41 slides from Bupa Arabia For Cooperative Insurance's earnings presentation, Dec 6, 2021
Slide 1: Bupa Arabia Q3 2021 – Earnings Conference Call & Webcast
Bupa Arabia Q3 2021 – Earnings Conference Call & Webcast December 6th, 2021 INTERNAL
Slide 2: Disclaimer
Disclaimer This presentation has been prepared by the management of Bupa Arabia (“The Company”). It does not constitute or form part of, and should not be construed as, an offer, solicitation or invitation to subscribe for, underwrite or otherwise acquire, any securities of the Company or any member
Slide 3: Agenda
1 Strategic Framework 2 Financial Performance Agenda 3 Market Outlook 4 Other Highlights INTERNAL
Slide 4: Strategic Framework
Strategic Framework INTERNAL
Slide 5: Strategic Framework
Strategic Framework We consistently strive to reflect what we stand for in everything we do Bupa Arabia’s Strategic Framework Purpose | Helping people live longer, healthier, happier lives Vision | To be the most trusted health insurer in the Kingdom of Saudi Arabia Our Pillars People Make the Diffe
Slide 6: Financial Performance
Financial Performance INTERNAL
Slide 7: Bupa Arabia at a Glance
Bupa Arabia at a Glance Robust profitability growth & significant value creation for shareholders with serving within in 24+ Years of Experience 1,800+ Employees 3M+ Members 1,450+ Providers Saudi Arabia GWP (in SAR M) CAGR +25% 10,411 10,447 7,939 7,733 8,567 7,328 5,740 2,198 3,177 871 1,206 1,610
Slide 8: KPI
KPI Flat 9m 2021 earnings despite increased LR, supported by lower expenses and strong investment income results In SAR M GWP Contribution Operating Income +5.6% -24.3% -8.4% 1,770 571 9,281 523 8,421 8,789 1,290 1,340 392 +12.4% -10.6% +30.3% 3,459 201 3,076 3,076 501 520 465 147 113 Q3 2019 Q3 202
Slide 9: EBT
EBT Flat 9m 2021 EBT as a result of lower expenses and higher investment income In SAR M EBT Change between 9m 2020 & 9m 2021 -0.2% 738.8 Change in Contribution: -SAR 430.2M 56.5 9.7 737.3 -289.9 362.5 -140.3 9m 2020 Earned Premium Claims Incurred Expenses Investment & Other Income PH Surplus Payabl
Slide 10: Investment Portfolio and Results
Investment Portfolio and Results Resilient investment income through increased duration, further diversification, and capital gains In SAR M Investment Income Asset Allocation SAR 7.1B SAR 8.7B SAR 9.3B +27.7% 215 72% 72% 70% 179 8% 6% 6% 168 81 18% 18% 20% 2% 4% 4% 9m 2019 9m 2020 9m 2021 60 57 Por
Slide 11: Market Share & Positioning
Market Share & Positioning Bupa Arabia maintains market leadership as of 9m 2021 Total Insurance Market Share on GWP Basis 29% 29% 29% 37% 36% 37% H1 H1 H1 2019 2020 2021 7% 20% 7% 21% 7% 22% 7% 6% 5% Health Insurance Market Share on GWP Basis 16% 14% 15% 1% 1% 2% 8% 7% 9% H1 48% H1 46% H1 45% 2019
Slide 12: Total Insurance Market
Total Insurance Market Lower profitability due to deteriorated Contribution levels despite significant growth in investment returns & lower expenses In SAR M GWP Loss Ratio Contribution Operating Income Investment Income Net Profit +6.2% +6.5pps +48.1% -26.6% -113.6% -51.7% 32,128 6,344 1,035 950 1,
Slide 13: Health Insurance Market
