ClearView says its retail life business will likely see an “increase in claims and lapses in the months ahead” due to business uncertainties caused by the virus outbreak.

“Claims experience has continued to reflect recent adverse trends,” the business says in an investor update, adding it has “increased its income protection premiums” for renewals from April 22 in response to the situation.

“It is too early to assess future experience and reaction to the rate changes in the current environment,” ClearView says.

Like many in the industry, ClearView says it is not able to provide an earnings guidance for this financial year, citing the “fluidity” of the virus pandemic and its impact on the operating environment.

It says there has been an increase in requests for premium waivers, but no observed material changes to new business applications, new business volumes and collections of premiums.

A stress test taking into account three possible scenarios, including a severe COVID-19 case projection, indicates ClearView has a resilient regulatory capital position to withstand a range of virus-triggered potential impacts over the next two years.

“Profitability can be very sensitive within each scenario, in particular to claims and lapse assumptions,” the company says. “These will continue to be closely monitored and potential actions in response have been developed and are being considered – for example, expense reductions – but are not allowed for in the projections.”

The business is in ongoing talks with Swiss Re over the management of any counter-party concentration risk. Its life solutions product range is heavily reinsured with the Swiss reinsurance giant.

It says a $45m letter of credit is currently held to protect part of the income protection claims recoveries whilst an incurred claims treaty is in place to protect reinsurance recoveries for lump sum claims.

The company has also announced that independent non-executive director Geoff Black has been named to replace Chairman Bruce Edwards, who has indicated he intends to retire at the end of this financial year.