ClearView decides not to repay JobKeeper

ClearView has decided not to repay JobKeeper after it was pressed by a Parliamentary committee to have its board consider it, given its profit margins.

Last month, Labor’s Dr Andrew Leigh asked ClearViews chief executive, Simon Swanson whether the insurer would repay $2.4 million in JobKeeper after its profits did not tangibly fall during the 2020 calendar year.

In an answer to the question on notice, ClearView said its board had considered repaying JobKeeper after looking at its 2020 calendar year profits as requested by the committee despite it usually reporting on a financial year basis.

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It said its net profit after tax (NPAT) during 2020 declined from $22.1 million to $17.5 million.

“The board has taken these factors into account and the competing risks and benefits, and considers that accessing the JobKeeper entitlement was the right thing to do by policyholders and employees. Given the circumstances outlined above it is not appropriate to repay these funds,” ClearView said.

ClearView said its board considered:

  • The nature of the company’s operations compared to, for example, the high-volume retail businesses raised as examples in the committee hearing. In a life insurance business, a pandemic is considered a critical financial risk and this uncertainty is continuing;
  • The over-riding importance for a life insurer is to protect policyholder interests over the long-term, this requires a sustainable balance between policyholders and shareholders and their respective interests. During COVID-19 ClearView waived premiums of $4.6 million for over 1,700 customers;
  • JobKeeper had a positive impact on employment and business continuity during 2020 and played a role in assisting the company to deal with the ongoing ramifications and uncertainties of the pandemic; and
  • Being a life insurer, profitability was a secondary factor particularly during a pandemic. Capital adequacy is the cornerstone of a life insurance company as it underpinned its ability to pay claims.

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There's probably a lot of financial services businesses that met the COVID relief revenue decline criteria due to the mounting effects of bad regulation, rather than COVID factors alone.

The COVID relief payments have been minor compensation for the business destroying impact of all this bad regulation.

$2.4 million would be less than Simon Swanson's annual earnings. Perhaps Simon could clarify what he earn't in the last year while some staff were being paid jobkeeper? Perhaps a personal cut of Simon's earnings just for one year might have been more appropriate?

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