Thank you for standing by, and welcome to the NobleOak Life Limited HY 2024 financial results presentation. All participants are in a listen-only mode. There will be a presentation followed by a question and answer session. For those on the conference call who wish to ask a question, you will need to press the star key followed by the number one on your telephone keypad. I'd now like to hand the conference over to Mr. Anthony Brown, CEO. Please go ahead. Thank you, and good morning, all. Welcome to NobleOak Life's financial results presentation for the first half of financial year 2024. I'm Anthony Brown, the CEO of NobleOak, and I'm joined today by our CFO, Scott Pearson. Today, I'll begin with an overview of the highlights from the half, before handing over to Scott to cover off the financials in a bit more detail. I'll take you through an update on the business, and the outlook for the second half, and we'll then open up for questions. So turning to our highlights on slide four. Firstly, I am pleased to report a strong first half performance, 24% annual in-force premium growth, as well as we continue to outperform and gain market share. So we achieved strong profit growth and margin stability, driven by robust underwriting and financial discipline, and with higher interest rates remaining a tailwind for our investment returns and earnings. Importantly, our capital position was strengthened in the half, with a regulatory capital multiple of 228%, at the end of December, giving us sufficient capital to continue to execute our organic growth plans. In the half, Scott and his finance team put in an amazing effort to implement the new insurance accounting standard, AASB 17. This was a significant project across the whole industry, so we're really pleased that it's overall had a positive impact on capital and the profit for the half. It's good to see market activity continuing to improve across the industry, and with our above market share of new business sales and low lapse experience, we affirm our full year guidance for in-force premium growth of 15%-20% in a market that appears to be growing at around 3%. Looking more specifically at financials, slide five clarifies the story of strong growth in premiums and profits. As mentioned, in-force premium, the real value driver of our business, grew at 24% year-on-year to over AUD 351 million, reflecting continued market share growth, which increased to 3%. As the life insurance market activity continues to improve, we were pleased to see sales also increase by 23%, with our new business market share tracking above target at over 13%. At the end of December 2023, we had over 128,000 active life insurance policies, up 15% from the prior year, which is supported by our lapse rate of 9.1% across the portfolio, which remains below our long-term expectations and the industry average. Underlying NPAT grew by 16% to AUD 7.8 million, driven by our disciplined approach to underwriting and expense management and the benefit of higher interest rates. Overall, we're really pleased with the financial performance, and we hope you are as well. I'll now hand over to Scott to provide a bit more detail on the financials. Thanks, Scott. Yes, thanks, Anthony, and good morning, all. Yes, there has been a significant amount of investment and activity across the industry to transition to the new accounting standard. And as highlighted in our information session last week, the overall impact of AASB 17 on NobleOak has been positive. I also noted that in that session, NobleOak has introduced additional reporting that provides visibility of the key metrics used by the industry, and as we review the results today, we will look at these key metrics available from that management analysis. So beginning on slide seven, I'll start with the financial performance of the NobleOak group level. As Anthony said, we have increased our active policy count by 128,000, to over 128,000, driving strong in-force premium growth of 24% as we continue to gain market share, which is now up to 3%. Against a backdrop of improving market activity, we are pleased to see sales increase by 23% this half year as we continue to take a greater market share of new business. Overall, our net margins remained stable, with our strong underwriting performance delivering a stable underwriting gross insurance margin. Importantly, net claims expense remained within expectations following our methodology changes in FY 2023. Our administration expense ratio was a little higher, impacted by additional investment in the business as we built capability in the first half, but this was more than offset by higher investment returns. As a result of this margin stability, we're pleased to report our underlying net profit after tax grew by 16% to AUD 7.8 million. I'll now turn to our operating segments, which provide a picture of the key performance drivers of our business. In the direct channel, which is NobleOak's key long-term value driver. Australia continues to deliver results with our targeted investment in digital marketing, and optimizing our customer experience is continuing to drive growth in market share. Our direct policy count increased by 12% to over 48,000, with in-force premium growing by 16% to just under AUD 86 million. Pleasingly, we continue to achieve well above our target market share of sales. The underlying gross insurance margin remained strong, with better-than-expected net claims experience, and the expense ratio, again, was up, and impacted by