Health Insurance Market LR deterioration due to claims deferral and price increase challenges, resulting in lower Contribution In SAR M GWP Earned Premiums Loss Ratio Contribution +6.7% +3.7% -17.6% 18,869 16,995 87.1% 3,230 16,385 +5.1pps 17,698 17,689 15,515 85.4% 81.2% 2,662 80.3% 82.8% 7,779 9,2
Slide 14: Non-health Insurance Market
Non-health Insurance Market Increased LR in both motor and other segments resulted in significant drop in Contribution In SAR M Motor Segment Other Segments(1) Market Share 7% 7% 8% 21% 21% 17% 4% 5% 6% 4% 22% 4% 9m 2019 9m 2020 23% 9m 2021 24% 9m 20193% 5% 9m 2020 9m 2021 7% 63% 7% 67% 64% 68% 71%
Slide 15: Health Insurance Market – GWP Segmentation
Health Insurance Market – GWP Segmentation Bupa Arabia continues to be the preferred health insurer for corporates and SMEs In SAR M Corporates(1) Medium Enterprises(2) Small Enterprises(3) Micro Enterprises(4) Individuals/Retail +11.1% +7.5% -57.5% -4.6% +3.6% 6.2% 495 14,106 2,520 1,355 896 2,470
Slide 16: Loss Ratio & Technical Reserves
Loss Ratio & Technical Reserves Bupa Arabia continues to report healthy LR and consistent reserves ratio Loss Ratio Bupa Arabia Tawuniya Medgulf AlRajhi Takaful 118.1% 99.0% 97.6% 96.6% 90.3% 87.4% 85.6% 83.5% 87.7% 81.5% 81.2% 78.1% 82.8% 82.9% 78.6% 74.9% 9m 2018 9m 2019 9m 2020 9m 2021 9m 2018 9m
Slide 17: Market Outlook
Market Outlook INTERNAL
Slide 18: Saudi Health Insurance Market Trends (1/2)
Saudi Health Insurance Market Trends (1/2) Insured lives decreased by 2.5% (c.243K) by January 2021 driven by expat departures in ‘000 Total Insured Lives Total Lives – Split by Saudis & Expats (in ‘000) -10% -4% 0% 10.261 -2.5% 6,828 9.810 6,137 9.567 3,433 3,430 9m 2020 9m 2021 Saudi Lives - Total
Slide 19: Saudi Health Insurance Market Trends (2/2)
Saudi Health Insurance Market Trends (2/2) Expat departure slowed down in 2021 coupled with soft Saudi employment Saudis (in ‘000) +327K -133K +45K +445K 3,518 3,385 3,400 3,426 3,460 3,430 3,457 3,484 3,318 3,310 3,325 3,380 3,191 2,746 Jan-18 Jan-19 Jan-20 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21
Slide 20: Gap & Enforcement Explained
Gap & Enforcement Explained Gaps remain in the private sector with ~712K primary Saudis and ~1.2M primary Expats without PMI Saudis (in ‘000) 2,135 2,066 1,842 1,779 1,763 1,760 1,750 1,734 1,719 1,704 1,700 1,701 1,717 -33% 1,671 1,687 1,671 1,671 1,678 -21% -23% -43% -100% 1,242 1,176 1,385 1,423
Slide 21: Future Growth Opportunities in Health Insurance
Future Growth Opportunities in Health Insurance Potential addition of ~SAR 33B in GWP by 2025 mainly due to Inflation & Article 11 impact, and Vision 2030 assumptions Total Organic PMI GWP Potential (in SAR M) 55,830 12,237 1,365 2,936 4,847 1,862 1,279 8,581 22,723 2020 Inflation & Article 11 (1) U
Slide 22: Other Highlights
Other Highlights INTERNAL
Slide 23: PMI Market Challenges
PMI Market Challenges Current PMI market realities and changing regulatory landscape with unprecedented cost implications Current Market Realities Deteriorating “ 9.2M 20.9% Without Covid-19 With Covid-19 19.2% Shrinking LR are up for leading Ongoing 6.1M Widening payers, meaning PMI market with 10.
