• Life Insurance Underlying Impact: $15.2 million, down 22%.
• Group Underlying NAT: $12.5 million, down 28%.
• Claims Loss: $6.2 million in the first quarter, considered an outlier.
• Underlying Life Insurance Impact Margin: 8% for the half year, restored to 11% in the second quarter.
• Inforced Premiums: $387.2 million, with market share up to 3.8%.
• Gross Premiums Growth: 8% increase.
• Embedded Value: $525.7 million, up 9.5%.
• New Business Sales: $16.3 million for the half year.
• Net Assets: $362.7 million or $0.01 per share.
• Surplus Capital Position: $7.1 million post capital release from wealth management.
• Embedded Value Per Share: $0.81 excluding franking credits, $0.94 including franking credits.
• FY25 Gross Premiums Guidance: $395 million to $400 million.
• FY26 Gross Premiums Target: Updated to $444 million.
• Share Buyback: Up to 10% of share capital over the next 12 months.

• Warning! GuruFocus has detected 5 Warning Signs with CVWLF.

Release Date: February 26, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• ClearView Wealth Ltd (CVWLF) achieved a gross premium growth of 8% in the half-year period, with enforced premiums reaching $387.2 million.
• The company's market share in the IFA new business market remained stable at 10-11%, with a goal to increase to 12-14% by FY26.
• ClearView Wealth Ltd (CVWLF) is on track with its business simplification and technology transformation program, expected to enhance efficiency and flexibility.
• The company plans a share buyback of up to 10% of share capital over the next 12 months, which is seen as a better use of surplus capital compared to dividends.
• ClearView Wealth Ltd (CVWLF) has a strong presence and reputation in the IFA market, supported by robust advisor relationships and the Clear Choice product.

Negative Points

• ClearView Wealth Ltd (CVWLF) reported a 22% decrease in life insurance underlying impact to $15.2 million and a 28% decrease in group underlying NAT to $12.5 million.
• The company experienced a significant claims loss of $6.2 million in the first quarter, which negatively impacted margins.
• There is an increased trend in lapse rates due to high interest rates and cost of living pressures, affecting retention.
• The wealth management exit is still in progress, with completion expected by the end of the financial year.
• ClearView Wealth Ltd (CVWLF) faces competition in the market, with some competitors engaging in upfront discounting and lowering underwriting standards.

Q & A Highlights

Q: Will all the costs associated with the wealth management business be completed by the end of financial year 2025, or will there be ongoing costs? A: Athol Chiert, Chief Financial Officer, confirmed that all costs, including the decommissioning of systems, will be completed by June 30, 2025.

Q: There was a slight decrease in business volumes in the half. Is this due to competition? A: Nadine Gooderick, Managing Director, explained that the decrease is due to maintaining discipline and focusing on high-quality segments. The company has not participated in upfront discounting or lowering underwriting standards, and plans to drive new business in the second half.

Q: How does ClearView plan to increase the number of advisors selling its products? A: Nadine Gooderick stated that the company is happy with its current mix of advisors and focuses on increasing share within key advisor groups. They are also supporting new, diverse advisor groups, particularly those with a digital focus.

Q: Has the strategy technology transformation slipped into the first half of 2026? A: Nadine Gooderick confirmed that the transformation is on track and was always planned for completion in the first half of 2026. The company is currently in the detailed testing phase.

Q: How does ClearView plan to mitigate the impact of adverse claims in the future? A: Athol Chiert highlighted that claims volatility is part of the business, but historical data shows a stable average claims loss ratio. The company continues to monitor and manage claims closely.

Q: What is the strategy for surplus capital and the share buyback? A: Athol Chiert explained that the board considers a share buyback the best use of surplus capital, given the return it provides to shareholders. The buyback is subject to available surplus capital over a 12-month period.

Q: How much of the Q2 turnaround is due to natural correction versus remediation efforts? A: Nadine Gooderick emphasized that the Q1 claims spike was an outlier. The company has invested in claims management and analytics, and an independent review confirmed the robustness of their processes.

Q: Are there any plans for new product areas or market segments? A: Nadine Gooderick mentioned that while the focus is currently on existing business operations and strategic imperatives, the company is considering future opportunities and will explore them later this year or early next year.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.