the third party.
• If the original contract is modified resulting
in its derecognition, in the amount of the FCF
adjustment adjusted for the premium the
Group would have charged had it entered into
a contract with equivalent terms as the new
contract at the date of the contract modification,
less any additional premium charged for the
modification. When recognising the new
contract in this case, the Group assumes such a
hypothetical premium as actually received.
• Adjusts the number of coverage units for the
expected remaining coverage to reflect the number
of coverage units removed.
5.1.4 Measurement - general model
5.1.4.1 Fulfilment cash flows
Fulfilment cash flows within contract boundary
The FCF are the current estimates of the future cash
flows within the contract boundary of a group of
Notes to the Financial Statements
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ClearView Annual Report 2024
contracts that the Group expects to collect from
premiums and pay out for claims, benefits and
expenses, adjusted to reflect the timing and the
uncertainty of those amounts.
The estimates of future cash flows:
• are based on a probability weighted mean of the
full range of possible outcomes;
• are determined from the perspective of the
Group, discounted using discount rates which
are consistent with observable market prices for
market variables; and
• reflect conditions existing at the measurement
date.
An explicit risk adjustment for non-financial risk is
estimated separately from the other estimates.
The estimates of future cash flows are adjusted
using the current discount rates to reflect the time
value of money and the financial risks related to
those cash flows, to the extent not included in the
estimates of cash flows. The discount rates reflect
the characteristics of the cash flows arising from
the groups of insurance contracts, including timing,
currency and liquidity of cash flows. The determination
of the discount rate that reflects the characteristics
of the cash flows and liquidity characteristics of the
insurance contracts requires significant judgement and
estimation.
Risk of the Group’s non-performance is not included
in the measurement of groups of insurance contracts
issued. In the measurement of reinsurance contracts
held, the probability weighted estimates of the present
value of future cash flows include the potential credit
losses and other disputes of the reinsurer to reflect the
non-performance risk of the reinsurer.
The Group estimates certain FCF at the portfolio level
or higher and then allocates such estimates to groups
of contracts.
The Group uses consistent assumptions to measure
the estimates of the present value of future cash
flows for the group of reinsurance contracts held and
such estimates for the groups of underlying insurance
contracts.
Contract boundary
The Group uses the concept of contract boundary to
determine what cash flows should be considered in
the measurement of groups of insurance contracts.
Cash flows are within the boundary of an insurance
contract if they arise from the rights and obligations
that exist during the period in which the policyholder
is obligated to pay premiums or the Group has a
substantive obligation to provide the policyholder with
insurance coverage or other services. A substantive
obligation ends when:
• the Group has the practical ability to reprice the
risks of the particular policyholder or change the
level of benefits so that the price fully reflects those
risks; or
• both of the following criteria are satisfied:
•
the Group has the practical ability to reprice the
contract or a portfolio of contracts so that the
price fully reflects the reassessed risk of that
portfolio; and
•
the pricing of premiums related to coverage to
the date when risks are reassessed does not
reflect the risks related to periods beyond the
reassessment date.
In assessing the practical ability to reprice, risks
transferred from the policyholder to the Group, such
as insurance risk and financial risk, are considered;
other risks, such as lapse or surrender and expense
risk, are not included.
Riders, representing add-on provisions to a basic
insurance policy that provide additional benefits to
the policyholder at additional cost, that are issued
together with the main insurance contracts form part
of a single insurance contract with all the cash flows
within its boundary.
Cash flows outside the insurance contracts boundary
relate to future insurance contracts and are recognised
when those contracts meet the recognition criteria.
The Group’s underlying (gross) yearly renewal
term (YRT) stepped premium business contract
boundary is determined to be short-term or 12-month
contract boundary. This applies to both the lump
sum and disability income business and results in
the recognition of 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. The Group’s other
business (non-stepped premium) contract boundary is
long-term.
For groups of reinsurance contracts held, cash flows
are within the contract boundary if they arise from
substantive rights and obligations of the Group that
exist during the reporting period in which the Group is
compelled to pay amounts to the reinsurer or in which
the Group has a substantive right to receive services
from the reinsurer.
The Group’s reinsurance agreements held have
an unlimited duration but are cancellable for new
underlying business with 90 day notice period
by either party. Therefore, the Group treats such
reinsurance contracts as a series of quarterly contracts
that cover underlying business issued within a
Notes to the Financial Statements
ClearView Wealth Limited
125
quarter. Estimates of future cash flows arising from all
underlying contracts issued and expected to be issued
within one-quarter’s boundary are included in each of
the reinsurance contracts’ measurement.
Cash flows that are not directly attributable to a
portfolio of insurance contracts, such as some product
development and training costs, are recognised in other
operating expenses as incurred.
Insurance acquisition cash flows
The Group includes the following acquisition cash flows
within the insurance contract boundary that arise from
selling, underwriting and starting a group of insurance
contracts and that are:
• costs directly attributable to individual contracts
and groups of contracts; and
• costs directly attributable to the portfolio of
insurance contracts to which the group belongs,
which are allocated on a reasonable and consistent
basis to measure the group of insurance contracts.
Where insurance acquisition cash flows have been
paid or incurred before the related group of insurance
contracts is recognised in the statement of financial
position, a separate asset for insurance acquisition
cash flows is recognised for each related group. The
asset for insurance acquisition cash flow (AIACF) is
derecognised from the statement of financial position
when the insurance acquisition cash flows are included
in the initial measurement of the CSM of the related
group of insurance contracts.
The Group systematically and rationally allocates
insurance acquisition cash flows to groups of insurance
contracts by using the present value of premiums as
the key driver of allocation.
The impairment and recoverability of the AIACF is
assessed at the end of each reporting period if there
are facts and circumstances indicating that the asset
may be impaired. The Group performs impairment
assessment for the asset for each future group of
contracts and across each new business origination
year. If the Group identifies an impairment loss, the
Group shall adjust the carrying amount of the asset
and recognise the impairment loss in profit or loss.
The Group shall recognise in profit or loss a reversal of
some or all of an impairment loss previously recognised
and increase the carrying amount of the asset, to the
extent that the impairment conditions no longer exist
or have improved.
Risk adjustment for non-financial risk
The risk adjustment for non-financial risk is applied to
the present value of the estimated future cash flows
and reflects the compensation the Group requires for
bearing the uncertainty about the amount and timing
of the cash flows from non-financial risk as the Group
fulfils insurance contracts.
For reinsurance contracts held, the risk adjustment for
non‑financial risk represents the amount of risk being
transferred by the Group to the reinsurer.
5.1.4.2 Initial measurement
Contractual service margin
The CSM is a component of the carrying amount of
the asset or liability for a group of insurance contracts
issued representing the unearned profit that the Group
will recognise as it provides coverage in the future.
At initial recognition, the CSM is an amount that results
in no income or expenses (unless a group of contracts
is onerous) arising from:
• the initial recognition of the FCF;
• the derecognition at the date of initial recognition
of any asset or liability recognised for insurance
acquisition cash flows; and
• cash flows arising from the contracts in the group at
that date.
A negative CSM at the date of inception means the
group of insurance contracts issued is onerous. A loss
from onerous insurance contracts is recognised in profit
or loss immediately with no CSM recognised on the
balance sheet on initial recognition.
For groups of reinsurance contracts held, any net gain
or loss at initial recognition is recognised as the CSM
unless the net cost of purchasing reinsurance relates
to past events, in which case the Group recognises the
net cost immediately in profit or loss. For reinsurance
contracts held, the CSM represents a deferred gain
or loss that the Group will recognise as a reinsurance
expense as it receives insurance contract services from
the reinsurer in the future and is calculated as the sum
of:
• the initial recognition of the FCF; and
• cash flows arising from the contracts in the group at
that date;
• the amount derecognised at the date of initial
recognition of any asset or liability previously
recognised for cash flows related to the group of
reinsurance contracts held; and
• any income recognised in profit or loss when the
Group recognises a loss on initial recognition of an
onerous group of underlying insurance contracts
or on addition of onerous underlying insurance
contracts to that group.
Notes to the Financial Statements
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ClearView Annual Report 2024
A loss-recovery component is established or adjusted
within the remaining coverage for reinsurance
contracts held for the amount of income recognised.
This amount is calculated by multiplying the loss
recognised on underlying insurance contracts by
the percentage of claims on underlying insurance
contracts that the Group expects to recover from the
reinsurance contracts held that are entered into before
or at the same time as the loss is recognised on the
underlying insurance contracts.
5.1.4.3 Subsequent measurement
The carrying amount at the end of each reporting
period of a group of insurance contracts issued is the
sum of:
• the LRC, comprising:
•
the FCF related to future service allocated to
the group at that date; and
•
the CSM of the group at that date; and
• the liability for incurred claims (LIC), comprising
the FCF related to past service allocated to the
group at the reporting date.
The carrying amount at the end of each reporting
period of a group of reinsurance contracts held is the
sum of:
• the remaining coverage, comprising:
•
the FCF related to future service allocated to
the group at that date; and
•
the CSM of the group at that date; and
• the asset for incurred claims, comprising the FCF
related to past service allocated to the group at the
reporting date.
Changes in fulfilment cash flows
The FCF are updated by the Group for current
assumptions at the end of every reporting period,
using the current estimates of the amount, timing and
uncertainty of future cash flows and of discount rates.
The way in which the changes in estimates of the
FCF are treated depends on which estimate is being
updated:
• changes that relate to current or past service are
recognised in profit or loss; and
• changes that relate to future service are recognised
by adjusting the CSM or the loss component within
the LRC as per the policy below.
For insurance contracts under the GMM, the following
adjustments relate to future service and therefore
adjust the CSM:
• experience adjustments arising from premiums
received in the period that relate to future
service and related cash flows such as insurance
acquisition cash flows;
• changes in estimates of the present value of future
cash flows in the LRC; and
• changes in the risk adjustment for non-financial risk
that relate to future service.
The first two adjustments above are measured using
the locked-in discount rates as described in the
section Interest accretion on the CSM below.
For insurance contracts under the GMM, the following
adjustments do not relate to future service and
therefore do not adjust the CSM:
• changes in the FCF for the effect of the time
value of money and the effect of financial risk and
changes thereof;
• changes in the FCF relating to the LIC; and
• experience adjustments relating to insurance
service expenses (excluding insurance acquisition
cash flows).
Changes to the contractual service margin
For insurance contracts issued, at the end of each
reporting period, the carrying amount of the CSM
is adjusted by the Group to reflect the effect of the
following changes:
• The effect of any new contracts added to the
group;
• For contracts measured under the GMM, interest
accreted on the carrying amount of the CSM;
• Changes in the FCF relating to future service are
recognised by adjusting the CSM. Changes in the
FCF are recognised in the CSM to the extent the
CSM is available. When an increase in the FCF
exceeds the carrying amount of the CSM, the CSM
is reduced to zero, the excess is recognised in
insurance service expenses and a loss component
is recognised within the LRC. When the CSM is
zero, changes in the FCF adjust the loss component
within the LRC with correspondence to insurance
service expenses. The excess of any decrease in
the FCF over the loss component reduces the loss
component to zero and reinstates the CSM; and
• The amount recognised as insurance revenue for
services provided during the period determined
after all other adjustments above.
For a group of reinsurance contracts held, at the end
of each reporting period, the carrying amount of
the CSM is adjusted to reflect effect of the following
changes:
Notes to the Financial Statements
ClearView Wealth Limited
127
• The effect of any new contracts added to the group;
• Interest accreted on the carrying amount of the
CSM;
• Income recognised in profit or loss when the
entity recognises a loss on initial recognition of an
onerous group of underlying insurance contracts
or on addition of onerous underlying insurance
contracts to that group. A loss-recovery component
is established or adjusted within the remaining
coverage for reinsurance contracts held for the
amount of income recognised;
• Reversals of a loss-recovery component other than
changes in the FCF of reinsurance contracts held;
• Changes in the FCF, to the extent that the change
relates to future service, unless the change results
from a change in FCF allocated to a group of
underlying insurance contracts that does not adjust
the CSM for the group of underlying insurance
contracts; and
• The amount recognised in profit or loss for
insurance contract services received during the
period, determined after all other adjustments
above.
Refer to the Reinsurance contracts held – Loss recovery
component section below for loss-recovery component
accounting.
Interest accretion on the CSM
Under the GMM, interest is accreted on the CSM using
discount rates determined at initial recognition that
are applied to nominal cash flows that do not vary
based on the returns of underlying items (locked-in
discount rates). If more contracts are added to the
existing groups in the subsequent reporting periods,
the Group revises the locked-in discount curves by
calculating weighted-average discount curves over
the period that contracts in the group are issued. The
weighted-average discount curves are determined by
multiplying the new CSM added to the group and their
corresponding discount curves over the total CSM.
Adjusting the CSM for changes in the FCF relating to
future service
The CSM is adjusted for changes in the FCF measured
applying the discount rates as specified above in the
changes in fulfilment cash flows section.
Release of the CSM to profit or loss
The amount of the CSM recognised in profit or loss for
services in the period is determined by the allocation of
the CSM remaining at the end of the reporting period
over the current and remaining expected coverage
period of the group of insurance contracts based on
coverage units.
The coverage period is defined as a period during
which the Group provides insurance contract services.
For all contracts issued by the Group, the coverage
period is determined by insurance coverage.
The total number of coverage units in a group is the
quantity of coverage provided by the contracts in
the group over the expected coverage period. The
coverage units are determined at each reporting
period-end prospectively by considering:
• the quantity of benefits provided by contracts in the
group;
• the expected coverage duration of contracts in the
group; and
• the likelihood of insured events occurring, only to
the extent that they affect the expected duration of
contracts in the group.
The Group uses the amount that it expects the
policyholder to be able to validly claim in each period if
an insured event occurs as the basis for the quantity of
benefits.
The Group reflects the time value of money in the
allocation of the CSM to coverage units.
For reinsurance contracts held, the CSM is released to
profit or loss as services are received from the reinsurer
in the period.
Coverage units for the reinsurance contracts are based
on the insurance coverage provided by the reinsurer
and are determined by the ceded policies’ coverage
units taking into account new business projected within
the reinsurance contract boundary.
The coverage period for these contracts is determined
based on the coverage of all underlying contracts
whose cash flows are included in the reinsurance
contract boundary.
Onerous contracts - Loss component
When adjustments to the CSM exceed the amount of
the CSM, the group of contracts becomes onerous and
the Group recognises the excess in insurance service
expenses and records it as a loss component of the
LRC.
When a loss component exists, the Group allocates
the following between the loss component and the
remaining component of the LRC for the respective
group of contracts, based on the ratio of the loss
component to the FCF relating to the expected future
cash outflows:
• expected incurred claims and expenses for the
period;
• changes in the risk adjustment for non-financial risk
for the risk expired; and
• finance income (expenses) from insurance contracts
issued.
Notes to the Financial Statements
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ClearView Annual Report 2024
The amounts of loss component allocation in the first
two bullets above reduce the respective components
of insurance revenue and are reflected in insurance
service expenses.
Decreases in the FCF in subsequent periods reduce
the remaining loss component and reinstate the CSM
after the loss component is reduced to zero. Increases
in the FCF relating to future service in subsequent
periods increase the loss component.
Reinsurance contracts held - Loss-recovery
component
A loss-recovery component is established or adjusted
within the asset for remaining coverage for reinsurance
contracts held for the amount of income recognised
in profit or loss when the Group recognises a loss on
initial recognition of an onerous group of underlying
insurance contracts or on addition of onerous
underlying insurance contracts to that group.
Subsequently, the loss-recovery component is
adjusted to reflect changes in the loss component of
an onerous group of underlying insurance contracts
discussed in the Onerous contracts – Loss component
section above. The loss-recovery component is
further adjusted, if required, to ensure that it does
not exceed the portion of the carrying amount of the
loss component of the onerous group of underlying
insurance contracts that the Group expects to recover
from the group of reinsurance contracts held.
