Catholic Church Insurance, which entered run-off nearly two years ago, has been winding down its operations and divesting assets in a careful scale-down of the company, its latest annual report says.

The group reported a $51.8 million loss for the year to last June 30, compared with a loss of $286.7 million in the previous period.

The prescribed capital amount coverage ratio was negative 0.21 – compared with positive 0.14 the year before – which is outside the target range that would have applied if the company was not in run-off.

In 2023, CCI policyholders voted in favour of a scheme of arrangement that would be triggered to provide for the “orderly” payment of claims in the event it became insolvent.

“The company [has] not yet triggered the scheme and continues to operate as a going concern,” the report says. “At the date of signing this report, CCI has sufficient capital to continue operations as a run-off entity under the provisions set out in the scheme.” 

CCI sold its “Allianz white label personal insurance portfolio” to Ansvar Insurance for $300,000 on February 9 last year.  

On March 28, it signed a third-party agreement for EML Solutions to become claims manager for the CCI workers’ compensation portfolio, effective last April. CCI maintains the assets and liabilities but pays EML an annual fee for the run-off.

The annual report, received by the Australian Charities and Not-For-Profits Commission on December 18, says CCI was in discussions with the NSW State Insurance Regulatory Authority to ensure the security held by the regulator was sufficient to provide entitlements and support to workers.

SIRA had expressed concern at the adequacy of the liabilities and potential for future deterioration, and had adjusted its security requirement to a 95% probability of adequacy, with the amount increasing to $209.6 million on September 6.

CCI also sold its asset management business to SG Hiscock and Company last year.

Staff numbers were reduced by about 70% “with a clear further plan to complete the closure of the organisation in a timely and efficient manner”, while outstanding claim numbers dropped by more than 75% from June 2023.

Since placing the company into run-off, staff have focused on helping policyholders move their insurance to new providers, chair Joan Fitzpatrick and CEO Tim Farren say. 

“To affect the shift in insurance programs with CCI, policyholders have sought the professional services of brokers and other insurance intermediaries,” they say.  

“CCI staff continue to ensure that all policy-related histories are handed over as part of each transition. This has been a challenging process for many clients who have largely only ever dealt directly with CCI for their insurance needs.”

The annual report is available here.