ClearView Wealth’s first-quarter earnings were affected by a “material increase” in claims from its legacy income protection and total and permanent disability businesses.

MD Nadine Gooderick says the after-tax claims experience loss of $6.2 million for the three months to September led to a corresponding reduction in profitability.

“This poor claims experience was primarily driven by the total and permanent disability and income protection products within ClearView’s old LifeSolutions portfolio that has been closed to new business since October 1 2021 …  anecdotally, this experience appears to be at an industry level and points towards economic conditions and affordability issues,” she said last week at the life insurer’s annual general meeting.

Ms Gooderick says the updated ClearChoice product range was not affected by the claims issues.

“The front end of the business with ClearChoice, momentum continues to be strong … and we see significant opportunities in the retail advised sector. With the industry and regulatory focus on sustainability of [individual disability income insurance] products, ClearChoice has been specifically designed with significant structural changes to mitigate the risks of volatility and ensure long-term sustainability for customers.”

She says the business is now focused on ensuring its LifeSolutions portfolio is still “priced appropriately”. 

Meanwhile, ClearView Wealth has been asked by the Australian Securities Exchange to answer compliance questions relating to the movement of its share price last Thursday, the day of its AGM.

The life insurer says it is unaware of any information that was not announced to the market that could explain the movement from a high of $0.52 to a low of $0.4125.

ClearView says it provided a trading update that day at its AGM, where shareholders were told about the claims experience and impact on first-quarter results.

Shareholders were also told the insurer has maintained new business momentum and lapse experience, and expense management continues to be within expectation.

ClearView provided another update on Friday telling shareholders who missed the AGM what was discussed.

“It was disclosed that October claims were more normalised and that the company does not consider the elevated claims experience to be a long-term issue,” the update said.

“It was also disclosed that the company does not consider this short-term claims experience to be a reflection of likely full-year results.”