The loss-recovery component determines the amounts
that are presented as a reduction of incurred claims
recovery from reinsurance contracts held and are
consequently excluded from the reinsurance expenses
determination.
5.1.5 Amounts recognised in comprehensive
income
5.1.5.1 Insurance service result from insurance
contract issued
Insurance revenue
As the Group provides services under the group of
insurance contracts, it reduces the LRC and recognises
insurance revenue. The amount of insurance revenue
recognised in the reporting period depicts the transfer
of promised services at an amount that reflects the
portion of consideration the Group expects to be
entitled to in exchange for those services.
Insurance revenue comprises the following:
• Amounts relating to the changes in the LRC:
•
insurance claims and expenses incurred in the
period measured at the amounts expected at
the beginning of the period, excluding:
• amounts related to the loss component;
• amounts of transaction-based taxes
collected in a fiduciary capacity; and
• insurance acquisition expenses;
•
changes in the risk adjustment for non-
financial risk, excluding:
• changes included in insurance
finance income (expenses);
• changes that relate to future coverage
(which adjust the CSM); and
• amounts allocated to the loss component;
• amounts of the CSM recognised in profit or loss
for the services provided in the period; and
• experience adjustments arising from premiums
received in the period that relate to past and
current service and related cash flows such as
insurance acquisition cash flows and premium-
based taxes.
• Insurance acquisition cash flows recovery is
determined by allocating the portion of premiums
related to the recovery of those cash flows on the
basis of the passage of time over the expected
coverage of a group of contracts.
Insurance service expenses
Insurance service expenses include the following:
• incurred claims and benefits;
• other incurred directly attributable insurance
service expenses;
• amortisation of insurance acquisition cash flows;
• changes that relate to past service (that is, changes
in the FCF relating to the LIC); and
• changes that relate to future service (that is, losses/
reversals on onerous groups of contracts from
changes in the loss components).
Amortisation of insurance acquisition cash flows is
reflected in insurance service expenses in the same
amount as insurance acquisition cash flows recovery
reflected within insurance revenue as described above.
Other expenses not meeting the above categories
are included in other operating expenses in the
consolidated statement of profit or loss.
5.1.5.2 Insurance service result from reinsurance
contract held
Net income/(expense) from reinsurance contract held
The Group presents financial performance of groups
of reinsurance contracts held on a net basis in net
income (expenses) from reinsurance contracts held,
comprising the following amounts:
Notes to the Financial Statements
ClearView Wealth Limited
129
• reinsurance expenses;
• incurred claims recovery;
• other incurred directly attributable insurance service
expenses;
• effect of changes in risk of reinsurer non-
performance;
• changes that relate to future service (that is,
changes in the FCF that do not adjust the CSM for
the group of underlying insurance contracts); and
• changes relating to past service (that is, adjustments
to recoveries of incurred claims).
Reinsurance expenses are recognised similarly to
insurance revenue. The amount of reinsurance expenses
recognised in the reporting period depicts the transfer
of received services at an amount that reflects the
portion of ceding premiums the Group expects to pay
in exchange for those services.
Reinsurance expenses comprise the following amounts
relating to changes in the remaining coverage:
• insurance claims and other expenses recovery in the
period measured at the amounts expected to be
incurred at the beginning of the period;
• changes in the risk adjustment for non-financial risk,
excluding:
• changes included in finance income (expenses)
from reinsurance contracts held; and
• changes that relate to future coverage (which
adjust the CSM);
• amounts of the CSM recognised in profit or loss for
the services received in the period; and
• ceded premium experience adjustments relating to
past and current service.
Ceding commissions that are not contingent on claims
of the underlying contracts issued reduce ceding
premiums and are accounted for as part of reinsurance
expenses.
5.1.5.3 Insurance finance income or expenses
Insurance finance income or expenses comprise
the change in the carrying amount of the group of
insurance contracts arising from:
• the effect of the time value of money and changes
in the time value of money; and
• the effect of financial risk and changes in financial
risk.
For contracts measured under the GMM, the main
amounts within insurance finance income or expenses
are:
• interest accreted on the FCF, the CSM and the
AIACF; and
• the effect of changes in interest rates and other
financial assumptions.
The Group includes all insurance finance income or
expenses for the period in profit or loss.
5.1.5.4 Basis of expense apportionment
All expenses of the life insurance business incurred
by ClearView Life and charged to the statement of
profit and 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 writes this
category of business.
The basis is as follows:
• Expenses relating specifically to either the
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
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 count and business
volumes; and
• 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).
5.1.6 Transition approaches
The Group has adopted AASB 17 retrospectively,
applying alternative transition methods where the full
retrospective approach was impracticable. The full
retrospective approach was applied to the insurance
contracts in force at the transition date that were
originated less than three years prior to transition. The
modified retrospective approach was applied to the
insurance contracts that were originated more than
three years prior to transition. The fair value approach
was applied to a group of older legacy non-advice
based business regardless of the origination years of
the policies within the group.
Notes to the Financial Statements
130
ClearView Annual Report 2024
The transition approach was determined at a group of
insurance contracts level and affected the approach to
calculating the CSM on initial adoption of AASB 17:
• full retrospective approach - the CSM at inception
is based on initial assumptions when groups of
contracts were incepted and rolled forward to the
date of transition as if AASB 17 had always been
applied;
• modified retrospective approach - the CSM at
inception is calculated based on assumptions at
transition using some simplifications and taking
into account the actual pre-transition FCF; and
• fair value approach - the pre-transition FCF and
experience are not considered.
The Group has determined that it would be
impracticable to apply the full retrospective approach
where any of the following conditions existed:
• The effects of the full retrospective application
were not determinable;
• The full retrospective application required
assumptions that would have been made in an
earlier period;
• The full retrospective application required
significant estimates of amounts, and it was
impossible to distinguish objectively between
information about those estimates that provided
evidence of circumstances that (i) existed on
the date at which those amounts were to be
recognised, measured or disclosed; and (ii) would
have been available when the consolidated financial
statements for that prior period were authorised
for issue, and other information.
For AIACF, the transition approaches follow the
approaches applied to the underlying contracts, which
were the following:
• The fully retrospective approach was applied to
recent stepped premium business for LifeSolutions
and ClearChoice groups of underlying contracts;
• The modified retrospective approach was applied
to the older stepped premium LifeSolutions groups
of underlying contracts; and
• The fair value approach was applied to non-advice
and legacy groups.
For reinsurance contracts held, the transition
approaches were applied as following:
• The fully retrospective approach was applied to
the reinsurance contracts held backing recent
LifeSolutions and ClearChoice groups of underlying
contracts where required input data is available;
• The modified retrospective approach was applied
to the reinsurance contracts held backing older
LifeSolutions and ClearChoice groups of underlying
contracts where it is impractical to source required
input data; and
• The fair value approach was applied to the
reinsurance contracts held backing non-advice and
legacy groups of underlying contracts.
5.1.6.1 Fully retrospective approach
The Group has determined that reasonable and
supportable information was available for all contracts
in force at the transition date that were issued within
three years prior to the transition.
Accordingly, the Group has recognised and measured
each group of insurance contracts in this category
as if AASB 17 had always applied; derecognised any
existing balances that would not exist had AASB 17
always applied; and recognised any resulting net
difference in equity.
5.1.6.2 Modified retrospective approach
After making reasonable efforts to gather necessary
historical information, the Group has determined
that for certain groups of contracts, such information
was not available or not available in a form that
would enable it to be used without undue cost and
effort. It was therefore impracticable to apply the
full retrospective approach, and either the modified
retrospective approach or the fair value approach has
been used for these groups.
The Group has determined to apply the modified
retrospective approach to all groups of contracts
in force as at transition and originated more than
three years prior to the transition date, where the full
retrospective approach has not been applied as it
was impracticable. The exception is a group of older
legacy non-advice based business where the fair value
approach is applied for all cohorts.
The key simplifications used for the modified
retrospective approach include:
• Combining historical groups of contracts into one
group for all FY19 and earlier cohorts;
• Using transition date information to identify
groups of contracts, including onerous contract
assessment;
• Using combination of historical actual cash flows
and projected future cash flows to estimate a group
of contracts’ total future cash flows from initial
recognition;
• Determining the discount rates to be used at
initial recognition based on a weighted average of
observable yield curves; and
Notes to the Financial Statements
ClearView Wealth Limited
131
• Determining the risk adjustment for non-financial
risk at initial recognition by adjusting the risk
adjustment for non-financial risk.
5.1.6.3 Fair value approach
The Group applied the fair value approach to all
cohorts of the group of older legacy non-advice based
business.
Applying the fair value approach, the Group
determined the CSM to be the difference between the
fair value of a group of insurance contracts, measured
in accordance with AASB 13 Fair Value Measurement
(AASB 13), and its FCF at the transition date.
The fair value of an insurance liability is the price a
market participant would be willing to pay to assume
the obligation and the remaining risks of the in force
contracts as at the transition date.
In estimating the fair value of groups of insurance
contracts, the following considerations were applied:
• only future cash flows within the boundaries of
the insurance contracts were included in the fair
value estimation excluding future renewals and
new business that would be outside the contract
boundary of the contracts under AASB 17;
• assumptions about expected future cash flows
and risk allowances were adjusted for the market
participant’s view as required by AASB 13; and
• profit margins were included to reflect what a
market participant would require for accepting
obligations under insurance contracts, beyond the
risk adjustment for non-financial risk.
The fair value of the group of older legacy non-advice
based business has taken into account of the strategic
review work performed by an external party in FY22-23
and involved an independent valuation of the business
using an Embedded Value (EV) approach.
5.2
Significant judgements and
estimates in applying AASB 17
5.2.1 Future cash flows
The fulfilment cash flows of insurance contracts
represents the present value of estimated future
cash outflows, less the present value of estimated
future cash inflows and adjusted for a provision for
the risk adjustment for non-financial risk. The Group’s
process for estimating future cash flows incorporates,
in an unbiased way, all reasonable and supportable
information that is available without undue cost or
effort at the reporting date. This information includes
both internal and external historical data about claims
and other experience, updated to reflect current
expectations of future events. As this is a prediction
of the future, significant judgement is applied in
determining the assumptions that underpin the
estimation of future cash flows. These assumptions
include, but are not limited to operating assumptions
such as morbidity, mortality, lapses and expenses.
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 assumptions have been updated to
take into account 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.
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 at 30 June 2024 to reflect
ClearView’s recent observed experience.
Acquisition expenses: Per policy acquisition expense
assumptions were based on the actual acquisition
expenses incurred.
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 2025 business plan. The long-term expense
inflation rate was maintained at 2.4% per annum in
FY24 (FY23: 2.4%).
5.2.2 Discount rates
A bottom-up approach is applied to determine
the discount rates used to discount insurance and
reinsurance contract cash flows, which uses risk-free
rates adjusted to reflect the liquidity characteristics
of the contracts. The risk-free rate is based on
Commonwealth Government bond rates. The illiquidity
premium is derived based on the long-term weighted
average credit spread of a reference portfolio of assets
with a similar currency mix and weighted average
duration as the related insurance liabilities over the
longer term. The effect of credit risk and other factors
that are not relevant to the illiquidity characteristics
of insurance contracts is eliminated to estimate the
portion of the spread that reflects the illiquidity
premium.
Notes to the Financial Statements
132
ClearView Annual Report 2024
As at 30 June 2024, discount rates used to discount insurance and reinsurance cash flows 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.
FY24
FY23
Discount rates
4.30% p.a. to 5.35% p.a.
4.10% p.a. to 4.99% p.a.
5.2.3 Risk adjustment
The risk adjustment for non-financial risk is the compensation that is required for bearing the uncertainty about
the amount and timing of cash flows that arises from non-financial risk as the insurance contract is fulfilled.
Because the risk adjustment represents compensation for uncertainty, estimates are made on the degree of
diversification benefits and expected favourable and unfavourable outcomes in a way that reflects the Group’s
degree of risk aversion. The Group estimates an adjustment for non-financial risk separately from all other
estimates.
The cost of capital method was used to derive the overall risk adjustment for non-financial risk. In the cost of
capital method, the risk adjustment is determined by applying a cost rate to the present value of projected capital
relating to non-financial risk. The cost rate is set at 7.0% (30 June 2023: 7.0%) per annum representing the return
required to compensate for the exposure to non-financial risk. The capital is determined at a 99.5% (30 June
2023: 99.5%) confidence level and is projected in line with the run-off of the business.
The resulting amount of the calculated risk adjustment corresponds to the average confidence level of 89%
(30 June 2023: 89%). The confidence level varies across the different products, and LRC and LIC.
Determination of risk adjustment for groups of reinsurance contracts held is based on the risk adjustment of
groups of underlying contracts and the reinsurance percentage applied for each group.
5.2.4 Coverage units
The CSM of a group of contracts is recognised as insurance revenue in each period based on the number of
coverage units provided in the period, which is determined by considering for each contract the quantity of the
services provided, its expected coverage period and time value of money.
For lump sum business, coverage units are the discounted value of the sum insured in-force on the contract,
allowing for expected decrements (lapse and mortality/morbidity) and indexation. For disability income business,
coverage units are the discounted benefit amount including expected decrements such as lapses, mortality and
indexation but excluding terminations.
Expected coverage period is derived based on the likelihood of an insured event occurring to the extent they
affect the expected duration of contracts in the group. Determining the expected coverage period is judgemental
since it involves making an expectation of when claims and lapse will occur.
Determination of coverage units for groups of reinsurance contracts held follow the same principles as for groups
of underlying contracts.
5.2.5 Transition to AASB 17
The Group applied AASB 17 for annual reporting period beginning on 1 July 2023. The Group has determined
that it was impracticable to apply the full retrospective approach for some groups of contracts because certain
historical information was not available or was not available without undue cost or effort that would enable it to
be used under this approach. Therefore, the Group applied the modified retrospective or fair value approaches
for these groups of contracts. The Group exercises judgements in determining the transition approaches, applying
the transition methods and measuring the transition impacts on the transition date, which will affect the amounts
recognised in the consolidated financial statements on the transition date.
Refer to section 5.1.6 Transition approaches for detail.
Notes to the Financial Statements
ClearView Wealth Limited
133
Deferred tax assets
As a result of the transition to AASB 17, the Group’s accounting net life insurance contract liability, for which
the carrying amount will be settled in future periods has increased. This results in an increase in the deductible
temporary differences and a related deferred tax asset of $35.9 million on transition and a further $3.5 million in
FY23 bringing the total related deferred tax asset to $39.4 million as at 30 June 2023, given the movement in the
net life insurance contract liability is deductible when settled in the future.
While the Australian Taxation Office (ATO) and Treasury has yet to provide any announcement or guidance in
respect of the AASB 17 impacts on life insurance companies, there is no indication that AASB 17 will result in a
change to the income tax laws.
As these temporary differences create income tax losses on transition, given that it is probably that the Group’s
future taxable profit will be available against which the tax losses can be utilised, the additional deferred tax asset
of $39.4 million has been recognised on balance sheet as at 30 June 2023.
5.2.6 Sensitivity analysis
The valuation of liabilities for incurred claims and the liability for remaining coverage are calculated using certain
assumptions of the key underlying variables such as discount rates, expenses, mortality, morbidity and lapses. The
movement in any key variable may impact the reported performance and net assets of ClearView Life and the
consolidated entity.
Variable
Impact of movement in underlying variable
Interest rate
The fulfilment cash flows within the liability for remaining coverage and the liability for
incurred claims are calculated using a discount rate that is derived from market interest rates.
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. The CSM within the liability for
remaining coverage is discounted using locked-in rates observed at the initial recognition of
the insurance contract and, as such, changes in market interest rates will not impact the CSM.
Expense
An increase in the level (or inflation) of expenses over the assumed levels will decrease
emerging profit. A change in the base expense assumptions adopted for the fulfilment cash
flows within the liability for remaining coverage may impact the insurance contract liability/
asset if it currently has a loss component, otherwise such a change will be absorbed into the
contractual service margins of the insurance contract.