Slide 24: Insurance Sector’s Collection & Cashflow Analysis
Insurance Sector’s Collection & Cashflow Analysis Collection proxy reflects abnormality of last year’s performance, while one-off transactions impact cashflow In SAR M 1,500 ∆ Cashflow from Operating Activities Tawuniya Saudi Re 160 Allianz SF 140 120 Al-Etihad 100 AL ALAMIYA 80 Alinma Tokio M 60 40
Slide 25: Business & Regulatory Highlights
Business & Regulatory Highlights Many reforms are being undertaken by the Kingdom that support the insurance sector and is in line with it’s 2030 vision Bupa Arabia announces it has received the no objection of the Saudi Central Bank to establish (“Bupa Arabia Ventures”), to participate and invest i
Slide 26: Achievements & Awards
Achievements & Awards Bupa Arabia has been recognized with multiple awards in 2021, including the LinkedIn Talent Awards for MENA region LinkedIn Talent Awards for 2021 MENA Region Best Employer Brand (500 - 2,000 Employees) CIPD Middle East People Awards Employer of choice 2021 Best Employee Engage
Slide 27: Q&A Speakers
Q&A Speakers: Nader Ashoor Ali Sheneamer Ahmed Bajunaid Mohsen Jawhar Chief Financial Officer Chief Business Development Officer Director Head Asset Management & Business Advisory Business Advisory & Investor Relations INTERNAL
Slide 28: Thank you
Thank you pepe lugy bith you for better health INTERNAL,
Slide 29: Appendix
Bupa | Appendix INTERNAL.
Slide 30: Board of Directors & Chief Executive Team
Board of Directors & Chief Executive Team INTERNAL
Slide 31: Board of Directors
Board of Directors Engr. Loay Hisham Nazer David Martin Fletcher Martin Houston Dr. Abdulla Elyas Huda M. Bin Ghoson Chairman Vice-Chairman Board Member Board Member - Independent Board Member - Independent Ziad Algwaiz Nigel Sullivan Tal Hisham Nazer Nader Ashoor Board Member - Independent Board Me
Slide 32: Chief Executive Team
Chief Executive Team Nader Ashoor Ali Sheneamer Chief Financial Officer Chief Business Development Officer Tal Hisham Nazer Chief Executive Officer Tariq Alamoudi Mohamed El Missaoui Atef Mufti Chief Human Resources Officer Chief Operations Officer Chief Sales Officer Q3 2021 – Earnings Conference C
Slide 33: Accounting Standards
Accounting Standards INTERNAL
Slide 34: Premium Deficiency Reserve & Deferred Acquisition Cost Accounting Standards
Premium Deficiency Reserve & Deferred Acquisition Cost Accounting Standards PDR is a regulatory requirement (US GAAP and other regulations) set to cover the additional emerging losses when the Unearned Premium Reserve (UPR) is deemed not sufficient to cover the unexpired policies’ reserve runoff. Re
Slide 35: Abbreviations & Glossary
Abbreviations & Glossary INTERNAL
Slide 36: Abbreviations
Abbreviations BDP Bad Debt Provision CCHI Council Of Cooperative Health Insurance CIPD Chartered Institute of Personnel Development CMA Capital Market Authority CMT Crisis Management Team CR Commercial Registration EBT Earnings Before Tax G&A General And Administrative Expenses GAZT General Authorit
Slide 37: Glossary of Terms
Glossary of Terms Understanding our Financial Statements A customer buys a one-year medical insurance policy for SR 5,000 on July 1, 2020. The coverage ends on June 30, 2021. The annual reporting period for the business in this example is for the year ended Decemb er 31, 2020. A Gross written premiu
Slide 38: Glossary of Terms
Glossary of Terms F Gross claims paid 1825 The actual amount of all paid claims on behalf of the customers. There are two types of claims; 1. Provider claims on direct billing and to be refunded to the customer 2. Reimbursement claims requested by the member A claim is a request for payment received
Slide 39: Glossary of Terms
Glossary of Terms J Net claims incurred 2000 H+I All payment requests received from hospitals or members to pay for a certain service or projected to be received for the duration of the earned portion of the contract (July 1, 2020, to Dec 31, 2020) K Underwriting result 475 E-J The surplus of net ea
Slide 40: Glossary of Terms
Glossary of Terms Understanding Bupa Arabia’s Balance Sheet Goodwill Goodwill represents the intangible asset which resulted from the Bupa Arabia purchase of the Saudi Health insurance portfolio from Bupa Middle East Limited E.C. in accordance with the assessment by SAMA and the prescribed SAMA guid
Slide 41: INTERNAL
Pepe. lugy bith you for better health INTERNAL.