Nib Holdings Ltd · ASX:NHF
Nib — H1 FY2021 Earnings Presentation
32 slides from Nib's earnings presentation, Feb 22, 2021
Slide 1: FY2021 half year results presentation
FY2021 half year results presentation 22 February 2021 2020 AFL Premiers – Richmond Tigers Sponsored by nib
Slide 2: Disclaimer
Disclaimer The material in this presentation is a summary of the results of nib holdings limited (nib) for the six months ended 31 December 2020 and an update on nib’s activities and is current at the date of preparation, being 22 February 2021. Further details are provided in nib’s half year accoun
Slide 3: Mark Fitzgibbon, Chief Executive Officer & Managing Director
Chief Executive Officer Mark & Managing Director Fitzgibbon FY21 half year results 3
Slide 4: Acknowledgement of country
Acknowledgement of country nib acknowledges Aboriginal and Torres Strait Islander peoples as the First Australians, and pays respect to Elders past and present across all the lands on which we operate. We acknowledge the rich and meaningful contribution they make to life and culture in Australia, an
Slide 5: Our purpose: your better health
Our purpose: your better health Population health initiatives, including $45m+ in CV19 support to date Ngāti Whātua Ōrākei Accelerating plans to better predict disease risk and manage illness ~185,000 hospital admissions and with ~1,900 members enrolled in 1.9 million ancillary visits during 1H21 Ho
Slide 6: 1H21: Group results
1H21: Group results $1.3b $86.9m $28.0m total Group revenue Group UOP net investment income ▼1.1% ▲4.4% ▲122.2% Group revenue up ▲2.5% Statutory operating profit $71.6m ▼2.2% excluding nib Travel $66.2m 14.5cps 10.0cps NPAT statutory EPS interim dividend ▲15.9%, ▲27.5%, ▲15.1% 1H20 10.0cps excluding
Slide 7: 1H21: highlights
1H21: highlights - Strong focus upon member needs in relation to CV19. 1H21 premium relief of Annual arhi net policyholder growth nib v industry3 $20.2m in arhi and $0.2m in NZ and expanded cover for CV19 related 4.5% treatment. 4.0% - Impressive arhi net membership growth of 2.7%1. 52.0% of sales <
Slide 8: Nick Freeman, Group Chief Financial Officer
Group Chief Financial Officer Nick Freeman FY21 half year results 8
Slide 9: Group income statement
Group income statement ($m) 1H21 1H20 Change Key drivers of result Net premium revenue 1,253.3 1,227.6 ▲2.1% - 2020 arhi six month premium increase postponement offset by buoyant policyholder Net claims incurred1 (1,003.0) (994.2) ▲0.9% sales and retention. Other underwriting revenue 1.7 1.5 ▲13.3%
Slide 10: Group gross profit drivers 1H20 – 1H21
Group gross profit drivers 1H20 – 1H21 1H20 Group gross profit ($m) 242.3 Policyholder growth 3.6 - Premium revenue growth impacted by postponement of price increases due Premium revenue 25.2 to CV19 and shifting product mix. Claims expense (21.7) - Policyholder growth benefit lower than normal with
Slide 11: Movement in COVID-19 provision
Movement in COVID-19 provision 30 June 2020 ($m) arhi NZ Group - Lower than expected claims increased from 30 June 2020 principally due to Est hospital savings 58.3 Victorian lockdowns and favourable risk equalisation results. Est risk equalisation savings 14.5 - Group deferred claims now assumed at
Slide 12: Australian residents health insurance
Australian residents health insurance Financial performance ($m) 1H21 1H20 Change Double digit earnings growth driven by policyholder Premium revenue 1,067.8 1,044.4 ▲2.2% growth as well as favourable nib and industry claims Claims expense1 (874.5) (881.3) ▼0.8% experience Other underwriting revenue
Slide 13: arhi: UOP and risk equalisation trends
arhi: UOP and risk equalisation trends Risk equalisation trends – quarterly YOY change in gross deficit per SEU 1 UOP 1H20 v 1H21 Increase in underlying operating profit of $26.4m $m 20.0% 100.0 16.5 15.0% 0.3 90.0 23.4 0.5 - 10.0% 4.1 5.0% 80.0 9.2 0.0% 70.0 89.0 -5.0% 60.0 -10.0% -15.0% 50.0 62.6
Slide 14: International (inbound) health insurance
International (inbound) health insurance Financial performance ($m) 1H21 1H20 Change 1H21 performance a tale of two businesses Premium revenue 58.3 61.5 ▼5.2% - iihi business impacted by negative policy growth due to border restrictions and Claims expense (39.8) (30.3) ▲31.4% higher claims in intern
Slide 15: New Zealand
New Zealand Financial performance ($m) 1H21 1H20 Change Track record of top line growth and stable margins Premium revenue 126.9 119.0 ▲6.6% - Premium revenue ▲6.6% a combination of policyholder growth, price adjustments Claims1 (79.3) (73.7) ▲7.6% and FX. Management expenses (36.6) (34.1) ▲7.3% - R
Slide 16: nib Travel
