Brought to you by:

ClearView writes down financial advice book, goodwill

Facebook Twitter LinkedIn Google

ClearView is reporting an expected profit of $4 million for this financial year, after a significant writedown in the value of its financial advice client book and a loss of goodwill.

Structural changes to the industry led the insurer to undergo a review of its financial advice business strategy and dealer group pricing model, resulting in a $14.1 million hit to its underlying profit.

A review of its IT strategy cost $6 million, while $3.8 million was spent on implementing a cost-reduction program. Its remediation program has cost it $2.4 million this year.

ClearView is repositioning its life insurance business to capitalise on the big four banks selling off their financial advice businesses.

Its financial advice segment will no longer be included in its embedded value calculations, it says.

Changes in claims assumptions in income protection cost $1.8 million. ClearView also terminated poor-performing life insurance distribution relationships.

It also terminated its information-sharing deal with Sony Life 16 months after it was established, after deciding that it was not in its best interests to continue with the co-operation agreement.

The company says the 2019 financial year has been a “difficult year” for the financial services industry with the impact of the Hayne royal commission, progressively difficult emerging economic conditions, and an increasing consumer and regulator focus on prices.

“ClearView has not been immune to this. All of these have involved substantial costs and management distraction.”