ClearView reports reduced half-year NPAT
Major life insurer, ClearView has reported a 13 per cent decline in first half net profit after tax to $13.3 million which it said was reflective of a challenging market environment including increased market volatility, uncertainty and negative consumer sentiment.
The company’s financial advice business weighed particularly heavily on the bottom line, reporting a 94 per cent decline in net profit after tax, largely driven by compliance and restitution costs.
It said the result was impacted by a negative $5.1 million lapses and claims experience but did not reflect the key strategic priorities that were likely to have a positive longer-term effect on the emergence of sustainable profit growth.
The company’s half-year results announcement to the Australian Securities Exchange said these priorities and actions included the termination of certain distribution relationships that had lapse rates above acceptable norms coupled with a product pricing repositioning of LifeSolutions.
It said that it had also repriced and enhanced its contemporary wealth management products in the face of competitor solutions and recent pricing changes and rebalanced its cost base.
The ClearView announcement said life insurance remained the company’s key profit driver while wealth management had been adversely impacted by subdued flows and poor investment performance, leading to a reduction in fees.
It said that where financial advice was concerned, net profit after tax was down 94 per cent to just $0.1 million which had been impacted by increased operating expenses driven by compliance and restation costs.
It said that, going forward, a key focus would be on the removal of the cross-subsidisation and support from the ClearView manufacturer to dealer groups.
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