NTA will drop below current share price

applying the expected decline in assets from implementation of AASB17 suggests a $1.36 drop in net tangible assets (NTA) that will put NTA below the current share price

1) the AASB17 presentation stated:

‘Liability for Remaining Coverage (LRC) replaces Unearned Premium Liability (UPL); the LRC includes an explicit allowance for future profits on existing policies, known as the Contractual Service Margin (CSM); and the Increase in opening liabilities due to inclusion of CSM in LRC is expected to reduce net assets by $180m to $300m.’

AND

‘No change to capital requirements or aggregate capital base expected on transition; and PCA coverage ratio unchanged’

2) the 1h22 results presentation reported NTA of $3.63/share (pre buy-back), suggesting a flow through 37.5% reduction of net assets will reduce net tangible assets by $1.36/share . . . . . suggesting that as at 30 June 2022 the NTA would have been $2.27 (pre buy-back).