non-recurring technology investments. However, this was partially impacted by favorable investment returns. Pleasingly, our stable margins have delivered underlying net profit after tax growth of 18% in the segment to AUD 3 million. Just worth noting that both the half year in FY 2024 and the half year, the restated prior period expense ratios have benefited by the transfers and claim handling expenses to the claims line, which brings NobleOak in line with its peers. Turning to the strategic partner channel on Slide nine. Our strategic partners continue to deliver strong growth, with policies active up 17% to over 80,000 policies. In-force premiums are up 27% to over AUD 265 million, driven by new business sales that were up 28% in the period, benefiting from improved market activity. NobleOak continues to gain market share, now at 2.5% of the advised market, driven by our contemporary products, high-quality service, and the strong partnerships with NEOS and PPS. Our strong underwriting performance delivered underwriting margin stability. Again, with net claims in line with expectations, with the expense ratio remains very attractive and continues to benefit from operating leverage. Importantly, underlying net, net profit after tax in the strategic partner segment increased by 17% to AUD 4.5 million. On the next slide, we see the performance of our administration services business, Genus. In-force premium under management stabilized in the period, following the conclusion of the Freedom remediation program we've seen in previous years. Moving forward, Genus expects to see lapse rates and in-force premium to move to more normal run-off levels, which may be close to 10% reductions per annum. Underlying NPAT, as a result, slightly decreased in the period in line with in-force premium. So reflecting on those segments, pleasingly, each of our segments continued to deliver good results in the half year. Turning to our capital position on Slide 11. As Anthony mentioned, in the first half, NobleOak has seen a strengthening in its capital position, which would benefit from, firstly, a one-off change in the APRA capital standards that reduced prescribed capital amount by about AUD 2 million. Higher interest rates benefited in the period, seeing good investment returns, and the benefit of the AASB 17 transitions or lower tax payments in the period as we're utilizing our deferred tax losses. At 31 December 2023, our capital base was AUD 43.9 million, representing an improved multiple to 228% of regulatory requirements. This was up from 191% at June, at the end of last year. With AUD 13.1 million in surplus assets above our internal targets, NobleOak's capital position remains sufficient to execute our organic growth strategy in the near term. I guess, just to conclude on the, on the numbers, just and recapping, last week, we disclosed to the market the impacts of the transition to AASB 17, the new global insurance accounting standard that took effect from 1 July. AASB 17 was aimed to enhance comparability with non-insurance reporting and across jurisdictions, as well as provide greater transparency in the financial information, and you should see that in the half year accounts you've seen that come out today. For NobleOak, it's important to note that there was no change to the underlying business fundamentals or our strategy as a result of the adoption of AASB 17. There were, however, some impacts on transition. As we spoke last week, we've created a AUD 27 million deferred tax asset with the introduction of... which is obviously going to provide us with some benefits to capital and cash flows in the near term in the future. The write down of the deferred acquisition cost of transition will provide a bit of an uplift in profits in the coming years, and we'll also see the changes to our profit release pattern, profits brought forward in the near term. There were some changes to the presentation of the PNL and balance sheet, which we spoke about as well, but the full impact on the change to AASB 17 is included in the pack we've lodged with the ASX last Wednesday, 21st of February. Overall, the implementation of AASB 17 was a significant investment in both financial and human resources for NobleOak, but we're very pleased with the implementation and its success. And thanks for listening to me today, and I'll hand back to Anthony. Thanks, Scott. Now turning to our business highlights at a segmental level on slide 15. In the direct channel, it was another really big year for the team. Our brand, service, and distribution continues to drive growth. We maintained our outstanding service to our customers and resulting in us also maintaining the Australia's Most Awarded Direct Life Insurer over the last 12 months. And this also included Canstar Income Protection Award, which we won for the ninth year in a row. I think any other competitor has only won twice in a row, and we've managed to win that award nine years in a row, so we're very proud of that. Our white-label partnerships with RAC WA and Budget Direct continue to perform well, and both partners are very pleased with the relationship. Our network of alliance partners also grow, and now with over 40, including Costco, who we partnered with recently, and we're currently undertaking a co-branded promotion to their more than one million Australian members. Great business and a good partnership for us. In the strategic partner channel, our partners also continued to outperform the advised market with a 12.5% share