Spot on. This is a massive market overaction. It is tempting to accumulate at this level as it doesnt change the economics of the business. Claims experience is claims, nothing the entity can do to control other than to price it effectively or change product terms on future products.
I disagree with the comment though about the pre oct21 products being higher quality. Thats from the point of view of policyholders (or the adviser that sells them), not a life insurer. Post October 2021 policies are capped at 70% of earnings plus further sustainability measures. Basically the policies were a potential windfall for customers on agreed value policies etc, but a nightmare for the insurers (I know because i work in pricing for them). Just a couple of massive claims can hurt the profitability significantly. I think that is what we are seeing here from Clearview. Hopefully they are taking a bath on these policies now and they can move into Q2 and the rest of the year well.
What I am a little unsure about is that 6m on 170m of total FY24 claims experience doesnt seem material enough, but obviously it has all but wiped out Q1 profit, which is why the company felt the need to disclose.
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