Mortality
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. A change in the mortality assumptions adopted for the fulfilment cash flows within the
liability for remaining coverage may impact the insurance contract liability/asset if it currently
has a loss component, otherwise such a change will be absorbed into the contractual service
margins of the insurance contract.
Morbidity
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
adopted for the fulfilment cash flows within the liability for remaining coverage may impact
the insurance contract liability/asset if it currently has a loss component, otherwise such a
change will be absorbed into the contractual service margins of the insurance contract. For
policyholders who are currently on claim the related reserves are included as part of the
liability for incurred claims where there are no profit margins. Therefore, any change in claims
costs due to a change in expectation around claims duration is reflected through a change in
the liability for incurred claims and hence profit.
Lapses
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 contract liability of a change in lapse assumptions is as per mortality above.
Notes to the Financial Statements
134
ClearView Annual Report 2024
The table below illustrates how outcomes during the financial year in respect of the key actuarial variables, would
have impacted the equity before tax for that financial year.
Gross insurance impact
Reinsurance impact
Net
impact
Variable
Change
Impact on
loss
component
Impact
on
CSM
release
Impact
on
AIACF
Impact on
insurance
finance
income or
expense
(IFIE)
Impact
on equity
gross of
reinsurance
Impact
on CSM
(post
release)
Impact on
reinsurance
loss
recovery
component
(RLRC)
Impact on
reinsurance
CSM
release
Impact
on IFIE
Impact
on
equity
Impact on
reinsurance
CSM (post
release)
Impact on
equity
net of
reinsurance
$'000
$'000
$'000
$'000
$'000
$'000
$'000
$'000
$'000
$'000
$'000
$'000
FY24
Interest
rates
+ 100
bp
—
—
(3,751)
23,609
19,858
—
—
—
(16,465)
(16,465)
—
3,393
- 100
bp
—
—
3,786
(30,231)
(26,445)
—
—
—
20,837
20,837
—
(5,608)
Mortality
and
morbidity
+10%
(71,613)
(2,479)
(21,325)
5,274
(90,142)
(5,095)
55,236
12,603
(10,261)
57,577
85,739
(32,565)
-10%
54,349
4,510
19,352
(5,274)
72,936
20,328
(39,163)
(14,715)
10,261
(43,617)
(99,700)
29,319
Lapses
+10%
18,248
13
(10,018)
(2,229)
6,014
273
(15,496)
1,913
760
(12,823)
10,689
(6,808)
-10%
(21,565)
(24)
8,977
2,669
(9,942)
(436)
20,906
(2,907)
(363)
17,637
(18,344)
7,695
Expenses
+10%
(6,506)
(271)
(2,274)
425
(8,626)
(663)
—
—
—
—
—
(8,626)
-10%
6,506
271
2,252
(425)
8,604
663
—
—
—
—
—
8,604
Gross
insurance
premium
rate
+10%
45,946
4,028
22,872
(3,454)
69,392
18,252
(28,643)
3,983
—
(24,660)
24,660
44,732
Reinsurance
premium
rate
+10%
—
—
—
—
—
—
—
(18,122)
8,176
(9,946)
(120,638)
(9,946)
FY23
Interest
rates
+ 100
bp
—
—
(2,519)
23,046
20,527
—
—
—
(13,446)
(13,446)
—
7,082
- 100
bp
—
—
2,543
(28,576)
(26,034)
—
—
—
16,631
16,631
—
(9,402)
Mortality
and
morbidity
+10%
(67,953)
(2,425)
(18,269)
3,092
(85,555)
(6,700)
52,406
11,357
(7,605)
56,157
77,725
(29,397)
-10%
40,261
5,820
16,975
(3,160)
59,896
30,997
(30,262)
(14,127)
7,557
(36,832)
(97,098)
23,065
Lapses
+10%
7,685
776
(7,842)
(2,029)
(1,410)
7,403
(5,794)
1,016
1,098
(3,681)
6,889
(5,091)
-10%
(16,279)
(144)
8,314
2,593
(5,516)
(1,721)
12,670
(2,480)
(256)
9,935
(17,072)
4,419
Expenses
+10%
(5,077)
(268)
(2,271)
111
(7,505)
(2,085)
—
—
—
—
—
(7,505)
-10%
4,566
498
2,249
(221)
7,092
2,366
—
—
—
—
—
7,092
This information in the sensitivity table is based on linear changes to assumptions which impact all affected
product groups equally. The impact of any future assumption change will be dependent on a range of factors
including the nature of the assumption change, product impacted, the profitability of the impacted product, and
the measurement model utilised. Assumption changes impact the insurance contracts liabilities in different ways:
1. For profitable groups of contracts, assumption changes related to future service will impact the CSM, with a
second order impact on current year profits.
2. For onerous groups of contracts, assumption changes will result in change to the insurance contract liabilities,
with a direct impact on current year profits.
3. For stepped premium contracts, assumption changes related to future renewal contracts will impact the
assessment of the recoverability of the AIACF, with an impact on current year profits.
4. For assumptions changes which impact reinsurance contracts, there will also be offsetting impacts on either
the reinsurance contract liabilities or the reinsurance CSM, or both.
ClearView has both onerous and profitable groups of contracts, so assumption changes impact both CSM and
current year profits. Furthermore, for onerous contracts, a change in the gross loss component will be offset by a
change in the reinsurance loss recovery component in the current period.
Notes to the Financial Statements
ClearView Wealth Limited
135
ClearView has both stepped premium gross contracts (short-term contract boundary representing circa 79% of
the in-force portfolio) and level premium gross contracts (long-term contract boundary representing circa 21% of
the in-force portfolio). For gross onerous contracts, to the extent that assumption changes relate to a long-term
contract boundary, the present value impact is capitalised and has a larger impact than those that are treated as a
short-term contract boundary.
5.3
Insurance revenue and expenses
5.3.1 Insurance revenue and insurance service result
FY24
2024
2023
$’000
$’000
Insurance revenue
Amounts relating to the changes in the LRC
• CSM recognised in profit or loss for the services provided
52,468
42,753
• Change in the risk adjustment for non-financial risk expired
12,494
11,366
• Expected incurred claims and other expenses after loss component allocation
239,153
205,176
Premium variance for current or past services
(9,006)
(6,412)
Insurance acquisition cash flows recovery
38,802
37,932
Total insurance revenue
333,911
290,815
Insurance service expenses
Incurred claims and other directly attributable expenses
(246,659)
(199,314)
Changes that relate to past service - adjustments to the LIC
(18,458)
(11,973)
Losses on onerous contracts and reversal of those losses
(44,884)
(26,437)
Insurance acquisition cash flows amortisation
(38,802)
(37,932)
Impairment of assets for insurance acquisition cash flows and reversal of
impairment
(23,377)
(14,345)
Total insurance service expenses
(372,180)
(290,001)
Net income/(expenses) from reinsurance contracts held
Amounts relating to the changes in the remaining coverage
• CSM recognised in profit or loss for the services received
9,615
2,092
• Changes in the risk adjustment recognised for non-financial risk expired
(9,644)
(9,686)
• Expected claims and other expenses recovery
(110,331)
(90,519)
Premium variance for current and past services
(6,661)
(4,084)
Reinsurance expenses
(117,021)
(102,197)
Claims recovered and other incurred directly attributable expenses
96,497
85,465
Recoveries and reversals of recoveries of losses on onerous underlying insurance
contracts
27,404
19,820
Changes that relate to past service - adjustments to assets for incurred claims
31,533
4,932
Total net expenses from reinsurance contracts held
38,413
8,020
Total insurance service result
144
8,834
Notes to the Financial Statements
136
ClearView Annual Report 2024
5.3.2 Detail of insurance service and other expenses
FY24
2024
2023
$’000
$’000
Claims
176,359
127,162
Losses on onerous contracts and reversal of those losses
44,884
26,438
Commission expenses
63,116
53,895
Administration expenses
33,399
30,661
Employee expenses
52,063
49,791
Share based payments
195
(166)
Directors’ fees
704
960
Employee termination payments
387
150
Depreciation and amortisation expenses
7,134
5,384
Other expenses
—
28
Finance costs
10,172
8,243
388,413
302,546
Amounts attributed to insurance acquisition cash flows
(54,284)
(44,782)
Amortisation of insurance acquisition cash flows
38,802
37,932
Impairment of assets for insurance acquisition cash flows and reversal of
impairment
23,377
14,345
Insurance service and other expenses
396,308
310,041
Insurance service and other expenses represented by:
FY24
2024
2023
$’000
$’000
Insurance service expenses
372,180
290,001
Other operating expenses
13,956
11,797
Other finance costs
10,172
8,243
Total
396,308
310,041
5.3.3 Expected recognition of the contractual service margin
The following tables set out when the CSM is expected to be released into profit or loss in future periods.
FY24 30 June 2024 30 June 2023
$’000
$’000
Insurance contracts issued
Less than 1 year
(26,796)
(23,220)
1-2 years
(593)
(540)
2-3 years
(554)
(495)
3-4 years
(511)
(467)
4-5 years
(486)
(432)
More than 5 years
(7,407)
(6,502)
Total
(36,347)
(31,656)
Notes to the Financial Statements
ClearView Wealth Limited
137
FY24 30 June 2024 30 June 2023
$’000
$’000
Reinsurance contracts held
Less than 1 year
(7,013)
(1,857)
1-2 years
(6,244)
(1,619)
2-3 years
(5,573)
(1,426)
3-4 years
(4,982)
(1,268)
4-5 years
(4,456)
(1,125)
More than 5 years
(31,843)
(7,684)
Total
(60,111)
(14,979)
5.3.4 Contractual service margin by transition method
The following tables provides an analysis of contractual service margin by transition method applied to measure
the contracts on adoption of AASB 17.
Other
contracts
Modified
retrospective
approach
Fair value
approach
Total
Insurance contracts issued
$’000
$’000
$’000
$’000
CSM at 1 July 2023
(30,305)
(1,351)
—
(31,656)
Changes that relate to current service
Contractual service margin release for services
provided
52,468
—
—
52,468
Changes that relate to future service
Contracts initially recognised in the period
(56,199)
—
—
(56,199)
Changes in estimates that adjust the contractual
service margin
1,174
1,399
—
2,573
Insurance finance expense
(3,485)
(48)
—
(3,533)
CSM at 30 June 2024
(36,347)
—
—
(36,347)
CSM at 1 July 2022
(21,855)
(35,898)
(5,016)
(62,769)
Changes that relate to current service
Contractual service margin release for services
provided
37,396
233
5,124
42,753
Changes that relate to future service
Contracts initially recognised in the period
(48,522)
—
—
(48,522)
Changes in estimates that adjust the contractual
service margin
3,812
35,541
—
39,353
Insurance finance expense
(1,136)
(1,227)
(108)
(2,471)
CSM at 30 June 2023
(30,305)
(1,351)
—
(31,656)
Notes to the Financial Statements
138
ClearView Annual Report 2024
FY24
Other
contracts
Modified
retrospective
approach
Fair value
approach
Total
Reinsurance contracts held
$’000
$’000
$’000
$’000
CSM at 1 July 2023
(7,637)
(8,810)
1,468
(14,979)
Changes that relate to current service
Contractual service margin release for services
provided
5,003
5,579
(967)
9,615
Changes that relate to future service
Contracts initially recognised in the period
2,365
—
—
2,365
Changes in estimates that adjust the contractual
service margin
(31,350)
(30,113)
4,550
(56,913)
Reinsurance finance income
(18)
(230)
49
(199)
CSM at 30 June 2024
(31,637)
(33,574)
5,100
(60,111)
CSM at 1 July 2022
(2,232)
17,071
1,954
16,793
Changes that relate to current service
Contractual service margin release for services
provided
735
1,635
(278)
2,092
Changes that relate to future service
Contracts initially recognised in the period
(6,126)
—
—
(6,126)
Changes in estimates that adjust the contractual
service margin
95
(28,157)
(250)
(28,312)
Reinsurance finance income
(109)
641
42
574
CSM at 30 June 2023
(7,637)
(8,810)
1,468
(14,979)
5.3.5 Expected derecognition of the assets for insurance acquisition cash flows
The following table set out when the Group expects to derecognise assets for insurance acquisition cash flows
after the reporting date.
FY24 30 June 2024 30 June 2023
$’000
$’000
Less than 1 year
28,120
28,854
1-2 years
27,626
26,285
2-3 years
25,215
23,843
3-4 years
22,869
21,618
4-5 years
20,722
19,518
More than 5 years
156,239
151,547
Total
280,791
271,665
Notes to the Financial Statements
ClearView Wealth Limited
139
5.4 Net investment result
FY24
2024
2023
$’000
$’000
Interest income
• Cash and cash equivalents
4,429
2,432
• Investment securities at FVTPL
16,457
10,704
• Loans and advances
127
141
Distribution income
63
36
Total investment income
21,076
13,313
Net fair value gains on financial assets
3,664
4,189
Change in life investment contract liabilities
68
(242)
Net investment income
24,808
17,260
Insurance finance income/(expense) from insurance contracts issued
Interest accreted
4,177
3,262
Effect of changes in interest rates and other financial assumptions
18,992
15,273
23,169
18,535
Insurance finance income/(expense) from reinsurance contracts held
Interest accreted
3,321
(62)
Effect of changes in interest rates and other financial assumptions
(21,653)
(8,632)
(18,332)
(8,694)
Total insurance finance income/(expense)
4,837
9,841
Net investment result
29,645
27,101
Notes to the Financial Statements
140
ClearView Annual Report 2024
5.5 Insurance contracts issued
5.5.1 Reconciliation of the liability for remaining coverage and the liability for incurred claims
LRC
LIC
AIACF
Total
Excluding
loss
component
Loss
component
2024
$'000
$'000
$'000
$'000
$'000
Net opening balance
Opening insurance contract liabilities
(6,335)
(111,055)
(307,433)
94,591
(330,232)
Opening insurance contract assets
(20,686)
(841)
(70,208)
177,074
85,339
Total net opening balance
(27,021)
(111,896)
(377,641)
271,665
(244,893)
Insurance revenue
Contracts under modified retrospective approach
51,391
—
—
—
51,391
Other contracts
282,520
—
—
—
282,520
Total insurance revenue
333,911
—
—
—
333,911
Insurance service expenses
Incurred claims and other directly attributable
expenses
—
13,302
(259,961)
—
(246,659)
Insurance acquisition cash flows amortisation
(38,802)
—
—
—
(38,802)
Losses on onerous contracts and reversal of those
losses1
—
(44,884)
—
—
(44,884)
Changes that relate to past service - adjustments to
the LIC
—
—
(18,458)
—
(18,458)
Impairment of assets for insurance acquisition cash
flows and reversal of impairment
—
—
—
(23,377)
(23,377)
Total insurance service expenses
(38,802)
(31,582)
(278,419)
(23,377)
(372,180)
Insurance service result
295,109
(31,582)
(278,419)
(23,377)
(38,269)
Insurance finance expenses
Net finance income/(expenses)
16,221
(6,644)
1,513
12,079
23,169
Total insurance finance income/(expenses)
16,221
(6,644)
1,513
12,079
23,169
Total amounts recognised in comprehensive income
311,330
(38,226) (276,906)
(11,298)
(15,100)
Cash flows
Premiums received
(354,780)
—
—
—
(354,780)
Claims and other directly attributable expenses paid
—
—
219,358
—
219,358
Insurance acquisition cash flows
1,686
—
—
52,598
54,284
Total cash flows
(353,094)
—
219,358
52,598
(81,138)
Allocation from assets for insurance acquisition cash
flows to groups of insurance contracts
32,174
—
—
(32,174)
—
Other movements2
—
—
3,762
—
3,762
Net closing balance
Closing insurance contract liabilities
(9,732)
(148,856)
(338,275)
36,882
(459,981)
Closing insurance contract assets
(26,879)
(1,266)
(93,152)
243,909
122,612
Total net closing balance
(36,611)
(150,122)
(431,427)
280,791
(337,369)
Notes to the Financial Statements
ClearView Wealth Limited
141
LRC
LIC
AIACF
Total
Excluding
loss
component
Loss
component
2023
$'000
$'000
$'000
$'000
$'000
Net opening balance
Opening insurance contract liabilities
13,759
(100,038)
(279,148)
45,515
(319,912)
Opening insurance contract assets
(11,949)
(7,794)
(79,448)
223,865
124,674
Total net opening balance
1,810
(107,832)
(358,596)
269,380
(195,238)
Insurance revenue
Contracts under modified retrospective approach
49,157
—
—
—
49,157
Contracts under fair value approach
17,921
—
—
—
17,921
Other contracts
223,737
—
—
—
223,737
Total insurance revenue
290,815
—
—
—
290,815
Insurance service expenses
Incurred claims and other directly attributable
expenses
—
27,182
(226,496)
—
(199,314)
Insurance acquisition cash flows amortisation
(37,932)
—
—
—
(37,932)
Losses on onerous contracts and reversal of those
losses
—
(26,437)
—
—
(26,437)
Changes that relate to past service - adjustments to
the LIC
—
—
(11,973)
—
(11,973)
Impairment of assets for insurance acquisition cash
flows and reversal of impairment
—
—
—
(14,345)
(14,345)
Total insurance service expenses
(37,932)
745
(238,469)
(14,345)
(290,001)
Insurance service result
252,883
745
(238,469)
(14,345)
814
Insurance finance expenses
Net finance income/(expenses)
8,742
(4,808)
8,409
6,192
18,535
Total insurance finance income/(expenses)
8,742
(4,808)
8,409
6,192
18,535
Total amounts recognised in comprehensive income
261,625
(4,063)
(230,060)
(8,153)
19,349
Cash flows
Premiums received
(324,801)
—
—
—
(324,801)
Claims and other directly attributable expenses paid
—
—
207,946
—
207,946
Insurance acquisition cash flows
3,179
—
—
41,603
44,782
Total cash flows
(321,622)
—
207,946
41,603
(72,073)
Allocation from assets for insurance acquisition cash
flows to groups of insurance contracts
31,165
—
—
(31,165)
—
Other movements2
—
—
3,069
—
3,069
Net closing balance
Closing insurance contract liabilities
(6,336)
(111,054)
(307,433)
94,591
(330,232)
Closing insurance contract assets
(20,686)
(841)
(70,208)
177,074
85,339
Total net closing balance
(27,022)
(111,895)
(377,641)
271,665
(244,893)
1
The losses on onerous contracts in FY24 mainly resulted from actuarial assumptions changes made at 30 June 2024.
