Nib Holdings Ltd · ASX:NHF
Nib — Investor Presentation (August 2021)
30 slides from Nib's investor presentation, Aug 23, 2021
Slide 1: FY21 full year results
FY21 full year results 23 August 2021
Slide 2: Disclaimer
Disclaimer The material in this presentation is a summary of the results of nib holdings limited (nib) for the 12 months ended 30 June 2 021 and an update on nib’s activities and is current at the date of preparation, being 23 August 2021. Further details are provided in nib’s full year accounts and
Slide 3: Acknowledgement of country
Acknowledgement of country nib acknowledges Aboriginal and Torres Strait Islander peoples as the First Australians, and pays respect to Elders past, present and emerging across all the lands on which we operate. We acknowledge the rich and meaningful contribution they make to life and culture in Aus
Slide 4: Result highlights and business update
Result highlights and business update Mark Fitzgibbon Chief Executive Officer & Managing Director FY21 full year results 4
Slide 5: Our purpose: your better health
Our purpose: your better health Delivering on our purpose: 378,900 hospital admissions 3.9 million dental, optical and ancillary visits $1.8 billion benefits paid1 (up 14.5% on FY20) More than 6,500 members in health management programs (10% reduction in readmissions2) 6 active Honeysuckle Health pr
Slide 6: Sustainability
Sustainability Continued support of Responsible Distributed Work Ngāti Whātua Ōrākei Investment Policy Policy members Over $2.7m in community & Transitioned to 100% Diversity & Inclusion preventative health renewable energy Plan funding (with nib foundation) Population Natural Economic Community spi
Slide 7: FY21: Group financial results and highlights
FY21: Group financial results and highlights total Group net investment revenue Group UOP income NPAT $2.6b ▲2.9% $204.9m ▲39.5% $51.8m ▲212.0% $160.5m ▲84.5% 2.4 2.5 2.6 51.8 149.3 160.5 201.8 204.9 146.9 36.1 87.0 16.6 FY19 FY20 FY21 FY19 FY20 FY21 FY19 FY20 FY21 FY19 FY20 FY21 statutory EPS ROIC1
Slide 8: Financial overview
Financial overview Nick Freeman Group Chief Financial Officer FY21 full year results 8
Slide 9: Group income statement
Group income statement ($m) FY21 FY20 FY19 Change FY21 v FY20 Key drivers of result Net premium revenue 2,548.8 2,439.6 2,340.8 ▲4.5% - Strong arhi policyholder sales growth and retention. Net arhi policyholder growth of 4.2% versus 3.1% industry average. Net claims incurred1 (2,004.9) (1,955.3) (
Slide 10: Group gross profit drivers FY20-FY21
Group gross profit drivers1 FY20-FY21 ($m) FY20 FY21 Movement FY20 group gross profit 506.2 - Policyholder growth in resident health insurance (arhi and NZ) offset by decline in iihi sales due to CV19. Policyholder growth 8.1 - Unfavourable net impact of ongoing product mix downgrading. Premium re
Slide 11: Australian residents health insurance
Australian residents health insurance Change Financial performance ($m) FY21 FY20 FY19 - Premium revenue ▲4.9% driven by policyholder growth (4.2% vs FY21 v FY20 3.1% industry) and premium increases (October 2020 and April Premium revenue 2,174.1 2,072.3 2,013.20 ▲4.9% 2021). Claims expense (ex clai
Slide 12: International inbound health insurance
International inbound health insurance Change Financial performance ($m) FY21 FY20 FY19 - Despite impact of pandemic on international student and workers FY21 v FY20 arrivals, premium revenue down just 6.2%. Premium revenue 115.5 123.1 110.1 ▼6.2% - Overall iihi result impacted by declining policyho
Slide 13: New Zealand
New Zealand Change Financial performance ($m) FY21 FY20 FY19 FY21 v FY20 Premium revenue 258.6 240.1 215.5 ▲7.7% - Strong operating performance with business improving revenue (▲7.7%) and earnings (UOP ▲3.0%). Claims expense1 (158.7) (146.1) (130.0) ▲8.6% - Net policyholder growth (excluding underwr
Slide 14: nib Travel
nib Travel Change Financial performance ($m) FY21 FY20 FY19 1 - Loss of $13.6m, within expected range, due to continued CV19 FY21 v FY20 impacts on global travel industry. Operating income 14.0 54.1 72.4 ▼74.1% - Operating income ▼74.1% due to market conditions, strong growth Acquisition costs (4.2)
Slide 15: Investments, gearing and capital