of new business, driving our in-force market share up to 2.5% of the advised market, and our claims and lapse experience remaining ahead of the industry. We recently partnered with a new global reinsurer to support the growth of the PPS portfolio, and our partnership with NEOS continues to deliver strong growth, benefiting from our high-quality service. Moving to slide 16. Last year, we designed and commenced a three-year project to roadmap and create a market-leading direct omni-channel customer experience. We've always had a leading service proposition, but we wanted to take it to a new level where both our digital and our phone-based service are completely linked. This will enable us to increase the quality and digital access of our service, as well as efficiency of the sales and underwriting process through a modernized IT platform. After a significant upgrade, a new data warehouse, and redesigned front end, we're making excellent progress in our digital transformation program and remain on track to launch our new omni-channel customer experience in April this year, two months ahead of schedule. This transformation is really set to significantly enhance our customers' engagement with our products and services, while also expanding our business's capacity to support future growth. Turning to the outlook for the second half of financial year 2024 on slide 18. Against a backdrop of improving market conditions, we do expect to continue to outperform and achieve above-market in-force premium growth. The high interest rates are a tailwind for NobleOak, which significantly improves investment returns, offsetting inflationary impacts on our cost base. We will retain our strong financial disciplines while investing for growth and capability, particularly as we implement the phase of the digital transformation. Our new omni-channel will be launched, as mentioned, and continually optimized. We remain well-capitalized to continue our organic growth trajectory, and will continue to selectively evaluate inorganic opportunities in direct wealth in line with our established strategy, and we'll naturally update the market as we progress. So with 11% in-force premium growth in the first half of 2024, we are also pleased to reaffirm our guidance of 15%-20% in-force premium growth for the financial year 2024, in a market currently growing at around 3%. Overall, I'm very proud of the team in delivering strong results for our investors, and I really hope you are pleased as well. I'd like to thank the NobleOak team for another huge year and fantastic efforts. They continue to punch above their weight, and while I'm proud of their achievements so far this year, we do acknowledge there's still a lot of work to do as we grow this business. I'd also want to make a special call out to Scott and the finance team, along with our advisors, for their huge commitment and determination in implementing AASB 17, which has just been an unwelcome but huge investment of people's time. But we're so pleased that we got some positive results from that implementation. Thanks to the board for their ongoing support and governance over this business. And of course, thanks to the shareholders for your continued support. We'll now open up for Q&A. Thank you very much. Thank you. For those on the conference call who wish to ask a question, please press star and one on your telephone. Wait for your name to be announced. You wish to cancel your request, please press star and two. If you are using a speakerphone, we do ask you please pick up the handset prior to asking your questions for the best sound quality. Once again, that is star and then one to join the question queue. Our first question today comes from Philip Pepe from Shaw and Partners. Please go ahead with your question. Hi, guys. Congratulations on a good result, certainly solid growth coming through. Just curious to drill down more on your sort of investing for growth. So you talked about investing in some admin expense or expenses to fuel growth in the second half, and then potential strategic acquisitions. Can you give us a bit more detail? Not too specific, but areas of growth that were acquisition-ready can come from the next sort of two or three years? ... I picked up the first part, Philip, what about, I guess, investing in growth. We continue to do so during the period. We'll continue to invest in people capability right across the business, actually quite a competitive market. But some of the things that will have impacted the ratio on the particular half was us continuing to invest in our technological capabilities. And it's not just the IT transformation project we talked to, but there was some more fundamental continue to invest in our BAU support and frameworks around underwriting capabilities and underwriting engines to ensure that we're leveraging our omni-channel going forward. Understand. Yeah, sorry, Phil. Thanks, and I'll try and answer the second bit as well. When you talk about growth opportunities going forward, we've always had the three growth opportunities: organic growth, trying to obviously grow our existing products through sales, and we're inorganic growth, where we do always look for other opportunities, and our reinsurance risk exposure, where we look to progressively take on more reinsurance risk. So we are continuing to invest in those, and as Scott said, the infrastructure of the new platform will help us get more scale with organic growth, and we'll continue to invest in marketing. Inorganic