2
Other movements relate to non-cash items such as amortisation of intangible assets.
Notes to the Financial Statements
142
ClearView Annual Report 2024
5.5.2 Reconciliation of the measurement components of insurance contract balances
Present
value of
future
cash flows
Risk
adjustment
CSM
AIACF
Total
2024
$'000
$'000
$'000
$'000
$'000
Net opening balance
Opening insurance contract liabilities
(338,326)
(74,658)
(11,839)
94,591
(330,232)
Opening insurance contract assets
(66,331)
(5,587)
(19,817)
177,074
85,339
Total net opening balance
(404,657)
(80,245)
(31,656)
271,665
(244,893)
Changes related to current services
CSM recognised for services provided
—
—
52,468
—
52,468
Change in risk adjustment for non-financial risks
expired
—
13,275
—
—
13,275
Experience adjustments
(17,293)
—
—
—
(17,293)
Changes related to future services
Contracts recognised in the period
61,666
(10,913)
(56,199)
—
(5,446)
Changes in estimates that adjust the CSM
(4,139)
1,566
2,573
—
—
Changes in estimates that result in onerous contract
losses or reversal of losses
(54,359)
14,921
—
—
(39,438)
Changes related to past services
Adjustment to liabilities for incurred claims
(15,252)
(3,206)
—
—
(18,458)
Impairment of assets for insurance acquisition cash
flows and reversal of impairment
—
—
—
(23,377)
(23,377)
Net finance expenses
Net finance expenses
17,078
(2,455)
(3,533)
12,079
23,169
Total amounts recognised in comprehensive income
(12,299)
13,188
(4,691)
(11,298)
(15,100)
Cash flows
Premiums received
(354,780)
—
—
—
(354,780)
Claims and other directly attributable expenses paid
219,358
—
—
—
219,358
Insurance acquisition cash flows
1,686
—
—
52,598
54,284
Total cash flows
(133,736)
—
—
52,598
(81,138)
Allocation from assets for insurance acquisition cash
flows to groups of insurance contracts
32,174
—
—
(32,174)
—
Other movements2
3,762
—
—
—
3,762
Net closing balance
Closing insurance contract liabilities
(425,660)
(61,069)
(10,134)
36,882
(459,981)
Closing insurance contract assets
(89,096)
(5,988)
(26,213)
243,909
122,612
Total net closing balance
(514,756)
(67,057)
(36,347)
280,791
(337,369)
Notes to the Financial Statements
ClearView Wealth Limited
143
Present
value of
future
cash flows
Risk
adjustment
CSM
AIACF
Total
2023
$'000
$'000
$'000
$'000
$'000
Net opening balance
Opening insurance contract liabilities
(251,449)
(67,678)
(46,300)
45,515
(319,912)
Opening insurance contract assets
(77,322)
(5,400)
(16,469)
223,865
124,674
Total net opening balance
(328,771)
(73,078)
(62,769)
269,380
(195,238)
Changes related to current services
CSM recognised for services provided
—
—
42,753
—
42,753
Change in risk adjustment for non-financial risks
expired
—
13,193
—
—
13,193
Experience adjustments
(2,377)
—
—
—
(2,377)
Changes related to future services
Contracts recognised in the period
53,542
(10,950)
(48,522)
—
(5,930)
Changes in estimates that adjust the CSM
(34,168)
(5,185)
39,353
—
—
Changes in estimates that result in onerous contract
losses or reversal of losses
(16,375)
(4,132)
—
—
(20,507)
Changes related to past services
Adjustment to liabilities for incurred claims
(10,788)
(1,185)
—
—
(11,973)
Impairment of assets for insurance acquisition cash
flows and reversal of impairment
—
—
—
(14,345)
(14,345)
Net finance expenses
Net finance expenses
13,722
1,092
(2,471)
6,192
18,535
Total amounts recognised in comprehensive income
3,556
(7,167)
31,113
(8,153)
19,349
Cash flows
Premiums received
(324,801)
—
—
—
(324,801)
Claims and other directly attributable expenses paid
207,946
—
—
—
207,946
Insurance acquisition cash flows
3,179
—
—
41,603
44,782
Total cash flows
(113,676)
—
—
41,603
(72,073)
Allocation from assets for insurance acquisition cash
flows to groups of insurance contracts
31,165
—
—
(31,165)
—
Other movements1
3,069
—
—
—
3,069
Net closing balance
Closing insurance contract liabilities
(338,326)
(74,658)
(11,839)
94,591
(330,232)
Closing insurance contract assets
(66,331)
(5,587)
(19,817)
177,074
85,339
Total net closing balance
(404,657)
(80,245)
(31,656)
271,665
(244,893)
1
Other movements relate to non-cash items such as amortisation of intangible assets.
Notes to the Financial Statements
144
ClearView Annual Report 2024
5.5.3 Impact of contracts recognised in the period
Non-onerous
contracts
originated
Onerous
contracts
originated
Total
2024
$’000
$’000
$’000
Insurance contracts issued
Claims and other directly attributable expenses
126,777
71,136
197,913
Insurance acquisition cash flows
31,767
2,093
33,860
Estimates of present value of future cash outflows
158,544
73,229
231,773
Estimates of present value of future cash inflows
(221,371)
(72,068)
(293,439)
Risk adjustment for non-financial risk
6,628
4,285
10,913
CSM
56,199
—
56,199
Increase in insurance contract liabilities from contracts recognised
in the period
—
5,446
5,446
Non-onerous
contracts
originated
Onerous
contracts
originated
Total
2023
$’000
$’000
$’000
Insurance contracts issued
Claims and other directly attributable expenses
118,688
68,835
187,523
Insurance acquisition cash flows
31,917
2,427
34,344
Estimates of present value of future cash outflows
150,605
71,262
221,867
Estimates of present value of future cash inflows
(205,559)
(69,850)
(275,409)
Risk adjustment for non-financial risk
6,432
4,518
10,950
CSM
48,522
—
48,522
Increase in insurance contract liabilities from contracts recognised
in the period
—
5,930
5,930
Notes to the Financial Statements
ClearView Wealth Limited
145
5.6 Reinsurance contracts held
5.6.1 Reconciliation of the remaining coverage and incurred claims
Asset for remaining coverage
Asset for
incurred
claims1
Total
Excluding
loss-recovery
component
Loss-recovery
component
2024
$'000
$'000
$'000
$'000
Net opening balance
Opening reinsurance contract assets
(60,730)
83,527
115,723
138,520
Opening reinsurance contract liabilities
(11,080)
358
2,825
(7,897)
Total net opening balance
(71,810)
83,885
118,548
130,623
Net income/(expenses) from reinsurance
contracts held
Reinsurance expenses
(117,021)
—
—
(117,021)
Claims recovered and other incurred directly
attributable expenses
—
(9,944)
106,441
96,497
Recoveries and reversals of recoveries of
losses on onerous underlying insurance
contracts
—
27,404
—
27,404
Changes that relate to past service -
adjustments to assets for the incurred claims
—
—
31,533
31,533
Total net income/(expenses) from reinsurance
contracts held
(117,021)
17,460
137,974
38,413
Finance income from reinsurance contracts
held
(22,227)
4,983
(1,088)
(18,332)
Total amounts recognised in comprehensive
income
(139,248)
22,443
136,886
20,081
Cash flows
Premiums paid net of ceding commissions and
other directly attributable expenses paid
136,499
—
—
136,499
Recoveries from reinsurance
—
—
(107,625)
(107,625)
Total cash flows
136,499
—
(107,625)
28,874
Net closing balance
Closing reinsurance contract assets
(56,368)
105,672
140,245
189,549
Closing reinsurance contract liabilities
(18,191)
656
7,564
(9,971)
Total net closing balance
(74,559)
106,328
147,809
179,578
Notes to the Financial Statements
146
ClearView Annual Report 2024
Asset for remaining coverage
Asset for
incurred
claims1
Total
Excluding
loss-recovery
component
Loss-recovery
component
2023
$'000
$'000
$'000
$'000
Net opening balance
Opening reinsurance contract assets
(50,484)
75,601
84,063
109,180
Opening reinsurance contract liabilities
(40,304)
5,647
16,579
(18,078)
Total net opening balance
(90,788)
81,248
100,642
91,102
Net income/(expenses) from reinsurance
contracts held
Reinsurance expenses
(102,197)
—
—
(102,197)
Claims recovered and other incurred directly
attributable expenses
—
(20,793)
106,258
85,465
Recoveries and reversals of recoveries of
losses on onerous underlying insurance
contracts
—
19,820
—
19,820
Changes that relate to past service -
adjustments to assets for the incurred claims
—
—
4,932
4,932
Total net income/(expenses) from reinsurance
contracts held
(102,197)
(973)
111,190
8,020
Finance income from reinsurance contracts
held
(6,196)
3,610
(6,108)
(8,694)
Total amounts recognised in comprehensive
income
(108,393)
2,637
105,082
(674)
Cash flows
Premiums paid net of ceding commissions and
other directly attributable expenses paid
127,371
—
—
127,371
Recoveries from reinsurance
—
—
(87,176)
(87,176)
Total cash flows
127,371
—
(87,176)
40,195
Net closing balance
Closing reinsurance contract assets
(60,730)
83,527
115,723
138,520
Closing reinsurance contract liabilities
(11,080)
358
2,825
(7,897)
Total net closing balance
(71,810)
83,885
118,548
130,623
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. As at 30 June 2024, ClearView received $193.6 million of the reinsurer’s share of incurred claims liability (30 June 2023: $176.7 million).
Notes to the Financial Statements
ClearView Wealth Limited
147
5.6.2 Reconciliation of the measurement components of reinsurance contract balances
Present
value of
future cash
flows
Risk
adjustment
for non-
financial
risk
CSM
Total
2024
$'000
$'000
$'000
$'000
Net opening balance
Opening reinsurance contract assets
47,013
105,178
(13,671)
138,520
Opening reinsurance contract liabilities
(16,316)
9,727
(1,308)
(7,897)
Total net opening balance
30,697
114,905
(14,979)
130,623
Changes that relate to current service
CSM recognised in profit and loss for services received
—
—
9,615
9,615
Change in risk adjustment for non-financial risk expired
—
(9,644)
—
(9,644)
Experience adjustments
(20,495)
—
—
(20,495)
(20,495)
(9,644)
9,615
(20,524)
Changes that relate to future service
Contracts initially recognised in the period
(10,888)
8,523
2,365
—
Changes in estimates that adjust the CSM
74,873
(14,114)
(60,759)
—
Changes in estimates that do not adjust the CSM for the group
of underlying insurance contracts
35,010
(11,452)
—
23,558
Changes in recoveries of losses on onerous underlying insurance
contracts that adjust CSM
—
—
3,846
3,846
98,995
(17,043)
(54,548)
27,404
Changes that relate to past service
Adjustments to the liability for incurred claims
29,123
2,410
—
31,533
29,123
2,410
—
31,533
Total net income/(expenses) from reinsurance contracts held
107,623
(24,277)
(44,933)
38,413
Finance income/(expenses) from reinsurance contracts held
(22,452)
4,319
(199)
(18,332)
Total amounts recognised in comprehensive income
85,171
(19,958)
(45,132)
20,081
Cash flows
Premiums paid net of ceding commissions and other directly
attributable expenses paid
136,499
—
—
136,499
Recoveries from reinsurance
(107,625)
—
—
(107,625)
Total cash flows
28,874
—
—
28,874
Net closing balance
Closing reinsurance contract assets
165,293
82,375
(58,119)
189,549
Closing reinsurance contract liabilities
(20,551)
12,572
(1,992)
(9,971)
Total net closing balance
144,742
94,947
(60,111)
179,578
Notes to the Financial Statements
148
ClearView Annual Report 2024
Present
value of
future cash
flows
Risk
adjustment
for non-
financial
risk
CSM
Total
2023
$'000
$'000
$'000
$'000
Net opening balance
Opening reinsurance contract assets
60,673
62,387
(13,880)
109,180
Opening reinsurance contract liabilities
(99,655)
50,904
30,673
(18,078)
Total net opening balance
(38,982)
113,291
16,793
91,102
Changes that relate to current service
CSM recognised in profit and loss for services received
—
—
2,092
2,092
Change in risk adjustment for non-financial risk expired
—
(9,686)
—
(9,686)
Experience adjustments
(9,138)
—
—
(9,138)
(9,138)
(9,686)
2,092
(16,732)
Changes that relate to future service
Contracts initially recognised in the period
(2,498)
8,624
(6,126)
—
Changes in estimates that adjust the CSM
23,401
(716)
(22,685)
—
Changes in estimates that do not adjust the CSM for the group
of underlying insurance contracts
20,005
5,442
—
25,447
Changes in recoveries of losses on onerous underlying insurance
contracts that adjust CSM
—
—
(5,627)
(5,627)
40,908
13,350
(34,438)
19,820
Changes that relate to past service
Adjustments to the liability for incurred claims
4,040
892
—
4,932
4,040
892
—
4,932
Total net income/(expenses) from reinsurance contracts held
35,810
4,556
(32,346)
8,020
Finance income/(expenses) from reinsurance contracts held
(6,326)
(2,942)
574
(8,694)
Total amounts recognised in comprehensive income
29,484
1,614
(31,772)
(674)
Cash flows
Premiums paid net of ceding commissions and other directly
attributable expenses paid
127,371
—
—
127,371
Recoveries from reinsurance
(87,176)
—
—
(87,176)
Total cash flows
40,195
—
—
40,195
Net closing balance
Closing reinsurance contract assets
47,013
105,178
(13,671)
138,520
Closing reinsurance contract liabilities
(16,316)
9,727
(1,308)
(7,897)
Total net closing balance
30,697
114,905
(14,979)
130,623
Notes to the Financial Statements
ClearView Wealth Limited
149
5.6.3 Impact of contracts recognised in the period
Contracts
originated
not in a net
gain
Contracts
originated in
a net gain
Total
2024
$’000
$’000
$’000
Reinsurance contracts held
Estimates of present value of future cash outflows
(111,661)
—
(111,661)
Estimates of present value of future cash inflows
122,549
—
122,549
Risk adjustment for non-financial risk
(8,523)
—
(8,523)
CSM
2,365
—
2,365
Contracts
originated
not in a net
gain
Contracts
originated in
a net gain
Total
2023
$’000
$’000
$’000
Reinsurance contracts held
Estimates of present value of future cash outflows
(103,320)
—
(103,320)
Estimates of present value of future cash inflows
105,818
—
105,818
Risk adjustment for non-financial risk
(8,624)
—
(8,624)
CSM
(6,126)
—
(6,126)
5.7
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.
