I would now like to hand the conference over to Nadine Gooderick. Please go ahead.
Thank you for joining ClearView's half year 2026 results briefing. I'm here today with Athol Chiert, ClearView's Chief Financial Officer. In a moment, Athol will take you through the results in more detail. First I will provide details of our recent market announcement, followed by an overview and strategic update. There will be an opportunity to ask questions at the end. As announced earlier this week, ClearView has entered into a Scheme Implementation Deed with Zurich, under which Zurich has agreed to acquire 100% of the ordinary shares on issue in the company by way of a scheme of arrangement. Under the terms of the scheme, shareholders will receive a cash consideration of AUD 0.65 per each share held on the record date for the scheme.
The scheme in consideration may be adjusted in certain circumstances, in accordance with the Scheme Implementation Deed, including in relation to any permitted dividends declared or paid prior to implementation of the scheme and any ticking fee payable if the effective date of the scheme is delayed beyond a specified date. The implementation of the scheme is subject to a number of conditions, including approval by the requisite majorities of shareholders at a meeting, approval of the court, regulatory approvals, and other customary conditions precedent for a transaction of this nature. ClearView's board of directors unanimously recommends that shareholders vote in favor of this scheme, subject to a superior proposal emerging and subject to an independent expert concluding the scheme is in the best interest of shareholders.
Our largest shareholder, Crescent Capital Partners, who holds or is able to control the voting rights attached to 53% of the ClearView shares, also intends to vote in favor of the scheme. The cash offer represents a circa 21.5% premium to the last closing share price before the scheme was announced and represents a book value multiple of 1.2x. For shareholders eligible to utilize franking credits, the total value of Zurich's proposal may be up to AUD 0.67 per share if the full AUD 0.05 per share permitted dividend is paid before any ticking fee is applied. The scheme meeting is subject to the timing of regulatory approvals. However, we currently anticipate this to be held in the second half of this calendar year. Further updates will be provided to shareholders in due course through the publication of a scheme booklet.
We therefore ask today that questions are focused on the results. Turning to the half year results, it reflects the strong business performance and growth that is being driven by the successful execution of our simplification and transformation strategy. Group underlying NPAT from continuing operations for the half year period increased 77% to AUD 22.1 million, and fully diluted underlying EPS increased 84% to AUD 0.035 per share. Life insurance underlying NPAT for the half year period increased 59% to AUD 24.1 million at an underlying margin of 11.2%. That is within the target range of 11%-12%.
The group has undertaken certain strategic initiatives during the half year period that contributed to the strong financial result, including completion of the migration of the closed product in-force portfolios onto the new IFA platform, expanding our distribution footprint, focus on cost control and achievement of e-efficiencies underpinned by a prudent capital position and capital management initiatives. ClearView continues to perform as a successful challenger brand in the IFA market and has a strong presence and reputation in the market. It has a robust track record of top-line growth, with its rolling 12-month new business market share remaining broadly stable in the range of 10%-11%. The overall IFA new business market has continued to grow at circa 12.2% year-on-year to circa AUD 356 million of new sales.
ClearView achieved new business sales of AUD 21 million over the half year, a 29% uplift from the prior corresponding period. In the fourth quarter of 2025, ClearView achieved sales of AUD 11.4 million, representing a circa 12% market share for the December quarter. ClearView's in-force market share has also continued to grow, increasing to above 4% in the half year period. Over the past several years, ClearView has undertaken a significant transformation to simplify our business, strengthen our operating model, and build the foundations for sustainable long-term growth. I'm pleased to share that this program is now complete. Over the last 12 months, we have exited the wealth management business and finalized the migration of all closed products onto our modern core life insurance platform. This marks an important milestone.
It means that every product we offer is now administered on a single cloud-based platform, eliminating complexity, reducing system duplication, and enabling us to operate with far greater efficiency and agility. This technology investment has fundamentally reshaped the way we run our business. With a unified platform, we can scale more efficiently, innovate faster, and respond to customer needs with greater speed and clarity. Our next phase of evolution builds on this foundation. We are now implementing a new front-end digital experience, targeting seamless integration with our core insurance platform. The first release of this is on track for the second half of FY 2026. When complete, our technology stack will deliver a modern end-to-end digital ecosystem that supports multi-channel growth, embeds new digital capabilities, and provides both customers and advisors with a more intuitive, streamlined experience.