growth, we do keep looking at opportunities. We, you'll probably remember, we did buy that, the Budget Direct portfolio a couple of years ago, and we continue to have a pipeline, but have quite a high, return on capital target that we look to meet. So we'll continue that. And the reinsurance, taking more insurance risk, we've increased our insurance risk exposure as well over the last couple of years, and we'll continue to monitor that and increase that, if prudent. Excellent. Thank you. No problem. Once again, if you wish to ask a question, please press star and one on your telephone and wait for your name to be announced. Our next question comes from Nicholas McGarrigle from Barrenjoey. Please go ahead with your question. Thanks, guys. I just wanted to ask a question around what the result would've been under the old standard. I'm not sure, you may not have gone to the extent of the hassle of doing that given you've adopted the new standard, but just curious on that as a starting point. I think you're right. We've made a significant investment in dollars and financial resources to produce it under AASB 17, so we did not prepare one under the old standard. But fair to say, what you're seeing in the results today is a stability in margins and growth that is growing, I guess, in line with the growth across each segment. So you might expect that under the old standard, you would've seen less growth at segment level with similar stable margins, Nick. So, I've not done the sums for you there, but I suspect you would've seen the profit growth prior period and probably a little bit, but would've been a little bit lower than what you're seeing today, given there's been profit brought forward under the new standard. Yep. Okay. And then as the, I mean, the strategic partners book's grown very quickly, and the profit margin there has obviously stepped up under the new standards. If you maintain sales at this rate, and the book continues to grow, I'm just trying to get a sense of, does the profit profile change over time, given the strategic partners book is kind of front loading the profit recognition versus the prior standard? I'm just trying to understand the dynamics around if direct or partners are growing faster than the other, does it change kind of the profitability in a given period? Yeah. Nick, it is a good question, and one you raised last week. I think the key is, as I endeavored to say last week, is that when you're looking at the relativities to both the standards, what you'll have seen in the half year is actually the whilst both the strategic partners have stepped up and the directors stepped down, you're actually seeing growth in each segment, that actually it aligns not immaterially from their in-force premium growth. But we will see that normalize over time, though, Nick, as you as we saw in those graphs last week, over the medium term, you would imagine that the direct channel will actually increase a little bit faster than the strategic partners channel. But in the near term, we will see growth in both channels, which will be in line with the in-force growth. Okay, cool. And then I guess, given you gave us the restated full year last week, and you've given us the half year, it implies that you were sort of 6.8 first half, 5.8 NPAT second half. Was there specific investments that you made? I know that there was some adjustments in admin expenses that were kind of one-off in nature during FY 2023, but just want to get a sense of, is there seasonality in the profit recognition, or should we expect that given you've, you've got a steady investment base now, you would naturally grow profit in the second half of in-force benefits year? Yeah, I think what we may have spoken to in the full year results last year, Nick, was the second half was impacted by some methodology changes in our reserving for IP claims, which we've not seen. We've not seen that sort of experience in the first half, so we would hope not to see it in the second half as well, Nick. So probably the second half last year was impacted by claims reserve strengthening, which we would hope to not see again. ... Yes, so all those being equal, you'd expect the first half 2024 profit to grow into the second half as the in-force benefits you and, you know, costs are more, you know, there's not that kind of one-off impact that you've done that was in the prior period? As a growing business, that's what you would expect. That's right. Sorry, that doesn't constitute firm guidance. It's fine. That's a broad enough statement. Just in terms of the strategic partners book, there's been a strong rebounding growth there. Can you just call out particular channels that is, that's driven that? Is it kind of a normalization of the broader market when it comes to Income Protection? Just trying to get a sense of what's changed there and maybe the outlook for strategic partners. Yeah, thanks, Nick. It's Anthony. Yeah, look, we're really happy with the growth in the both strategic partners and direct. There is a bit of a normalization. You probably remember when the new IP products came out, we had a really big kicker in sales because we were selling a lot of the older product, and then there was a readjustment, and now there's a normalization. So we're pretty confident with the level of sales we're getting from strategic partners. We don't really see any reason why that should significantly change in the future, but of course, we always keep an eye out on the competitive dynamics and so on. In