In September 2022, APRA finalised changes to the capital and reporting frameworks for insurance in response
to the introduction of AASB 17. Subsequently, APRA made minor amendments to the finalised standards in June
2023.
Under the amended reporting standards, capital base adjustments reflects the difference between the adjusted
contract liabilities held for capital purposes and the contract liabilities held under AASB 17. This predominantly
reflects the removal of the deferred acquisition cost asset (AIACF) that is not permitted to be counted in the
regulatory capital base under the APRA capital standards. The capital base adjustment also includes the removal
of any deferred tax assets that cannot be included under the standards.
The 1 July 2022 opening Balance Sheet impact on net assets for in-force business as at the transition date has an
impact of $83.6 million after tax. As a result of the transition to AASB 17, the Group’s accounting net life insurance
contract liability, for which the carrying amount will be settled in future periods has increased. This results in
an increase in the deductible temporary differences and a related deferred tax asset of $35.9 million, given the
movement in the net life insurance contract liability is deductible when settled in the future. While the Australian
Taxation Office (ATO) and Treasury has yet to provide any announcement or guidance in respect of the AASB17
impacts on life insurance companies, there is no indication as at the date of the report that AASB 17 will result in a
change to the income tax laws. As these temporary differences create income tax losses on transition, given that
it is probable that the Group’s future taxable profit will be available against which the tax losses can be utilised,
the additional deferred tax asset of $35.9 million has been recognised on balance sheet on transition. However, no
capital benefit has been taken into account in the period. The tax benefit should be realised in future periods as
the losses are utilised.
The ClearView’s regulatory capital base and prescribed capital amount do not change significantly under the
amended capital prudential and reporting standards.
The capital adequacy position at balance date for ClearView Life, in accordance with the APRA requirements, is as
follows:
Notes to the Financial Statements
150
ClearView Annual Report 2024
Capital position
Shareholder’s
Fund
Statutory
fund No. 1
Australian
non-
participating
Statutory
fund No. 2
Australian
non-
participating
Statutory
fund No. 4
Australian
non-
participating
ClearView
Life
Assurance
Limited
2024
2024
2024
2024
2024
$'000
$'000
$'000
$'000
$'000
Net Assets (Common Equity Tier 1 Capital)
399
372,900
663
7,837
381,800
Intangibles adjustments1
—
—
—
—
—
Net tangible assets after intangible
adjustments
399
372,900
663
7,837
381,800
Capital base adjustments
—
Deferred tax assets
—
(37,406)
(16)
(2,332)
(39,754)
Contract liabilities
—
(239,218)
—
—
(239,218)
Tier 2 capital
—
30,000
—
—
30,000
Regulatory capital base
399
126,276
647
5,506
132,827
Prescribed Capital Amount (PCA)
(3)
(20,643)
(7)
(3,724)
(24,376)
Available Enterprise Capital (AEC)
396
105,633
640
1,782
108,451
Capital Adequacy Multiple
148.6
6.1
93.8
1.5
5.4
Prescribed capital amount comprises of:
Insurance Risk
—
—
—
—
—
Asset Risk
(2)
(6,638)
(4)
(50)
(6,694)
Asset Concentration Risk
—
—
—
—
—
Operational Risk
—
(11,160)
(1)
(3,652)
(14,813)
Aggregation Benefit
—
—
—
—
—
Combined Stress Scenario Adjustment
(1)
(2,845)
(2)
(21)
(2,869)
Prescribed Capital Amount
(3)
(20,643)
(7)
(3,724)
(24,376)
1
Intangible adjustments relate to capitalised software.
Shareholder’s
Fund
Statutory
fund No. 1
Australian
non-
participating
Statutory
fund No. 2
Australian
non-
participating
Statutory
fund No. 4
Australian
non-
participating
ClearView
Life
Assurance
Limited
2023
2023
2023
2023
2023
$'000
$'000
$'000
$'000
$'000
Net Assets (Common Equity Tier 1 Capital)
393
458,669
580
9,744
469,386
Intangibles adjustments1
—
—
—
(2,882)
(2,882)
Net tangible assets after intangible
adjustments
393
458,669
580
6,862
466,504
Capital base adjustments
Deferred tax assets
—
(2,120)
—
(68)
(2,188)
Deferred acquisition costs
—
(386,924)
—
—
(386,924)
Tier 2 capital
—
30,000
—
—
30,000
Regulatory capital base
393
99,624
580
6,793
107,391
Prescribed Capital Amount (PCA)
(3)
(18,576)
(7)
(3,444)
(22,031)
Available Enterprise Capital (AEC)
389
81,048
573
3,350
85,360
Capital Adequacy Multiple
114.2
5.4
79.2
2.0
4.9
Prescribed capital amount comprises of:
Insurance Risk
—
—
—
—
—
Asset Risk
(3)
(5,724)
(7)
(81)
(5,815)
Asset Concentration Risk
—
—
—
—
—
Operational Risk
—
(10,399)
(1)
(3,363)
(13,763)
Aggregation Benefit
—
—
—
—
—
Prescribed Capital Amount
(3)
(18,576)
(7)
(3,444)
(22,031)
1
Intangible adjustments relate to capitalised software.
Notes to the Financial Statements
ClearView Wealth Limited
151
6. Capital structure
and capital risk
management
This section provides information in relation to the Group’s capital structure and
financing facilities
152
6.1 Issued capital
153
6.2 Movements in reserves
153
6.3 Shares granted under the
executive share plan
154 6.4 Subordinated debt
154 6.5 Borrowings
155
6.6 Capital risk management
Notes to the Financial Statements
152
ClearView Annual Report 2024
6. Capital structure and capital risk management
6.1
Issued capital
No. of
ordinary
shares
Issued
capital
Treasury
shares
Total share
capital
2024
$’000
$’000
$’000
Balance at the beginning of the financial year
642,905,216
469,250
(2,407)
466,843
Shares issued during the year (ESP exercised)
2,000,000
—
—
—
Dividend paid
—
195
—
195
Transfer from share based payment reserve and
cancellation of forfeited ESP shares1
—
2,932
—
2,932
Shares released
—
—
90
90
Balance at the end of the financial year
644,905,216
472,377
(2,317)
470,060
2023
Balance at the beginning of the financial year
642,905,216
469,062
(2,407)
466,655
Transfer from share based payment reserve and
cancellation of forfeited ESP shares1
—
188
—
188
Balance at the end of the financial year
642,905,216
469,250
(2,407)
466,843
Company
2024
2023
No. of Shares No. of Shares
Executive share plan
Balance at the beginning of the financial year
16,633,432
18,133,432
Shares forfeited during the year2
(8,523,505)
(1,500,000)
Shares exercised during the year
(2,000,000)
—
Balance at the end of the financial year
6,109,927
16,633,432
1
ESP reserve of the forfeited and cancelled shares were transferred to share capital.
2
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 2,603,327 (30 June 2023: 2,783,324) with a value of
$2,316,598 (30 June 2023: $2,406,598) at an average price per share of $0.89 (30 June 2023: $0.86).
Share issue due to ESP exercise and ESP forfeiture
In FY24, following the departure of employees (former Executives), 8.5 million (FY23: 1.5 million) ESP shares that
were not exercised have been forfeited.
Notes to the Financial Statements
ClearView Wealth Limited
153
6.2 Movements in reserves
Consolidated
Company
2024
2023
2024
2023
$'000
$'000
$'000
$'000
Restated
Retained earnings/(losses)
Balance at the beginning of the financial year
(80,108)
7,881
(111,647)
(111,647)
Impact of initial application of AASB 17 (refer to
section 9.6)
—
(83,653)
—
—
Balance at the beginning of the financial year
(restated)
(80,108)
(75,772)
(111,647)
(111,647)
Net profit/(loss) attributable to members of the
parent entity
(12,449)
8,884
(14,687)
—
Transfer to profit reserve
—
—
—
—
Dividend paid during the year
(29,747)
(13,220)
—
—
Balance at the end of the financial year
(122,304)
(80,108)
(126,334)
(111,647)
Share based payments reserve1
Balance at the beginning of the financial year
6,692
6,562
4,285
4,155
Recognition of share based payments
305
(166)
305
(166)
Transfer from accrued employee entitlements2
490
435
490
435
ESP loans settled through dividend
325
199
325
199
ESP shares vested/(forfeited)
(2,316)
(338)
(2,316)
(338)
Shares released
(90)
—
—
—
Balance at the end of the financial year
5,406
6,692
3,089
4,285
Consolidated
Company
2024
2023
2024
2023
$'000
$'000
$'000
$'000
Profit reserve
Balance at the beginning of the financial year
—
—
26,166
21,015
Profit for the year
—
—
7,663
18,371
Dividend paid during the year
—
—
(29,747)
(13,220)
Balance at the end of the financial year
—
—
4,082
26,166
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).
6.3 Shares granted under the executive share plan
In accordance with the provisions of the ESP, as at 30 June 2024, key management have acquired 6,109,927 (30
June 2023: 16,633,432, excluding 1,500,000 forfeited shares) ordinary shares. Shares granted under the ESP carry
rights to dividends and voting rights.
In June 2024, the Board exercised its discretion under the ESP Plan Rules to ensure the consistency between
participants and given the timeframe that the ESP shares have been on issue. This resulted in the amendment of
the conditions attached to the remaining unvested ESP shares (as they were subject to the ‘Change in Control’
vesting criteria), such that the Board approved the immediate vesting in June 2024. As at 30 June 2024, all ESP
shares (6,109,927 shares) are vested.
Financial assistance amounting to $4,965,282 (30 June 2023: $11,765,742) was made available to executives and
senior employees to fund the acquisition of shares under the ESP.
As all the ESP shares have vested, in June 2024 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 14 months
after a Change in Control of the Company (as defined in the ESP Rules).
Notes to the Financial Statements
154
ClearView Annual Report 2024
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 $7.7 million (2023: $6.6
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 (2023: $0.3 million)
For the year ended 30 June 2024, total subordinated debt is as follows:
Consolidated
Company
2024
2023
2024
2023
$'000
$'000
$'000
$'000
Balance at the beginning of the financial year
74,200
73,857
74,200
73,857
Amortisation of capitalised costs
343
343
343
343
Balance at the end of the financial year
74,543
74,200
74,543
74,200
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.
6.5 Borrowings
Financing Facilities
Consolidated
Company
2024
2023
2024
2023
$'000
$'000
$'000
$'000
The Group has access to the following facilities:
Bank Guarantees
– amount used
2,854
2,850
—
—
Overdraft and credit
– amount used
—
—
—
—
– amount unused
2,000
2,000
—
—
Bank Facility
– amount used
31,000
16,000
31,000
16,000
– amount unused
29,000
44,000
29,000
44,000
As at the reporting date, the Company had a $60 million facility agreement with the National Australia Bank. $31
million has been drawn down with the balance available for immediate use (30 June 2023: $16 million). $15 million
was drawn down in the year to partly fund the FY23 final cash dividend. The facility is repayable on 1 August 2026.
Interest on the loan accrues at BBSY plus a margin of 0.95% per annum (FY23: 0.95%), and is payable quarterly.
Furthermore, a line fee of 0.75% per annum (FY23: 0.75%) is payable on the facility on a quarterly basis.
Notes to the Financial Statements
ClearView Wealth Limited
155
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
for the preceding 12 months period must be at least
3 times. As a result of the implementation of AASB
17 since 1 July 2023, the interest cover calculation has
been updated for the year ended 30 June 2024. The
interest cover is the ratio of the adjusted consolidated
profit to the interest expense. The adjusted
consolidated profit is the consolidated reported profit
after tax from continuing operations plus the changes
in AIACF impairments plus the changes in economic
assumption impact on AASB 17 liability plus the
income tax expense plus the interest on the Notes plus
the interest on the borrowings. The interest expense
is the interest on the Notes plus the interest on the
borrowings.
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 2024,
ClearView has been operating within its covenants
under the terms of the Facility Agreement. The Group
has not identified any breaches at 30 June 2024 nor
at the time at which these financial statements were
authorised for issue. The facility has been secured by
a number of cross guarantees, refer to section 9.5 for
detail.
ClearView Life Assurance Limited has a $2 million
(30 June 2023: $2 million) overdraft facility with
National Australia Bank at a benchmark interest rate
of 10.72% p.a (2023: 10.47% p.a) calculated daily. Any
overdrawn balance in excess of the overdraft will incur
an additional margin of 1.5% p.a (2023: 1.5% p.a) above
the benchmark interest rate. The bank overdraft is
short-term in nature and was unutilised at 30 June
2024 and 30 June 2023. There is an additional $0.25
million credit card facility with National Australia Bank
in the name of ClearView Administration Services Pty
Limited.
6.6 Capital risk management
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 net surplus capital position of the Group above
internal benchmarks of $27.1 million at 30 June 2024
is stated prior to the declaration of the FY24 final
dividend and any further capital release from the exit
of the wealth management business (net of costs).
The surplus capital position and future business capital
generation is anticipated to fund the net capital
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.
ClearView has implemented an incurred claims
treaty with 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 2024.
As previously reported, the $70 million irrevocable
letter of credit with a major Australian bank on behalf
of Swiss Re has been reinstated effective from 30 June
2022 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’.
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. It is intended that the target payout
ratio of 40%-60% will be uplifted post completion
of the IT transformation investment and wealth
management exit.
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
• Ensure transparent communication to the market
around Embedded Value estimation and its
relationship to the prevailing share price.
Notes to the Financial Statements
156
ClearView Annual Report 2024
A FY23 fully franked final cash dividend of $19.8
million, equating to 3 cents per share was paid on 22
September 2023. This represented an increase of 50%
on the prior year.
A FY24 fully franked interim cash dividend of $9.9
million, equating to 1.5 cents per share was paid on
22 March 2024, the first time an interim dividend has
been paid.
The Board has declared (on 22 August 2024), a fully
franked FY24 final dividend of $11.1 million, equating to
1.7 cents per share, with a record date of 5 September
2024 (FY24 final dividend is payable on 20 September
2024).
The total dividends paid in respect of the FY24
financial year is therefore 3.2 cents per share, up 7% on
the prior year and represents a dividend yield of 5.5%
based on a 90 day VWAP share price at 30 June 2024
of $0.5772 per share.
The FY24 total payout ratio is 60% of Underlying
NPAT – at the top end of the target payout ratio range.
The Company’s DRP (Dividend Reinvestment Plan) will
be reinstated and operate for the FY24 final dividend
in accordance with the DRP rules below:
• Shareholders will have the opportunity to reinvest
into the growth ambitions of the Company while
retaining capital within the Group;
• Given the current liquidity of ClearView’s share
trading, it is not considered appropriate to
minimise the dilutive impact of the DRP through
the on-market purchase of the number of shares to
satisfy the DRP participation; and
• It is also not the intention to seek support for
any shortfall in shareholder participation by
underwriting the shortfall to maintain the capital
base within the group given that the Group is now
in a net capital generation position.