It will also deliver a single holistic view of the customer, driving further improvements in service, decision-making, and operational efficiency. In contrast to many incumbents hampered by legacy systems, ClearView's cloud-based architecture, automation capability, and data-driven design give us a meaningful competitive advantage. These enhancements position ClearView as a technology-led, efficiency-driven, pure-play life insurer, well-placed to capture growth opportunities in a changing Australian life insurance market. With that, I'll hand over to Athol to take you through the results in more detail.
Thanks, Nadine. The half year result reflects the progressive benefits following the successful delivery of our simplification and transformation strategy. The business has achieved a 20% compound growth rate in group underlying NPAT, from AUD 12.7 million in the first half of FY 2023 to AUD 22.1 million in the first half of FY 2026. Key highlights from the half year results include: the group underlying NPAT, that is up 77%; fully diluted underlying earnings per share increased 84% to AUD 0.035 per share; life insurance underlying NPAT is up 59%; the life insurance underlying NPAT margin is 11.2%. There's a continued strong track record of top-line growth, with both gross premium income and in-force premium up 13%.
ClearChoice, our flagship product, grew by 45%, with its in-force premiums now at AUD 135 million, or circa 30% of the overall in-force. Our technology-led investment and business simplification has also started driving improvement in the cost-to-income ratio, which has reduced from 19.6% to 17.9%. The business is in a surplus capital position of AUD 11.3 million. Lastly, the embedded value, excluding franking credits, is in the range of AUD 0.78-AUD 0.88 per share at a discount rate range of 7.5%-9.5%. The claims experience relative to the assumptions adopted in the half year period continued to be broadly in line with expectations, with a gross claims loss ratio of 51%, aligned with the long-term average of 52%.
Overall, in the half year period, the portfolio reported an underlying claims experience loss relative to the assumptions adopted of AUD 0.5 million after tax. There was positive claims experience in the half year period on the advanced lump sum products, including positive TPD clearance, that was offset by the adverse experience on the advanced income protection and the non-advanced products. The long-term actuarial assumptions for both income protection and TPD claims on the closed LifeSolutions portfolio will further strengthen in FY 2025. TPD claims experience continues to be closely monitored, aligned to the broader adverse industry experience. ClearView continues to closely monitor the overall claims experience as part of its normal business processes and annual actuarial experience studies that are completed each year.
ClearView lapse rates have increased in the half year period, aligned to the cost of living pressures and the repricing of the LifeSolutions product. The lapse assumptions include an overlay for the price changes and continue to be closely monitored. The current phase of the repricing cycle of the LifeSolutions portfolio was completed on the 1st of February 2026. ClearView's target market and the funding of premiums from superannuation are risk mitigants of affordability concerns, whilst retention strategies remain in place. ClearView has net assets of AUD 348.4 million, or AUD 0.559 per share.
The surplus capital position of AUD 11.3 million was impacted in the half year by the $10.3 million on-market share buyback program in lieu of an interim dividend, as well as the IT transformation and Tier 2 overlap costs incurred of $7.3 million, which are both expected to cease from the end of this financial year. I'll now hand back to Nadine to discuss the capital management and outlook for the business before opening for questions.
Thank you, Athol Chiert. I'd now like to provide an update on capital management matters. The board ordinarily seeks to pay dividends at sustainable levels, with a target payout ratio of between 40% and 60% of group underlying NPAT from continuing operations. The dividend policy remains unchanged and has been set, taking into consideration regulatory requirements and available capital within the group. In FY 2025, given the prevailing share price, the board considered that the best use of surplus capital was to conduct share buyback in lieu of an FY 2025 dividend. The on-market buyback program was announced on the 10th of March 2025, with AUD 5.4 million worth of shares being purchased over the period to the 30th of June 2025, equating to circa AUD 0.008 per share.
The share buyback program resumed immediately after the FY 2025 annual results were released, with the board continuing to consider that the best use of surplus capital was to conduct a share buyback in lieu of a first half 2026 interim dividend. In the half year period, a further AUD 10.3 million worth of shares were purchased over the period to the 31st of December, 2025, equating to circa AUD 0.017 per share, or 47% of the first half 2026 group underlying NPAT of AUD 22.1 million. As I noted at the start, ClearView has entered into a Scheme Implementation Deed with Zurich for it to acquire 100% of the ordinary shares in ClearView by way of a scheme of arrangement.