nib Travel Financial performance ($m) 1H21 1H20 Change Challenging operating environment with focus on keeping Operating income 4.4 47.8 ▼90.8% acquisition channels ready for new environment, brands Acquisition costs (0.3) (22.2) ▼98.5% healthy and rightsizing the cost base Underwriting result (0.2)
Slide 17: Investments, gearing and capital
Investments, gearing and capital ($m) 1H21 1H20 Change ($m) Net investment income ($m) 28.0 12.6 ▲122.2% Opening available capital 30 June 2020 57.0 Net investment return (%) 2.7 1.3 ▲140bps Sources of capital: 22.6 Funds invested ($m) 928.2 865.9 ▲7.2% NPAT 66.2 Debt ($m) 233.0 234.3 ▼0.6% Other in
Slide 18: Cash flow
Cash flow Consolidated cash flow ($m) 1H21 1H20 Change Net operating cash impacted by: Receipts from policyholders and customers 1,272.6 1,298.6 ▼2.0% - Deferral of price increase to October 2020. Payments to policyholders and customers (1,029.3) (1,011.5) ▲1.8% - Cash vs incurred claims increase du
Slide 19: Mark Fitzgibbon
Chief Executive Officer Mark & Managing Director Fitzgibbon FY21 half year results 19
Slide 20: Sustainability at nib
Sustainability at nib Transition to 100% renewable Included in the 2021 Bloomberg Reflect Reconciliation Action Plan energy procurement for all nib Gender Equality Index for the published controlled locations by end of second year running FY21 Placed 87th globally in the Commitment that nib operatio
Slide 21: Business strategy
Business strategy Personalised Affordability and Grow the core Economies Racing the Red healthcare sustainability (arhi) of scope Queen (RRQ) FY21 half year results 21
Slide 22: Key focus areas
Key focus areas - arhi and NZ membership growth (organic, partnerships, M&A). - New product development associated with P2P. - Active and targeted disease prevention and management. - Digital health ecosystem. - Continued investment in Honeysuckle Health. - Redressing high claims experience in iihi.
Slide 23: Outlook
Outlook arhi New Zealand • Strong sales and improved retention • Strong sales and improved retention throughout FY21 and beyond. Target 3-4% throughout FY21 and beyond. annual net policyholder growth. • Relatively modest claims growth given ongoing • Relatively modest claims growth given CV19 risk i
Slide 24: Honeysuckle Health & China JV
Honeysuckle Health & China JV Honeysuckle Health China JV (Flying Tiger) • Joint venture between nib and Cigna • Joint venture between nib and Tasly Group • Newcastle • Tianjin/Shanghai About • CEO Rhod McKensey (formerly Group Executive arhi) • CEO Wu Jun • 57 employees • 25 employees • Healthcare
Slide 25: Questions and answers
Questions and answers FY21 half year results 25
Slide 26: Appendix
Appendix FY21 half year results 26
Slide 27: Policyholder and other data
Policyholder and other data nib Group health insurance 1H21 1H20 FY20 Total persons covered1 1,629,784 1,614,838 1,616,263 Australian residents health insurance 1,211,264 1,186,159 1,186,805 International (inbound) health insurance1 189,288 203,143 202,533 New Zealand 229,232 225,536 226,925 vs PCP
Slide 28: Detailed Group gross underwriting result
Detailed Group gross underwriting result ($m) 1H21 1H20 Change Net premium revenue 1,253.3 1,227.6 2.1% - arhi 1,067.8 1,044.4 2.2% - iihi 58.3 61.5 (5.2)% - nz 126.9 119.0 6.6% - nib Travel 0.3 2.7 (88.9)% Net claims expense (866.4) (841.5) 3.0% - Hospital claims paid (arhi) (518.7) (513.7) 1.0% -
Slide 29: Management expenses: arhi, iihi and nz
Management expenses: arhi, iihi and nz (commissions (commissions (commissions management management Amortisation underwriting of acquired amortised) intangibles Marketing Marketing Marketing marketing Marketing expenses expenses expenses expenses operating deferred) indirect indirect indirect (direc
Slide 30: Risk equalisation: how it works
Risk equalisation: how it works The current Risk Equalisation Trust Fund (RETF), which has been in place since 1 April 2007, consists of two elements: - Gross deficit (what we ‘get back’ from the pool). • Consists of the Age Based Pool (ABP) and the High Cost Claims Pool (HCCP). The ABP makes up aro
Slide 31: Investment asset allocation
Investment asset allocation Consolidated Australian investment portfolio New Zealand investment portfolio nib foundation investment portfolio Net return 6 Net return 6 Net return 6 Net return 6 Balance at Allocation at Balance at Allocation at Balance at Allocation at Balance at Allocation at months
Slide 32: Glossary
Glossary Term Definition Term Definition 1H Six months ended/ending 31 December of the relevant financial year nib nib holdings limited 2H Six months ended/ending 30 June of the relevant financial year nib Travel nib Travel is a travel insurance distributor APRA Australian Prudential Regulation Auth