terms of the run rate of sales, there was nothing one-off to call out, and presumed predominantly it was NEOS that continued to outperform the other partners? There's nothing really to call out. PPS is a different style of business to NEOS. It's a longer term business. By the nature of it, it has a savings account attached to the product, so the longer it's in market and the greater the investment builds up in the savings product, and therefore, the more valuable the policy is for people. So we always thought it would be a slower growth, have a slow growth profile, which has proven to be the case, but it is growing nicely, and it's contributing really well to the portfolio. So we're really happy with both the partners. In terms of the competitive dynamic, I know NEOS introduced another policy. You You haven't seen any detriment to your ability to write new business in that channel? Yeah, we haven't really seen any surprises, Nick. I remember when it happened, we were sort of saying it's targeting a different market. We didn't really think it would have a material impact on sales. We still believe that. We haven't seen any material deterioration in sales or lapses. Just to move on to the direct book, that, this new sales there were only up circa 4% on last year. Presumably, that's not quite the level of growth that you'd like to see in that book. Just a comment on that. Well, yeah, I'll, I'll jump in, Nick. I think that there's probably two key factors to articulate there, is that the direct book didn't have as big an impact from the destabilized market in the last few years, so it didn't have as much to rebound as you might have, as we've seen in the strategic and the advice space. And the second one, we're actually reasonably pleased. Whilst we'd like to continue to see the sales growth, we actually did achieve, I think it was 15.8% of market share of sales in the direct segment, which is actually continued to be very healthy. So we are continuing to see a very, very strong market share of direct sales. So would the comment be that the market for direct sales is not necessarily booming, maybe in the context of kind of macro pressures on the consumer? 'Cause I guess market share is all well and good, but I suppose you, you would like to be growing new sales on PCP at a better rate than 4%. We certainly haven't had the tailwinds of a, you know, significantly growing market. We do think the market has bottomed out, and we are certainly seeing it improving, which is pleasing. But as I stated, I think that the market's really only increasing by about 3% a year, and that's the retail market, so that includes both advised and direct. We, we do feel there's built up demand, because there's obviously, clearly a lot less advisors. When there's a lot less advisors, there's just less market activity overall, and that includes direct. So we love market activity. It, it helps stimulate the direct portfolio as well as our advised. So we think that will change, Nick. We haven't really had those tailwinds of a growing market, but as Scott said, our market share is significantly higher than new sales than it is of our in-force. So we are really pleased with how that's growing, and maybe in the next year or two, the market will continue to improve, and we'll see a little bit of tailwinds as well. Can you just comment maybe on lapses and the kind of step or inflation in policies? Which line do you book? Like, if someone reduces their cover, does that go through as a partial lapse, or does it go through as a kind of a negative in the kind of inflation or step line? Well, from an accounting perspective, obviously all movements in premium goes through, I guess, premium revenue under the management analysis, but under insurance services revenue under the new standard. But from a lapse, from a statistical perspective, partial lapses do go through the lapse rate. And so you'll see that coming through there. Price increases obviously are not netted off against the lapse rate. Right. And would you call out any trends on lapses? It has obviously stepped up, obviously well below industry averages, but stepped up on recent years. Is that predominantly partial or complete lapses? I think primarily the key message of our increasing lapse rate is that it is twofold, that as this has matured, it has had very low lapse rates, given the policies haven't been on foot for a long period, and our lapse rates are increasing as expected, as the portfolio matures. But obviously, in the last few years, we've also seen the coming off of the pandemic lows. So I think the increase in lapse rates is something we continue to monitor closely. Obviously, sustaining policies on our books is a key value driver for us, but we're not being startled by the increase in lapse rates. It's actually as expected. All right, great. Maybe just to comment on the, some of the new alliance or affiliate partners that you've got in the direct channel. Have we seen a run rate benefit from some of those deals in the last 18 months in that first half result? Yeah, we certainly have. I mean, the RAC and Budget Direct are sort of 2.5 years in now, and they're growing really nicely, as per expected. The newer ones are Costco and Singapore Airlines, and it does take probably a good year before we get traction with alliance partners, but Costco, in particular, has got traction possibly faster than what we originally thought. So we are really confident that Costco, in particular, will have quite a material impact on