Under the scheme implementation deed, ClearView is permitted to pay dividends of up to an aggregate amount of AUD 0.005 per share prior to implementation of the scheme, noting that any permitted dividend paid will reduce the scheme consideration by the cash amount per share of that dividend, but not the value of any franking credits attached. Subject to the scheme becoming effective, the board currently intends to determine to pay a fully franked special dividend of up to the maximum amount permitted under the scheme implementation deed, to be paid prior to implementation of the scheme. The amount of any special dividend will depend on, among other things, implementation of the scheme and the availability of franking credits at the relevant time.
The determination of payment of any permitted dividend, including the amount and extent to which it is franked, remains at the discretion of the board, and there is no certainty that any such dividend will be paid prior to implementation of the scheme. ClearView will continue to update shareholders as appropriate. In the meantime, and until such time the scheme is implemented, ClearView continues to operate as an independent business. Our focus remains firmly on delivering strong performance, supporting our customers and advisors, and meeting all regulatory and contractual obligations. Importantly, there is no immediate impact on customers, policyholders, financial advisors, or business partners. It is business as usual. Products, policies, claims processes, service arrangements, and advisor relationships will remain unchanged.
Our FY 2026 guidance also remains consistent with what we have previously communicated to the market, including: gross premium income in the range of AUD 435 million-AUD 440 million in FY 2026. FY 2026 life insurance underlying NPAT margin in the range of 11%-12%. FY 2026 life insurance underlying NPAT in the range of AUD 47 million-AUD 52 million. FY 2026 group underlying NPAT in the range of AUD 42 million-AUD 47 million. As always, the key risks to achieving this guidance include claims experience, the execution of technology programs and related efficiencies, lapse outcomes, and interest rate movements. ClearView's ambition remains unchanged: to be the best at life insurance.
In the near term, our priorities are to continue growing our share of the retail market and to complete the front end of our technology stack, laying the final foundation for multi-channel expansion and accelerated growth. Our purpose remains clear, to make life insurance more accessible for Australians and their families at a lower cost to serve, driven by a streamlined business and technology model. The ex-executive leadership team and myself remain fully committed to this purpose and continuing to drive the growth going forward. I will now hand over to the operator to open the line for questions. Thank you.
Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you're on a speakerphone, please pick up the handset to ask your question. The first question comes from Michael Trott with MST Financial. Please go ahead.
Hi, guys. Thanks for the opportunity to ask a question. I guess slightly a bittersweet update given how strong the result was today and the fact that you guys are, I guess, now departing or moving into the Zurich business. Largely because we're not allowed to focus on that, I just wanted to touch upon, I guess, the repricing that you commenced last year and just how far along the percentage of the book transition has come across there. I guess what you're expecting or what you're baking into your guidance for the coming half, based on this repricing within LifeSolutions.
Thanks. Appreciate that. From a repricing perspective, the 12-month cycle ends on the 1st of February, 2026, so that's predominantly through the half year result with price changes to come through January. That would be baked into the AUD 435-AUD 440 guidance around the gross premium income.
Cool, thank you. Just with the claims experience that you guys have been seeing, I guess wanting to understand then as well for how it's going in the current quarter, what it looks like across each of the products, and then again, like what you're kind of expecting based on the run rate you've had for this current half so far, moving into, I guess, the rest of the future months coming forward?
Well, I mean, I think I'll just stick to the half year and what happened over that period. I think the claims experience is broadly in line with the expectation and tracking to plan. Overall, relative to the assumptions adopted at 30 June 2025 or our expected claims, we had a circa half a million dollar claims loss. Effectively, we had profits on our advice book or portfolio. A small loss on the non-advice or historical, that sort of can have a little bit of volatility. Income protection, the number of claims was higher, but at the same time, the terminations or the closure of claims was good. Overall, it's within our expectation and, you know, it's probably pretty early on in the first quarter.
We don't look at claims month to month, as we sort of try to communicate that to the market. Claims over a six-month period is more aligned because it can bounce around month to month.
Great. Just a last one, if I may. Just wanting to gather some insights on, I guess, how the independent expert might be viewing the transaction as well. Not sure if you have any oversight or insight into this, but do you know if they'll be taking, like, an embedded value basis like you guys kind of prescribed or doing, like, a DCF or some of the parts basis when they form their recommendation?
The short answer, it's too early to tell. We need to put in an IR. They'll come up with a report. It'll be part of the scheme booklet. I guess we'll communicate that in due course.
Cool. Thanks, guys, and great update again.
Thanks, Michael.
There are no further phone questions at this time. I'll now hand it back to Nadine Gooderick for closing remarks. Please go ahead.
Okay. Thank you so much for everyone that's joined the call today. Really appreciate it. Thank you.