Investments, gearing and capital Change ($m) FY21 FY20 FY19 Group capital ($m) FY21 v FY20 Net investment income 51.8 16.6 36.1 ▲212.0% Opening available capital as at 30 June 2020 57.0 Net investment return (%) 4.9 1.7 3.8 ▲320bps FY20 net assets restatement 2 (3.3) Funds invested 1,091.7 1,035.7 9
Slide 16: Cash flow
Cash flow Change Consolidated cash flow ($m) FY21 FY20 FY19 FY21 v FY20 - Lower free cash flow in FY21 due to CV19 provision causing a Operating cash inflows 2,692.2 2,635.1 2,548.7 ▲2.2% misalignment of operating cash flow and profit in FY20 and FY21 (net Operating cash outflows (2,583.5) (2,427.5)
Slide 17: Business outlook
Business outlook Mark Fitzgibbon Chief Executive Officer & Managing Director FY21 full year results 17
Slide 18: Our business strategy
Our business strategy PHI expansion Expand our value proposition and differentiate in existing PHI markets by making membership as much about supporting good health as it is the treatment of sickness and injury. We grow the PHI market and our share. New markets Enter and grow new markets with a non-
Slide 19: Outlook
Outlook arhi New Zealand - Market sentiment is positive for sales and retention but CV19 economic - Ongoing investment and effort on Māori population health opportunities. conditions potentially a countervailing factor. FY22 net policyholder growth - Continued investment in digital systems and moder
Slide 20: Question and answers
™¢Weetion and answers
Slide 21: Appendix
Appendix
Slide 22: Policyholder data
Policyholder data nib Group health insurance FY21 1H21 FY20 1H20 FY19 1H19 Total persons covered1 1,644,887 1,629,784 1,616,263 1,614,838 1,579,695 1,549,877 Australian residents health insurance 1,224,320 1,211,264 1,186,805 1,186,159 1,176,155 1,168,358 International (inbound) health insurance1 18
Slide 23: Movement in COVID-19 provision
Movement in COVID-19 provision 6 months to 30 June 2020 12 months to 31 December 2020 ($m) arhi NZ Group ($m) arhi NZ Group Est hospital savings 58.3 Est hospital savings 75.6 Est risk equalisation savings 14.5 Est risk equalisation savings 35.7 Est ancillary savings 40.7 Est ancillary savings 49.5
Slide 24: Group gross profit drivers – CV19 impacts FY20-FY21 for arhi and nz
Group gross profit drivers – CV19 impacts FY20-FY21 for arhi and nz FY21 FY20 ($m) arhi NZ Group arhi NZ Group arhi and nz CV19 impacts 15.0 0.0 15.0 0.0 (0.6) (0.6) Claims savings/deferral 30.7 0.0 30.7 71.8 9.4 81.2 Original CV19 provision and release 55.0 8.4 63.4 (55.0) (8.4) (63.4) Claims catch
Slide 25: Detailed Group gross underwriting result
Detailed Group gross underwriting result Change Underwriting result ($m) FY21 FY20 FY19 FY21 v FY20 Net premium revenue 2,548.8 2,439.6 2,340.8 ▲4.5% - arhi 2,174.1 2,072.3 2,013.2 ▲4.9% - iihi 115.5 123.1 110.1 ▼6.2% - nz 258.6 240.1 215.5 ▲7.7% - nib Travel 0.6 4.1 2.0 ▼85.4% Net claims expense (1
Slide 26: Management expenses – arhi, iihi and NZ
Management expenses – arhi, iihi and NZ Marketing indirect Other Total MER Amortisation Total Marketing Total ($m) management underwriting underwriting of acquired management MER (direct) (commissions (commissions (commissions marketing expenses expenses expenses intangibles expenses paid) deferred)
Slide 27: Investment asset allocation
Investment asset allocation Consolidated Australian investment portfolio New Zealand investment portfolio nib foundation investment portfolio Net return Net return Net return Net return Balance at Allocation at Balance at Allocation at Balance at Allocation at Balance at Allocation at 12 months 12 m
Slide 28: UOP waterfall graphs
UOP waterfall graphs Group New Zealand ($m) 250.0 81.4 ($m) 50.0 0.7 6.1 18.5 200.0 2.1 28.1 40.0 150.0 30.0 12.6 2.2 100.0 20.0 3.0 23.4 24.1 146.9 204.9 50.0 10.0 - - arhi 250.0 ($m) iihi 101.8 33.5 ($m) 0.4 25.0 200.0 1.0 2.3 3.0 20.0 48.0 15.0 150.0 211.8 22.2 7.6 10.0 5.0 100.0 130.4 - (5.9) 50
Slide 29: 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 30: Glossary
Glossary Term Definition Term Definition 1H Six months ended/ending 31 December of the relevant financial year Net premium revenue Premium revenue net of reinsurance 2H Six months ended/ending 30 June of the relevant financial year nib nib holdings limited APRA Australian Prudential Regulation Autho