1
Underlying NPAT (from continuing operations) continues to be adopted by the Board as its key measure of Group profitability and basis for
dividend payment decisions. It is used as a non IFRS measure of earnings that excludes the impacts of market and interest rate volatility,
with the definition updated to reflect the application of AASB 17. Underlying NPAT (from continuing operations) has been defined as the
consolidated profit after tax excluding the effects of economic changes on both the AASB 17 insurance contract liability and the incurred
income protection disabled lives reserves, the (non-cash) impairment of the asset for acquisition cash flows (AIACF), changes in the loss
component that is predominantly driven by the level premium business, current year timing impacts of assumption changes on the contractual
services margin and any costs considered unusual to the Group’s ordinary activities. Underlying NPAT includes the amortisation of capitalised
software and leases, underlying investment income (the portfolio carry yield on the investment portfolio and interest rate earned on physical
cash holdings), costs associated with the incurred claims reinsurance treaties and interest costs associated with corporate debt and Tier 2
Capital.
Shares under the Dividend Reinvestment Plan (DRP)
will be issued at a fixed price of $0.59, which is
consistent with ClearView’s DRP rules.
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 current 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 scheme
was 1,208,824.
Employee buy-back of Executive Share Plan
shares
In the year ended 30 June 2024, there were a further
8,523,505 Executive Share Plan (ESP) shares held by
employee participants that have been forfeited and
bought back in accordance with the rules of the plan
(30 June 2023: 1,500,000 ESP shares from employee
participants were in the process of being bought
back and cancelled at 30 June 2023 and these were
completed in FY24).
Notes to the Financial Statements
ClearView Wealth Limited
157
7. Employee
disclosures
This section provides information on the remuneration of key
management personnel and the Group’s employee share plan
158
7.1 Key management personnel
compensation
158
7.2 Share based payments
Notes to the Financial Statements
158
ClearView Annual Report 2024
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 10 to 75 of
the Annual Report. The aggregate compensation made to Key Management Personnel (KMP) of the Company and
the Group is set out below2:
Consolidated
2024
2023
$
$
Short-term employee benefits
4,952,651
5,695,277
Post-employment benefits
223,420
352,646
Share based payments1
827,178
323,722
Termination benefits
-
262,281
Total
6,003,248
6,633,926
1
In FY23, the FY20 LTIP reserve was reversed due to the non-market performance conditions not being met.
2
2024 column excludes aggregate compensation made to former key management personnel of $2.1 million as outlined in the Directors’ Report.
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 2023: $0.7 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 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.
Notes to the Financial Statements
ClearView Wealth Limited
159
Share schemes
A summary of deferred equity award plans for employees is set out below:
Plan
Available to
Nature of the award
Vesting conditions
Short Term Variable
Remuneration Plan
(STVR) (From 1 July
2020) 1, 2
Managing Director
and executives
60% delivered by cash.
40% deferred as
restricted rights to
fully paid ordinary
shares.
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.
Long Term Variable
Remuneration Plan
(LTVR) (From 1 July
2020) 1, 2, 3
Managing Director
and executives
Performance rights
to fully paid ordinary
shares
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 and embedded value targets.
Executive Share Plan
(ESP) (Prior to 30 June
2017) 2, 4
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. All ESP shares have vested
and the loan term of all Employee
Participants has extended for a period
until 14 months after a Change in
Control of the Company (as defined in
the ESP Rules) who remain employees
at the expiry of their loan term.
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.
4
In June 2024, the Board exercised its discretion under the ESP Plan Rules to ensure the consistency between participants and given the
timeframe that the ESP shares have been on issue. This resulted in the amendment of the conditions attached to the remaining unvested ESP
shares (as they were subject to the ‘Change in Control’ vesting criteria), such that the Board approved the immediate vesting in June 2024.
Performance and restricted rights
Details of the number of employee entitlements to performance rights under the Plan (LTVR) 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:
No. of rights
2024
2023
Balance at the beginning of the financial year
11,414,805
9,915,447
Granted
3,822,974
4,059,757
Forfeited
(3,516,384)
(2,560,399)
Balance at the end of the financial year1
11,721,395
11,414,805
Weighted average share price at date of vesting of performance rights
during the year
n/a
n/a
Weighted average fair value of performance rights granted during the
year
$0.34
$0.29
Weighted average fair value of restricted rights granted during the
year
$0.48
$0.74
1
Balance at end of the financial year does not include the financial year’s deferred STVR component.
Notes to the Financial Statements
160
ClearView Annual Report 2024
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
2024 2
2023 1
Share price at grant date
$0.55
$0.48
Exercise price
Nil
Nil
Volatility
51.1%
46.5%
Dividend yield
5.82%
7.02%
Anticipated performance right life (years)
3.83
3.44
Present value of future expected dividends
0.1306
0.09
Fair value at grant date - Market conditions3
$0.228 - $0.268
$0.19
Fair value at grant date - Non-market performance conditions
$0.42
$0.39
Restricted rights
2024
2023
Fair value at grant date
$0.48
$0.74
1
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.
2
The 2024 target is based on a TSR from 1 July 2023 to 30 June 2027 for 50% performance rights and an Embedded Value (EV) as at 30 June
2027 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.
3
The 2024 market condition performance rights include 2 tranches, in which one tranche is stretch and offered to only one employee. The fair
values of tranche 1 and tranche 2 (stretch) are $0.268 and $0.228, respectively.
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:
2024
2023
Number of
shares
Weighted
average
exercise
price
$
Number of
shares
Weighted
average
exercise
price
$
Balance at the beginning of the financial year
16,633,432
0.71
18,133,432
0.71
Forfeited during the year
(8,523,505)
0.68
(1,500,000)
1.09
Exercised during the year
(2,000,000)
0.51
—
0.56
Balance at the end of the financial year
6,109,927
0.81
16,633,432
0.71
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 LTVR amounted to $0.3 million (net of the
reversal of expenses for forfeiture of LTVRs during the year) (2023: -$0.2 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 (2023:
nil) is included in the results of discontinued operations. STVR deferred component (restricted rights) expense of
$0.5 million (2023: $0.5 million) is included in employee expenses.
Notes to the Financial Statements
ClearView Wealth Limited
161
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:
162
8.1 Equity interests in
subsidiaries
163
8.2 Investment in associate
163
8.3 Transactions between
the Group and its related
parties
165
8.4 Investment in controlled
units trusts
166 8.5 Discontinued operations
Notes to the Financial Statements
162
ClearView Annual Report 2024
8. Related parties and other Group entities
8.1
Equity interests in subsidiaries
Details of the percentage of ordinary shares held in subsidiaries.
Ownership interest
Name of entity
Principal
activity
Parent
entity
Country of
incorporation
2024
2023
%
%
Parent entity
ClearView Wealth Limited (CWL)
Holding
Company
—
Australia
Subsidiaries
ClearView Group Holdings Pty Limited (CGHPL)
Holding
Company
CWL
Australia
100
100
ClearView Life Assurance Limited (CLAL)
Life Company
CGHPL Australia
100
100
ClearView Financial Management Limited (CFML)1
Responsible
Entity
CWL
Australia
—
100
ClearView Life Nominees Pty Limited (CLN)2
Non operating
CWL
Australia
100
100
ClearView Administration Services Pty Limited
(CASPL)
Administration
Service Entity
CWL
Australia
100
100
ClearView Employee Share Trust (CVEST)
Trustee
CWL
Australia
100
100
Interest in associates
Centrepoint Alliance Limited3
Advice
Company
—
Australia
—
24.38
1
CFML was sold to Human Financial on 31 January 2024. See section 8.5 for detail.
2
CLN retired as the trustee of ClearView Retirement Plan (CRP) on 14 December 2023. See section 8.5 for detail.
3 CWL has fully divested the investment in Centrepoint Alliance Limited as at 30 June 2024. See section 8.2 for detail.
Ownership
interest
Name of entity
Principal
activity
Parent
entity
Country of
incorporation
2024
2023
%
%
Controlled unit trusts
CVW Index Fixed Interest Fund
Wholesale Fund
CLAL
Australia
97
97
CVW Schroder Equity Opportunities Fund
Wholesale Fund
CLAL
Australia
47
42
CVW Fixed Interest Fund
Wholesale Fund
CLAL
Australia
56
55
CVW Index International Shares Fund
Wholesale Fund
CLAL
Australia
94
93
CVW Money Market Fund
Wholesale Fund
CLAL
Australia
93
92
CVW First Sentier Investors Infrastructure Fund
Wholesale Fund
CLAL
Australia
31
28
CVW Antipodes Global Fund
Wholesale Fund
CLAL
Australia
31
33
CVW Hyperion Australian Shares Fund
Wholesale Fund
CLAL
Australia
100
100
CVW Index Infrastructure and Property Fund
Wholesale Fund
CLAL
Australia
92
90
CVW Index Emerging Markets Fund
Wholesale Fund
CLAL
Australia
94
95
CVW Index Australian Shares Fund
Wholesale Fund
CLAL
Australia
93
92
CVW Aoris International SRI Fund
Wholesale Fund
CLAL
Australia
44
42
CVW Fairlight Global Fund
Wholesale Fund
CLAL
Australia
52
51
Non-controlled unit trusts
CVW ClearBridge RARE Emerging Markets Fund4
Wholesale Fund
CLAL
Australia
—
32
4 This fund was not controlled by the Company as at 30 June 2024 as CLAL was no longer a unitholder of this fund. In FY23, this fund was
controlled by the Company.
Notes to the Financial Statements
ClearView Wealth Limited
163
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 is based on the
Company’s power over the relevant activities of the
unit trusts and the significance of its exposure to
variable returns of the unit trusts (that is CLAL owns
more than 50% of total units or is a major unitholder
of the unit trusts) .
8.2 Investment in associate
ClearView acquired a strategic 24.5% stake (48 million
shares) in Centrepoint Alliance Limited (Centrepoint
Alliance) on 1 November 2021 as part of the sale of its
financial advice businesses to Centrepoint Alliance.
On 17 November 2023, ClearView announced the sale
of approximately 39.56 million shares in Centrepoint
Alliance to COG Financial Services Limited (COG),
at a share price of 33 cents per share representing
total consideration of $13.05 million. The sale shares
represent approximately 19.9% of Centrepoint
Alliance’s issued capital.
The remaining 8.4 million shares were subsequently
sold on the market from 17 November 2023, at
an average exit price of circa 27 cents per share,
representing total consideration of $2.2 million (net of
costs of sales).
Before the sales, the carrying value of the investment
in associate was $13.1 million (net of impairment of
$1.6 million). The sale resulted in $2.2 million gain from
sale.
ClearView has fully divested the investment in
associate and holds no Centrepoint Alliance’s shares
as at 30 June 2024.
The Centrepoint Alliance transaction has been equity
accounted until the date of sale, contributing $0.6
million in FY24 (FY23: $0.7 million).
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 2024 are outlined below.
The ultimate parent entity in the Group is ClearView
Wealth Limited which is incorporated in Australia.
Notes to the Financial Statements
164
ClearView Annual Report 2024
Outstanding balances between the Group and its related parties
ClearView
Wealth
Limited
ClearView
Life
Assurance
Limited
ClearView
Admin
Services
Pty
Limited
Total
2024
$
$
$
$
ClearView Wealth Limited
—
(2,534,246)
3,840,352
1,306,106
ClearView Life Assurance Limited
2,534,246
—
(940,003)
1,594,243
ClearView Admin Services Pty Limited
(3,840,352)
940,003
—
(2,900,349)
Total
(1,306,106)
(1,594,243)
2,900,349
—
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
Total
2023
$
$
$
$
$
$
$
$
ClearView Wealth Limited
—
6,091,362
(486,480)
2,541,524
35,673
(73)
—
8,182,006
ClearView Life Assurance Limited
(6,091,362)
—
(18,473)
(8,509,998)
—
393,212
—
(14,226,621)
ClearView Financial Management
Limited
486,480
18,473
—
(43,432)
—
—
515,485
977,006
ClearView Admin Services Pty Limited
(2,541,524)
8,509,998
43,432
—
—
—
—
6,011,906
ClearView Life Nominees Pty Limited
(35,673)
—
—
—
—
—
—
(35,673)
ClearView Retirement Plan
73
(393,212)
—
—
—
—
—
(393,139)
CFML Managed Investment Schemes
—
—
(515,485)
—
—
—
—
(515,485)
Total
(8,182,006)
14,226,621
(977,006)
(6,011,906)
35,673
393,139
515,485
—
Related party tax assets
As at 30 June 2024 the ClearView Group carried no receivable (30 June 2023: $0.4 million receivable after a
write down of $0.3 million in FY23 in respect of the FY22 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, and $0.4 million
provision fully provided) from ClearView Retirement Plan (CRP).
Related party transactions with associates
During the year, ClearView has continued to transact with Centrepoint Alliance’s financial advice businesses. Until
the date of sale of investment in associate, the aggregate amounts included in the determination of profit before
tax that resulted from key transactions with Centrepoint Alliance are:
• Risk commission paid $3.0 million (2023: $6.3 million); and
• Fees paid for adviser services $1.9 million (2023: $4.7 million).
Other transactions between the Group and associate entities consisted of 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 $7.7 million (2023: $6.6
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 $3.1 million (2023: $2.7
million). The internal notes and associated interest is eliminated in the Group’s consolidated financial statements.
Notes to the Financial Statements
ClearView Wealth Limited
165
Other related party transactions
A Deed of Retirement and Appointment was entered into by CLN as the retiring trustee, CLAL as the appointer
and ETSL as the new trustee of the CRP. Related to the change of trusteeship, related party administration
agreements were novated from CLN to ETSL, and memoranda of transfers were effected for the relevant
underlying life investment policies.
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.
8.4 Investment in controlled unit trusts
Consolidated 2024
Consolidated 2023
Name
Type
$'000
%
$'000
%
Controlled unit trusts
CVW Index Fixed Interest Fund
Debt
209,189
97
200,573
97
CVW Schroder Equity Opportunities Fund
Equities
58,752
47
52,138
42
CVW Fixed Interest Fund
Debt
184,396
56
198,477
55
CVW Index International Shares Fund
Equities
279,164
94
251,867
93
CVW Money Market Fund
Debt
147,385
93
145,970
92
CVW First Sentier Investors Infrastructure Fund
Property
19,876
31
20,511
28
CVW Antipodes Global Fund
Equities
28,984
31
38,265
33
CVW Hyperion Australian Shares Fund
Equities
9,476
100
17,397
100
CVW Index Infrastructure and Property Fund
Property
117,809
92
98,174
90
CVW Index Emerging Markets Fund
Equities
56,699
94
41,756
95
CVW Index Australian Shares Fund
Equities
210,453
93
189,864
92
CVW Aoris International SRI Fund
Equities
32,514
44
34,302
42
CVW Fairlight Global Fund
Equities
37,364
52
39,700
51
Non-controlled unit trusts
CVW ClearBridge RARE Emerging Markets Fund
Equities
—
—
16,792
32
Total
1,392,061
1,345,786
In which:
Assets held for sale (see section 8.5(d))
1,390,689
1,344,646
Investments
1,372
1,140
Notes to the Financial Statements
166
ClearView Annual Report 2024
8.5 Discontinued operations
The Board had previously 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 continues to
be committed to the exit of the Wealth Management
business with significant progress made in the year.
Sale of investment management business
ClearView entered into a share sale agreement (on
22 February 2023) for the sale of ClearView Financial
Management Limited (CFML) to Human Financial Pty
Limited (Human Financial), subject to the completion
of certain conditions precedent. The original sale
agreement proceeds included a cash component of
$1.3 million and a 40% equity stake in Human Financial.