our growth going forward. And we're also really confident that RAC and Budget Direct will continue to grow as well as our digital channel, where we've seen quite a bit of growth. Okay, that sounds good. I mean, I assume with the Costco policy, the consumer goes in wanting to buy an AUD 1 million policy, and they walk out with a bulk pack for AUD 10 million. Is that usually the upsell? Spot on, Nick. That's exactly the way it works. Well, actually, with Costco, it's a very strong business in Australia. It's sort of the brand probably isn't as well known as some of the bigger brands, but the sales numbers that they do are amazing, and they rely very heavily on their membership program. So their promotions through their newsletters and online directly to their members, and the members actually get benefit if they purchase level life insurance, does actually seem to work very well. So we're really hoping that that does build, and we do like the nature of their brand as well. In the current environment, when people worry about costs, the connection is very strong for us with Costco. When we look at the Genus business, I think, Scott, you've mentioned it's been resilient in terms of gross premium revenue that you've been booking. The in-force hasn't really run down. Profitability, obviously under a bit of pressure, I assume that's administration expenses. How, if you continue to see, as you've alluded to, 10% reductions every year, how do we think about the profitability of Genus as a segment? Is the cost recognition in that segment more of an allocation of group costs, so you can manage that direct to revenue? Or how do we think about profit if the top line's decreasing 10% a year? I think you picked up the key components in your question there, Nick. It is a volume game, and being efficient. Having said that, we're a part of a group, and what we've seen in the past is actually the Genus business has actually been quite a fantastic nursery for providing resources and skill sets across our business. And in fact, our back offices are now pretty much being merged together. So, but what you'll see is... What we're seeing is, obviously, depending upon whether we acquire any new books to acquire going forward, as the in-force runs off, there'll be less. Much of the costs in the business is actually just human resources to manage calls, and manage claims, and manage policy activity. And we would manage to wind down those resources in that segment, which is quite beneficial to the extent that the other business segments are increasing. We just reallocate those resources to the growing direct book. The best way to think about Genus profit is it kind of maintains that AUD 300K-AUD 350K per half year run rate of profit as you reallocate those resources as the premium shrink? I think what you'll see is you should see. What What you might expect to see is a similar margin as the in-force premium falls. So, it wouldn't necessarily stay at 350 when the in-force is almost gone, if that makes sense? Yep. No, that's helpful to understand. All right. right. Appreciate you taking all those questions. Once again, if you would like to ask a question, please press star and then one. Our next question comes from Fred Woollard from Samuel Terry Asset Management. Please go ahead with your question. Gentlemen, good morning. Congratulations on what looks like a good result. A couple of questions from me. First, can you explain the impact of the AASB 17 changes, how it affects PCA? Yeah, I saw in your presentation that we used PCA, but if you can explain further why this is so, and also explain from a cash perspective, its impact on the cash that the company will have to pay over the next, you know, two or three years. Thanks, Fred. I'll take those two points. The first one, I'll just clarify, PCA fell in the half year. That had, in fact, nothing to do with AASB 17. It was an APRA Prudential standard that changed the way you would calculate regulatory requirements about operational risk, and in fact, too much detail. But essentially, rather than using in-force premium going forward, you're using earned premium for a growing business, that's just a little bit lower. So the PCA went down not due to the new accounting standard, but to do with a change in the Prudential standard, the APRA standard. Your second question around how does the standard impact cash flows going forward? The key is that underlying cash flows at policy level haven't changed at all. What we will see the benefit of going forward is, on transition, we wrote down our assets by AUD 90 million. Most of that was the DAC assets, which created some deferred tax assets, deferreds back, but tax loss assets, which means for the coming period, that was about AUD 27 million in deferred tax assets. For the coming period, where we've got profits, we'll see lower tax payments, which will improve our cash flows into the future, but whilst those tax losses exist. Hope that answers your question, Fred. Great. Thank you. Ladies and gentlemen, with no further questions at this time, I would like to hand the call back over to Mr. Brown for closing remarks. Well, thank you very much. Thanks for your engagement, and thank you very much for the continued support from our shareholders. I hope you're happy with the results, and we look forward to catching up with many of you in the coming days. Have a great day. Thank you. This does conclude our conference for today. We thank you for participating. You may now disconnect your lines.