Low investment risk seen for ClearView after asset sale

The Australian insurer sold its investment in Centerpoint Alliance in November 2023.

ClearView Wealth’s is perceived to have a solid performance, strong capitalisation, and focus on its core life insurance business, despite regulatory scrutiny and challenges in the Australian life insurance market, said Fitch Ratings

The insurer’s risky-asset ratio, which garnered 3% in 2023, is forecasted to further dip after the sale of its investment in Centerpoint Alliance last year. ClearView's investments are mostly in high-quality fixed-income securities and cash, contributing to a low investment risk profile.

Fitch regards ClearView's capitalisation as 'very strong,' with high coverage of the regulatory prescribed capital amount. The insurer's financial leverage ratio remains low, supported by Tier 2 subordinated notes.

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The rating agency also ranks ClearView's company profile as 'moderate' compared to other Australian insurers. This assessment considers ClearView's business profile and corporate governance as 'moderate' and 'neutral,' respectively. 

ClearView operates in the retail segment of the Australian life insurance market and has been gaining new business share recently.

The insurer’s recent divestment of its wealth and advice business is expected to support its core life insurance business. ClearView has made significant progress in exiting its non-core businesses, allowing it to concentrate on its life insurance operations.

Its recent performance has been supported by premium growth, favourable claims, and lapse experience. In-force premiums and new business have shown significant increases, with ClearView reporting improvements in net profit from continuing operations.