In November 2023 and subsequently in January
2024, ClearView signed revised sale agreements with
Human Financial. Under the terms of the revised sale
agreements, the proceeds included a cash component
of $5 million, with no allowance for an equity interest
in Human Financial. Prior to completion of the sale, in
January 2024, ClearView received a pre-completion
dividend of $0.75 million from CFML that did not result
in CFML’s net tangible assets being less than $5 million.
Completion of the sale occurred on 31 January 2024,
with a deferred consideration of $4.85 million (net
of $0.15 million completion payment) received on 28
February 2024.
Exit of superannuation business
The superannuation fund trustee, ClearView Life
Nominees Pty Limited (CLN) has, at the same
time, been considering a number of options and
the best way forward for the superannuation fund,
ClearView Retirement Plan (CRP). CLN entered into
a deed of retirement and appointment (DORA) with
Equity Trustees Superannuation Limited (ETSL) that
effectively changed the trustee of the CRP to ETSL
with effect from 14 December 2023. ETSL is as at the
date of this report undertaking a process to determine
the most appropriate pathway for the CRP. The
outcome of these considerations informs the roadmap
and timing for the exit of the superannuation business
and the related unwind of the life investment contracts
attached to the CRP. Subsequent to its retirement as
the trustee for the CRP, CLN is no longer an operating
entity and has released the capital previously held
in the trustee for operational risk (Operating Risk
Financial Requirement - ORFR). Aligned to the
transition of trustee, ClearView Wealth Limited (CWL)
has entered into arrangements with Equity Trustees
Limited (EQT) to provide funding reflective of the
ORFR to EQT for an amount of $3.5 million, until the
successor fund transfer (SFT) of the CRP is completed.
This is expected to be repaid on completion of the SFT
in due course (subject to there being no operational
risk event under the terms of the agreement).
On 22 April 2024, ClearView received a draw notice
from EQT that requested a loan of $3.25 million to be
drawn on 1 May 2024 with the interest period being
3 months. ClearView transferred the requested loan
amount to EQT on 1 May 2024. The loan is included in
the receivable (see section 3.1) and the ECL for the loan
is considered immaterial as the risk of default is low.
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 of full exit of the
Wealth Management business remains uncertain but is
expected to be by Q3 FY25.
In accordance with AASB 5 Non-Current Assets Held
for Sale and Discontinued Operations, the Wealth
Management segment (excluding CFML which was sold
in January 2024) continues to meet the criteria to be
classified as held for sale in the consolidated financial
statements for the period ended 30 June 2024.
Notes to the Financial Statements
ClearView Wealth Limited
167
The financial information reflecting the discontinued operations is as follows:
Consolidated
2024
2023
$'000
$'000
a) Results of discontinued operations
Revenue
194,582
225,619
Expenses
(207,551)
(221,711)
(Loss)/profit before income tax
(12,969)
3,908
Income tax (expense)/benefit
(4,408)
(7,748)
Loss for the period from discontinued operations
(17,377)
(3,840)
Loss on sale of discontinued operations after income tax (see c) below)
(2,072)
—
(Loss)/profit from discontinued operations attributable to equity holders of the
parent
(19,449)
(3,840)
Earnings per share from discontinued operations
Basic (cent per share)
(3.03)
(0.60)
Diluted (cent per share)
(3.03)
(0.60)
b) Cash flows from discontinued operations
Net cash (utilised)/generated by operating activities
(25,751)
22,107
Net cash generated by investing activities
150,800
140,301
Net cash utilised by financing activities
(129,830)
(159,394)
Net cash flows for the period from discontinued operations
(4,781)
3,014
c) Details of sale of discontinued operations
Consideration received:
Cash
4,850
—
Total disposal consideration
4,850
—
Carrying amount of net assets sold
(5,173)
—
Net asset adjustments1
173
—
Transaction costs2
(1,922)
—
Loss on sale before income tax
(2,072)
—
Income tax benefit
—
—
Loss on sale after income tax
(2,072)
—
1
Net asset adjustments, which relate to the actual net asset of CFML exceeding $5m at the date of sale, are expected to be finalised in 1H FY25.
2
Costs associated with the sale of CFML.
Notes to the Financial Statements
168
ClearView Annual Report 2024
The carrying amounts of assets and liabilities as at the date of sale of CFML (31 January 2024) were:
31 January
2024
$'000
Cash and cash equivalent
5,447
Receivables
174
Total assets
5,621
Payables
448
Total liabilities
448
Net assets
5,173
Consolidated
Company
2024
2023
2024
2023
Note
$'000
$'000
$'000
$'000
d) Assets and liabilities classified as
held for sale
Assets
Cash and cash equivalent
33,378
44,331
—
—
Investments
3.3
1,834,709
1,868,598
—
11,956
Receivables
2,608
2,297
—
—
Deferred tax assets
(146)
285
—
—
Goodwill
4.1
—
8,500
—
—
Intangible assets
4.1
—
2,882
—
—
Assets held for sale
1,870,549
1,926,893
—
11,956
Liabilities
Payables
11,146
6,285
—
—
Life investment contract liabilities
5.4
1,386,554
1,345,138
—
—
Liability to non-controlling interest in
controlled unit trusts
467,562
557,485
—
—
Deferred tax liabilities
5,085
—
—
—
Liabilities directly associated with
assets held for sale
1,870,347
1,908,908
—
—
Net assets directly associated with
disposal group
202
17,985
—
11,956
Notes to the Financial Statements
ClearView Wealth Limited
169
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. An
impairment loss of $11.4 million was recognised for
the assets held for sale as at 30 June 2024 (30 June
2023: nil) and included in the discontinued operation
results. This includes $8.5 million impairment of the
goodwill allocated to the Wealth Business segment and
$2.9 million impairment of the front-end wealth portal
capitalised software asset.
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.
Notes to the Financial Statements
170
ClearView Annual Report 2024
9. Other
disclosures
171
9.1 Notes to the Consolidated
Statement of cash flows
171
9.2 Contingent liabilities and
contingent assets
172
9.3 Leases
174
9.4 Capital commitments
174
9.5 Guarantees
174
9.6 New accounting standards
176
9.7 Subsequent events
Notes to the Financial Statements
ClearView Wealth Limited
171
9. Other disclosures
9.1
Notes to the Consolidated statement of cash flows
Consolidated
Company
2024
2023
2024
2023
$'000
$'000
$'000
$'000
Restated
Net (loss)/profit for the year
(12,449)
8,884
(7,024)
18,371
Fair value gains on financial assets at fair value through
profit and loss
(136,923)
(115,893)
—
—
Amortisation and depreciation
7,134
6,408
—
—
Impairment of goodwill, intangibles and investment in
subsidiaries
11,382
—
3,843
—
Employee share plan expense/(reversal of expense)
195
(166)
—
—
Other non operating expenses/cash items
12,781
(16,299)
7,251
(14,788)
Interest and other finance costs
7,744
16,765
—
—
Gain from sale of subsidiaries and associates
(731)
—
—
—
Movement in provision
(2,457)
1,513
(10)
10
Movements in liabilities to non-controlling interest in
controlled unit trust
39,908
88,128
—
—
(Increase)/decrease in receivables and capitalised costs
(4,706)
3,298
1,183
3,715
(Increase)/decrease in deferred tax asset
(41,234)
4,372
(2,810)
171
(Decrease)/increase in payables
(1,057)
6,595
4,256
(900)
Increase in investment contract liabilities
41,403
50,085
—
—
Increase in insurance contract liabilities
92,478
19,690
—
—
Increase in reinsurance contract assets
(48,955)
(9,558)
—
—
Increase/(decrease) in deferred tax liability
5,610
(21)
—
(79)
Increase/(decrease) in current tax liability
32,779
7,600
(6,597)
11,125
Net cash generated by operating activities1
2,902
71,401
92
17,625
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 acted as a trustee for various trusts. In this capacity, the subsidiaries were 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 until such date. On 14 December 2023, the trusteeship of the CRP changed from CLN to a third party, ETSL.
As part of the sale of CFML to Human Financial, CFML ceased to be a subsidiary on 31 January 2024.
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.
Notes to the Financial Statements
172
ClearView Annual Report 2024
Industry and regulatory compliance
investigations
ClearView is subject to review from time to time by
regulators. ClearView’s principal regulators are APRA,
ASIC and AUSTRAC, although other government
agencies 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
ClearView was the beneficiary of a $70 million
irrevocable letter of credit issued by Australia and
New Zealand Banking Group Limited (ANZ) on behalf
of Swiss Re Life and Health Australia (Swiss Re). The
letter of credit is applied across both lump sum and
income protection incurred claims treaties with Swiss
Re to support CLAL’s Asset Concentration Risk Charge
under APRA’s regulations.
Off balance sheet items – ESP loans
In accordance with the provisions of the ESP, as at
30 June 2024, key management, members of the
senior management team have acquired 6,109,927 (30
June 2023: 16,633,432) ordinary shares.
Shares granted under the ESP carry rights to
dividends and voting rights. Financial assistance
amounting to $4,965,282 (30 June 2023: $11,765,742)
was made available to these participants to fund
the acquisition of shares under the ESP, of which
$2,153,886 (30 June 2023: $9,040,738) is held as an
off balance sheet receivable. Given the non-recourse
nature of the loans and the current CVW share
price, some of the off balance sheet loan may not be
recoverable as at 30 June 2024.
Operational event loans to EQT
Aligned to the transition of trustee of the CRP from
CLN to ETSL, CWL has entered into arrangements
with EQT to provide funding reflective of the ORFR to
EQT for an amount of $3.5 million, until the successor
fund transfer of the CRP is completed. Under the
terms of the agreement, if an operational risk events
occur, CWL will be required to provide an operational
event loan up to $1.5 million to EQT and CWL will
release and forgive obligations of EQT to repay this
loan.
Other
The Company has guaranteed the obligations of one
of its subsidiaries in respect of employee entitlements
of employees who were previously employed by MBF
Holding Pty Limited (Bupa Australia).
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.
The Group has elected not to recognise a right-of-use
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 expensed to profit or loss as incurred.
Right-of-use assets
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 of costs expected to be incurred for
dismantling and removing the underlying asset, and
restoring the site or asset.
Right-of-use assets are depreciated on a straight-
line basis over the lease term or the estimated useful
life of the 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 estimated useful life. Right- of-
use assets are subject to impairment or adjusted for
any remeasurement of lease liabilities.
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.
Notes to the Financial Statements
ClearView Wealth Limited
173
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:
Consolidated
Company
2024
2023
2024
2023
$'000
$'000
$'000
$'000
Right-of-use assets
Buildings
4,879
7,804
—
—
Equipment
—
35
Total
4,879
7,839
—
—
Lease liabilities
Buildings
5,577
8,562
—
—
Equipment
—
36
—
—
Total
5,577
8,598
—
—
Amounts recognised in the statement of profit or loss
The statement of profit or loss shows the following amounts relating to leases:
Consolidated
Company
2024
2023
2024
2023
$'000
$'000
$'000
$'000
Depreciation of right-of-use assets
2,993
2,995
—
—
Interest expense
143
181
—
—
Additions during the financial year
The impact of initial recognition of new leases is as follows:
Consolidated
Company
2024
2023
2024
2023
$'000
$'000
$'000
$'000
Balance Sheet
Assets
Right of use asset
—
441
—
—
Total
—
441
—
—
Liabilities
Lease liability
—
426
—
—
Total
—
426
—
—
No new leases were recognised during FY24.
Notes to the Financial Statements
174
ClearView Annual Report 2024
9.4 Capital commitments
ClearView has committed to technology projects and service agreements to a value of $15.8 million. This
predominantly relates to the implementation and ongoing costs of a new integrated policy administration
system (PAS) and underwriting rules engine (URE) ($13.1 million). Other commitments of $2.7 million include the
infrastructure as a service agreement (service fees) and the implementation and ongoing costs of the AASB 17
sub-ledger solution. The following table outlines the expected cashflows in relation to those commitments.
Consolidated
Year 1
Year 2
Year 3
Total
$'000
$'000
$'000
$'000
PAS/URE
10,395
2,043
692
13,130
Other commitments
1,767
783
135
2,685
Total
12,162
2,826
827
15,815
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
The guarantees are supported by collateral (in the form of the shares) of the entities.
9.6 New accounting standards
New and amended Australian Accounting Standards and Interpretations affecting amounts reported
and/ or disclosures in the financial statements
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 is the year ended 30 June
2024, with the restated comparative period ended 30 June 2023. Refer to section 5 for the accounting policy
information.
Notes to the Financial Statements
ClearView Wealth Limited
175
The effects of adopting AASB 17 on the retained earnings as at 1 July 2022 are $83.6 million. A breakdown of the
impact on transition is reflected in the Balance Sheet reported below:
AASB 1038
Derecogni-
tion
Reclassifica-
tion
AASB 17
recognition
AASB 17
1 July 2022
$'000
$'000
$'000
$'000
$'000
Assets
Assets
Cash and cash equivalents
150,735
—
—
—
150,735
Cash and cash equivalents
Investments
2,289,624
—
—
—
2,289,624
Investments
Receivables1
35,003
—
(7,701)
—
27,302
Receivables
Fixed interest deposits
2,897
—
—
—
2,897
Fixed interest deposits
—
—
—
124,674
124,674
Insurance contract assets
Reinsurers’ share of life
insurance policy liabilities4
26,367
(26,367)
(28,977)
138,157
109,180
Reinsurance contract assets
Deferred tax asset5
11,915
—
—
35,851
47,766
Deferred tax asset
Property, plant and equipment
468
—
—
—
468
Property, plant and equipment
Right-of-use assets
10,456
—
—
—
10,456
Right-of-use assets
Investment in associate
13,734
—
—
—
13,734
Investment in associate
Goodwill
12,511
—
—
—
12,511
Goodwill
Intangible assets
17,368
—
—
—
17,368
Intangible assets
Total assets
2,571,078
(26,367)
(36,678)
298,682
2,806,715 Total assets
Liabilities
Liabilities
Payables2
50,297
—
(29,174)
—
21,123
Payables
Current tax liabilities
1,425
—
—
—
1,425
Current tax liabilities
Provisions3
6,321
—
(202)
—
6,119
Provisions
Lease liabilities
11,160
—
—
—
11,160
Lease liabilities
Life insurance policy liabilities4
(10,676)
10,676
(7,302)
327,214
319,912
Insurance contract liabilities
—
—
—
18,078
18,078
Reinsurance contract liabilities
Life investment contract
liabilities
1,295,378
—
—
—
1,295,378
Life investment contract liabilities
Liability to non-controlling
interest in controlled unit trusts
645,612
—
—
—
645,612
Liability to non-controlling interest
in controlled unit trusts
Deferred tax liabilities
606
—
—
—
606
Deferred tax liabilities
Borrowings
16,000
—
—
16,000
Borrowings
Subordinated debt
73,857
—
—
—
73,857
Subordinated debt
Total liabilities
2,089,980
10,676
(36,678)
345,292
2,409,270 Total liabilities
Net assets
481,098
(37,043)
—
(46,610)
397,445 Net assets
Equity
Equity
Issued capital
466,655
—
—
—
466,655
Issued capital
Retained earnings
7,881
(37,043)
—
(46,610)
(75,772)
Retained losses
Share based payments reserve
6,562
—
—
—
6,562
Share based payments reserve
Total equity
481,098
(37,043)
—
(46,610)
397,445 Total equity
1
The reclassification of receivables relate to premium receivable balances, now a part of insurance contract assets and liabilities, remeasured in
accordance with AASB 17 requirements.
2
The reclassification of payables relate to reinsurance premium payable balances and commission payable balances, now a part of (re)insurance
contract assets and liabilities, remeasured in accordance with AASB 17 requirements.
3 The reclassification of provisions relate to provision for reinsurance recoveries, now a part of reinsurance contract assets and liabilities,
remeasured in accordance with AASB 17 requirements.
4 Reinsurers’ share of life insurance policy liabilities and life insurance policy liabilities are derecognised and replaced by reinsurance and
insurance contract assets and liabilities, remeasured in accordance with AASB 17 requirements.
