Strong contributions from its financial advice and wealth management arms have helped ClearView offset adverse impacts from its income protection portfolio, with the company posting a 12 per cent increase in underlying net profit after tax of $30.4 million but a 44 per cent decline in net profit after tax.
The result saw the directors declare a fully franked dividend of 2.75 cents per share.
However, it was the income protection business which took the gloss off ClearView’s overall performance, albeit the company sought to explain that it “reflected the impact of prudent decisions made by the board to support the group’s long-term strategy”.
It said that during the year, income protection (IP) price increases had been introduced to manage margin and improve product profitability which resulted in higher short-term lapses while an enhanced actuarial claim reserving basis was also adopted to strengthen the IP claims reserves “which was a key driver of an adverse claims ‘swing’ of $3 million between periods”.
The company said the IP book remained profitable and the change positioned ClearView for continued growth.
It was the wealth management and financial advice businesses which were the stand-outs for ClearView recording respective net profit after tax increases of 44 per cent and 47 per cent.
The company said the growth in earnings in the financial advice business had been driven by a modest increase in aligned adviser numbers, revenue from new practices, higher conference delegate and sponsorship revenue and disciplined expense management.
“During the year, the number of advisers across Matrix Financial Planning Solutions and ClearView Financial Advice increased by 243 advisers,” it said. “The group’s funds under management and advice amounted to $8.9 billion and premiums under advice reached $236 million of which $70 million is in LifeSolutions.”
The company attributed the growth in wealth management to the group’s widening distribution footprint and top-quartile investment performance which saw funds under management increase 17 per cent to $2.5 billion.
It said the number of dealer groups that currently recommended ClearView’s wealth products had climbed to 30 up from nine the previous financial year as the group leveraged existing life insurance relationships.