5
The recognition of deferred tax assets relates to the tax impact of restatement of retained earnings.
Notes to the Financial Statements
176
ClearView Annual Report 2024
New and amended Australian Accounting
Standards and Interpretations on issue but not
yet effective
The new and amended standards and interpretations
that are issued, but not yet effective, up to the date
of issuance of the Group’s financial statements are
disclosed below. The Group intends to adopt these
new and amended standards and interpretations, if
applicable, when they become effective.
AASB 18 Presentation and Disclosure in
Financial Statements
In June 2024, the AASB has issued AASB 18
Presentation and Disclosure in Financial Statements
(AASB 18) to improve how entities communicate
in their financial statements, with a particular focus
on information about financial performance in the
statement of profit or loss.
The key presentation and disclosure requirements
established by AASB 18 are:
• the presentation of newly defined subtotals in the
statement of profit or loss;
• the disclosure of management-defined
performance measures; and
• enhanced requirements for grouping information
(i.e. aggregation and disaggregation).
These new requirements will enable investors and
other financial statement users to make more informed
decisions, including better allocations of capital, that
will contribute to long-term financial stability.
AASB 18 will replace AASB 101 Presentation of
Financial Statements and become effective for
reporting periods beginning on or after 1 January
2027.
The Group is currently assessing the impact of AASB
18 on the financial statements.
9.7
Subsequent events
FY24 Final Dividend
A final fully franked FY24 cash dividend of 1.7 cents
per share or $11.1 million has been declared subsequent
to year end. This brings the total dividends paid in
respect of FY24 to 3.2 cents per share, comparing
with dividends of 3.0 cents per share for FY23. The
FY24 payout ratio is 60% of Underlying NPAT – at the
top end of the target payout ratio. The DRP has been
reinstated and will operate for the FY24 final dividend.
FY24 Dividend from ClearView Life Assurance
Limited
A dividend of $17.5 million was declared to be paid
from ClearView Life Assurance Limited (CLAL) to its
parent entity, ClearView Group Holdings Pty Limited
(CGHPL) on 20 August 2024. Subsequently, a dividend
of $17.5 million was declared to be paid from CGHPL
to its parent entity, ClearView Wealth Limited (CWL),
part of which will be used to fund the cash component
of the FY24 final dividend.
ClearView Wealth Limited
177
Consolidated entity disclosure statement
As at 30 June 2024
Name of entity
Type of
entity
Body corporate
country of
incorporation
Body corporate
% of share
capital held
Country of
tax residence
ClearView Group Holdings Pty Limited (CGHPL)
Body
corporate
Australia
100
Australia
ClearView Life Assurance Limited (CLAL)
Body
corporate
Australia
100
Australia
ClearView Life Nominees Pty Limited (CLN)
Body
corporate
Australia
100
Australia
ClearView Administration Services Pty Limited
(CASPL)
Body
corporate
Australia
100
Australia
ClearView Employee Share Trust (CVEST)
Trust
N/A
N/A
Australia
CVW Index Fixed Interest Fund
N/A
N/A
N/A
Australia
CVW Schroder Equity Opportunities Fund
N/A
N/A
N/A
Australia
CVW Fixed Interest Fund
N/A
N/A
N/A
Australia
CVW Index International Shares Fund
N/A
N/A
N/A
Australia
CVW Money Market Fund
N/A
N/A
N/A
Australia
CVW First Sentier Investors Infrastructure Fund
N/A
N/A
N/A
Australia
CVW Antipodes Global Fund
N/A
N/A
N/A
Australia
CVW Hyperion Australian Shares Fund
N/A
N/A
N/A
Australia
CVW Index Infrastructure and Property Fund
N/A
N/A
N/A
Australia
CVW Index Emerging Markets Fund
N/A
N/A
N/A
Australia
CVW Index Australian Shares Fund
N/A
N/A
N/A
Australia
CVW Aoris International SRI Fund
N/A
N/A
N/A
Australia
CVW Fairlight Global Fund
N/A
N/A
N/A
Australia
178
ClearView Annual Report 2024
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;
d) The consolidated entity disclosure statement
required by section 295(3A) of the Corporations
Act 2001 is true and correct; and
e) 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
21 August 2024
ClearView Wealth Limited
179
Independent Auditor’s Report
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
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 2024;
•
The Group consolidated and Company statements of profit or loss and other comprehensive
income, statements of changes in equity and statements of cash flows for the year then
ended;
•
Notes to the financial statements, including material accounting policy information;
•
The consolidated entity disclosure statement; 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 2024
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.
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A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
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.
Initial Application of AASB 17
Financial report reference: Note 9.6
Why significant to the audit
How our audit addressed the key audit matter
Effective 1 July 2023, the Group transitioned
to the new accounting standard AASB 17
Insurance Contracts which replaced AASB
1038 Life Insurance Contracts.
The Group has evaluated the requirements of
AASB 17 Insurance Contracts and exercised
significant judgement to develop accounting
policies and determine appropriate
methodologies in order to comply with the
requirements of AASB 17 Insurance Contracts.
In particular, the determination of the
measurement models to apply under the
standard, the transition approaches adopted,
the determination of coverage units for
contractual service margin release, risk
adjustment, computation of loss component on
onerous contracts and the determination of the
discount rates.
The standard also has an impact on the
disclosures in the notes to the financial
statements.
Accordingly, we have identified the initial
application as a key audit matter.
Our audit procedures included the following (and
where appropriate, we involved our life insurance
actuarial specialists):
•
Assessed the significant judgements to
determine the relevant accounting policies
against the requirements of AASB 17
Insurance Contracts. This included
judgements used to determine the
measurement models to apply, the transition
approaches adopted, coverage units for
contractual service margin release, risk
adjustment, identification of onerous
contracts and discount rates used.
•
Evaluated the application of the
measurement model for insurance contracts.
This included assessing the derivation and
application of underlying significant
assumptions used to derive the fulfilment
cash flows, assessing the resulting fulfilment
cash flows and assessing the related
contractual service margin.
•
Evaluated the appropriateness of the
methodology used by management to
determine the risk adjustment and assessed
the application of this methodology to derive
the risk adjustment.
ClearView Wealth Limited
181
A member firm of Ernst & Young Global Limited
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Page 3
Why significant to the audit
How our audit addressed the key audit matter
•
Evaluated the appropriateness of the
methodology used by management to
calculate the loss component on onerous
contracts and assessed the application of this
methodology to derive the loss component.
•
Assessed the adequacy of the financial
statement disclosures related to transition
included in the Notes in accordance with the
requirements of AASB 17 Insurance
Contracts.
2.
Insurance and Reinsurance Contract Assets and Liabilities
Financial report reference: Note 5
Why significant to the audit
How our audit addressed the key audit matter
The valuation methodology to estimate the
Insurance and Reinsurance Contract Assets and
Liabilities adopted by the Group involves
complex and subjective judgments about future
events. As at 30 June 2024:
•
Insurance Contract Assets total $122.6
million
•
Insurance Contract Liabilities total $460.0
million
•
Reinsurance Contract Assets total $189.5
million
•
Reinsurance Contract Liabilities total $10.0
million
Included within Insurance Contract Assets and
Liabilities is $280.8 million of Asset for
Insurance Acquisition Cashflows.
Key assumptions used in the Group’s model to
determine the value of the Insurance and
Reinsurance Contract Assets and Liabilities
include:
•
Interest rates
•
Mortality and morbidity
•
Lapses
Our audit procedures included the following:
•
Assessed the Group’s governance process
and relevant controls to determine the
methodology and assumptions.
•
Assessed the effectiveness of relevant
controls over assumptions and policy
information used as inputs into the Group’s
valuation models.
•
Evaluated 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.
•
Analysed earnings for the period to assess
any large experience gains/losses and
evaluated any material unexplained items.
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A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Page 4
Why significant to the audit
How our audit addressed the key audit matter
•
Expenses (those directly attributable to
policy maintenance)
•
Gross insurance premium rate
•
Reinsurance premium rate
These assumptions, along with policy
information, are used as inputs to the Group’s
model to calculate the Insurance and
Reinsurance Contract Assets and Liabilities.
This is a key audit matter due to the value of the
balance relative to total assets and liabilities and
the degree of judgement and estimation
uncertainty associated with the valuation.
•
Assessed the model, methodology and
assumptions used to test the Asset for
Insurance Acquisition Cashflows for
impairment.
•
Assessed the risk adjustment methodology
and inputs.
•
Assessed the movements in the CSM and
Fulfilment Cashflows.
•
Assessed the impact of changes in
economic assumption on Insurance and
Reinsurance Contract Assets and 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 Insurance
and Reinsurance Contract Assets and Liabilities.
We assessed the adequacy of the disclosures
included in the Notes to the financial
statements.
3.
Intangible Capitalisation and Recoverability
Financial report reference: Note 4.1
Why significant to the audit
How our audit addressed the key audit matter
As at 30 June 2024 the Group’s Intangible Asset
balance totalled $31.7 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 the
requirements of AASB 138 Intangible
Assets; and
•
Assess the useful life of Information
Technology assets.
Our audit procedures included the following:
•
Obtained an understanding of the relevant
processes and controls relating to
capitalised costs.
•
Assessed amounts capitalised for significant
projects against the capitalisation
requirements of AASB 138 Intangible
Assets.
•
Assessed the Group’s assessment of
indicators of impairment in accordance with
the requirements of AASB 136 Impairment
of Assets.
•
Assessed the appropriateness of the useful
lives applied to the IT assets.
ClearView Wealth Limited
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A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Page 5
Why significant to the audit
How our audit addressed the key audit matter
We assessed the adequacy of the disclosures
included in the Notes to the financial
statements.
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 2024 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:
a)
The financial report (other than the consolidated entity disclosure statement) that gives a true
and fair view in accordance with Australian Accounting Standards and the Corporations Act
2001; and
b)
The consolidated entity disclosure statement that is true and correct in accordance with the
Corporations Act 2001; and
for such internal control as the directors determine is necessary to enable the preparation of:
i.
The financial report (other than the consolidated entity disclosure statement) that gives a true
and fair view and is free from material misstatement, whether due to fraud or error; and
ii.
The consolidated entity disclosure statement that is true and correct and is free of 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
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ClearView Annual Report 2024
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Page 6
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.
•
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.
ClearView Wealth Limited
185
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Page 7
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 53 to 75 of the directors’ report for the
year ended 30 June 2024.
In our opinion, the Remuneration Report of ClearView Wealth Limited for the year ended 30 June
2024, 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.
Ernst & Young
Louise Burns
Partner
Sydney
21 August 2024
186
ClearView Annual Report 2024
Shareholders’ and Note holders’
Information
As at 7 August 2024
Shareholders’ information disclosed below include ordinary issued shares as well as shares issued under the ESP
as at 7 August 2024.
Substantial shareholding information
Substantial shareholders
No. of shares
% of issued
capital
CCP Bidco Pty Ltd and Associates1
326,429,614
50.14
Perpetual Corporate Trust Limited1
193,676,389
29.75
Sony Life Insurance Co., Ltd2
101,254,639
15.55
Investors Mutual Limited
38,749,667
5.91
1
Crescent Capital Partners Management Pty Limited (Crescent) represent the interests of CCP Bidco Pty Limited (CCP Bidco) and Perpetual
Corporate Trust Limited (Perpetual) as manager. Perpetual’s shareholding percentage is therefore included in the 50.14% holding of CCP Bidco
in the table above.
2
Sony Life Insurance Co., Ltd’s (Sony Life) shareholding is held under the Option Agreement signed with Crescent and therefore is also included
in the 50.14% holding of CCP Bidco in the table above.
Twenty largest shareholders
Shareholders
No. of shares
% of issued
capital
CITICORP NOMINEES PTY LIMITED
172,158,041
26.44
PERPETUAL CORPORATE TRUST LIMITED
40,631,270
6.24
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
33,068,901
5.08
CCP BIDCO PTY LIMITED
31,498,586
4.84
CCP TRUSCO 5 PTY LIMITED
28,801,459
4.42
CCP TRUSCO 1 PTY LIMITED
26,531,616
4.08
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
22,698,232
3.49
CCP TRUSCO 3 PTY LIMITED
15,160,922
2.33
CCP TRUSCO 2 PTY LIMITED
12,634,102
1.94
UBS NOMINEES PTY LTD
11,315,498
1.74
WINTOL PTY LTD
10,927,624
1.68
PORTFOLIO SERVICES PTY LTD
10,304,057
1.58
PORTFOLIO SERVICES PTY LTD
7,548,665
1.16
PERPETUAL TRUSTEE COMPANY LTD
7,500,000
1.15
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
7,151,074
1.10
TAMIM INVESTMENTS PTY LIMITED
6,502,030
1.00
WINTOL PTY LTD
6,302,827
0.97
ABN AMRO CLEARING SYDNEY NOMINEES PTY LTD
5,550,000
0.85
Ordinary share capital
There are 651,015,143 fully paid ordinary shares held by 1,961 shareholders (including 6,109,927 ESP shares held by
13 participants). All the shares carry one vote per share.
ClearView Wealth Limited
187
Distribution of shareholders
The distribution of shareholders is as follows:
Range
Total holders
Units
% of issued
capital
1 - 1,000
305
97,028
0.01
1,001 - 5,000
394
1,115,519
0.17
5,001 - 10,000
267
2,061,207
0.32
10,001 - 100,000
773
31,596,306
4.85
100,001 and over
222
616,145,083
94.65
Total
1,961
651,015,143
100.00
Unmarketable parcels
Minimum parcel
size
Holders
Units
Minimum $ 500.00 parcel at $ 0.5700 per unit
878
266
59,091
Shares under voluntary escrow
There are no shares subject to voluntary escrow as at 30 June 2024.
Subordinated Notes information
Note Holders
No. of issued
Notes1
% of issued
Notes
BELL POTTER NOMINEES LIMITED
150
2.00
CITIGROUP PTY LIMITED O A CITICORP NOMINEES PTY LTD
199
2.65
J.P. MORGAN NOMINEES AUSTRALIA LIMITED
1,650
22.00
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
5,501
73.35
Total
7,500
100.00
1
Based on the face value of $10,000 per Note.
Share rights
As at 7 August 2024, there were 2,507,058 STVR Restricted Rights held by 11 participants, and 9,214,337
Performance Rights held by 11 participants. Details of the ClearView STVR and LTVR plans are set out in the
Remuneration Report.
188
ClearView Annual Report 2024
Directory
Current Directors
Geoff Black (Chairman)
Michael Alscher
Gary Burg
Edward Fabrizio
Jennifer Lyon
Nathanial Thomson
Managing Director
Nadine Gooderick
Company Secretary
Judilyn Beaumont
Appointed Actuary
Ashutosh Bhalerao
Chief Risk Officer
Cloe Reece
Registered Office and Contact
Details
Level 15, 20 Bond Street
Sydney NSW 2000
GPO Box 4232
Sydney NSW 2001
Telephone: +61 2 8095 1300
Email: companysecretariat@clearview.com.au
Website: clearview.com.au
Share Registry
For all enquiries relating to shareholdings, dividends
and related matters, please contact the share registry:
Computershare Investor Services Pty Limited
Usual address:
Level 3, 60 Carrington Street
Sydney NSW 2000
Temporary address:
6 Hope Street
Ermington NSW 2115
GPO Box 2975
Melbourne VIC 3001
Telephone:
1300 850 505
+61 3 9415 4000
Facsimile: +61 3 9473 2500
www.computershare.com.au
Auditors
Ernst & Young
Stock Listing
ClearView Wealth Limited is listed on the Australian
Securities Exchange (ASX) under the ASX code ‘CVW’.
Annual Corporate Governance
Statement
The ClearView Annual Corporate Governance
Statement may be viewed at clearview.com.au/
governance.
ClearView Wealth Limited
ABN 83 106 248 248
GPO Box 4232
Sydney NSW 2001
T 132 979
clearview.com.au
ASX code CVW
CVCO_0042 08/24