Medibank Private Ltd. · ASX:MPL
Medibank Private — Investor Presentation (February 2022)
35 slides from Medibank Private's investor presentation, Feb 25, 2022
Slide 1: 2022 half year results
2022 half year results Investor presentation David Koczkar – Chief Executive Officer Mark Rogers – Group Executive Chief Financial Officer & Group Strategy 25 February 2022
Slide 2: Important notice
Important notice The information contained in this presentation is general information only. The Such forward‐looking statements involve known and unknown risks, uncertainties and information contained in this presentation is not investment or financial product advice other factors. The nature of su
Slide 3: Highlights
Highlights David Koczkar Chief Executive Officer
Slide 4: 1H22 highlights
1H22 highlights Our focus on our customers and our strategy to grow as a health company is working Experience 46.0 (+8.9) Medibank c. 1.33m (+12.5 ) % c. 170k customers registered for proactive health cover check ins 45.2 (+2.2) ahm My Medibank app, high levels of customer advocacy with c. 31 % grow
Slide 5: 1H22 financial results summary
1H22 financial results summary Our financial performance reflects customer growth momentum and ongoing discipline Customer outcomes +28.1k (+1.5 ) % +4.5k $2.9b (+3.6%) reported net resident reported net resident customer claims1 policyholder growth policyholder growth (6 months) in January 2022 Key
Slide 6: Supporting our customers, people and community through COVID
Supporting our customers, people and community through COVID • c. $105m returned to customers during 1H22 Customers • A further c. $163m to be returned to customers via a 6-month premium increase deferral commencing in April 2022 • Sustained employee engagement through dedicated health and wellbeing
Slide 7: Emerging customer trends are driving our strategy
Emerging customer trends are driving our strategy Australia’s health needs Continued acceleration of Private health playing are evolving consumer health trends a greater role Healthcare is the top and 1 in 3 consumers willing to Significant improvement in increasing concern for spend more on exercis
Slide 8: Our strategy – growing as a health company
Our strategy – growing as a health company Deliver leading Differentiate our Expand experiences insurance business in health Create personalised and Deliver more value, choice Focus growth on prevention connected customer experiences and control for customers and integrated care models Empower our p
Slide 9: Deliver leading experiences
Deliver leading experiences 1H22 achievements 2H22 focus • Enhanced customer digital health experiences: • Further digitisation of health offerings and personalisation with a focus on – Launched online doctor service for overseas mental health and wellbeing students – OSHC Online Doctor • Further ad
Slide 10: Differentiate our insurance business
Differentiate our insurance business 1H22 achievements 2H22 focus • Continued momentum in policyholder growth for both brands, • Our differentiated customer offerings will support acquisition and maintaining our disciplined approach: retention, specifically: – The new to industry segment and younger
Slide 11: Expand in health
Expand in health 1H22 achievements 2H22 focus • c. 64k actions rewarded for participation in Live Better • Further personalisation of Live Better to support customers health and wellbeing health campaigns – COVID vaccination, blood pressure and • Expand and digitise preventative programs including c
Slide 12: Financial results
Financial results Mark Rogers Group Executive – CFO & Group Strategy Image acknowledgment: Wellbeing SA
Slide 13: Group financial summary
Group financial summary Six months ended 31 Dec ($m) 1H21 1H22 Change • Profit before tax down 2.7%: Group revenue from external customers 3,442.2 3,581.2 4.0% – Group operating profit up 12.3% Health Insurance operating profit 254.6 280.9 10.3% – Net investment income down 57.0% Medibank Health seg
Slide 14: COVID-19 impacts – claims recovery
COVID-19 impacts – claims recovery Private hospital claims1 12-month rolling to Nov 21 $ growth vs pre-COVID-19 period2 Total: • Victoria & NSW claims flat due to lockdowns (pcp: -9%) 0% Total • Other states claims +4% (pcp: -4%) 4% • Gap between non-surgical and surgical claims growth remains 3% Su
Slide 15: Health Insurance result
Health Insurance result Operating performance reflects continued strength in the resident portfolio partially offset by overseas decline Six months ended 31 Dec ($m) COVID-19 COVID-19 • Major drivers of performance: 1H21 1H22 Change impact Adj.1 – Strong resident policyholder growth Premium revenue
Slide 16: Health Insurance – policyholders
Health Insurance – policyholders Strong resident policyholder growth of 3.3% in the last 12 months • PHI market remains buoyant: Six months ended 31 Dec ($m) 1H21 1H22 Change – Strong growth in new to industry and younger cohorts Policyholders1 (thousand): – Industry expected to grow by c. 1.3% duri
Slide 17: Health Insurance – underlying resident claims
Health Insurance – underlying resident claims Underlying resident claims growth per policy unit declined to 1.9% Six months ended 31 Dec ($m)1 1H21 1H22 Change Indicative composition & movement $ value in dollar value1 vs. 1H21 movement Claims expense (2,862.3) (2,980.0) 4.1% Risk equalisation (17.8
Slide 18: Health Insurance – underlying portfolio performance
Health Insurance – underlying portfolio performance Strong gross margin performance driven by resident portfolio Resident Overseas Total Six months ended 31 Dec ($m)1 1H21 1H22 Change 1H21 1H22 Change 1H21 1H22 Change Premium revenue 3,355.5 3,518.7 4.9% 78.4 69.9 (10.8%) 3,433.9 3,588.6 4.5% Net ho
Slide 19: Health Insurance – management expenses
Health Insurance – management expenses Benefits of our productivity agenda and scale delivered a 40bps reduction in underlying MER to 6.9% Six months ended 31 Dec ($m) 1H21 1H22 Change Premium revenue 3,324.5 3,452.0 3.8% Management expenses (250.8) (249.1) (0.7%) - Depreciation and amortisation (21
Slide 20: Medibank Health result
Medibank Health result Strong earnings growth despite continued COVID-19 impacts • Modest COVID impact in this period: Six months ended 31 Dec ($m) 1H21 1H22 Change – Travel business affected by closed borders Revenue 145.6 155.7 6.9% – Strong demand for community-based healthcare and Gross profit 6
Slide 21: Investment portfolio and investment income
Investment portfolio and investment income Lower investment income following strong market and manager performance during 1H21 Reported Performance2 Underlying Performance2,3 Six months ended 31 Dec ($m) 1H21 1H22 Change 1H21 1H22 Change Net investment income: Growth portfolio income 44.8 30.0 (33.0
Slide 22: Capital and dividend
Capital and dividend Our strong capital position reflects capital generation and disciplined capital management Period ended ($m) • Health Insurance capital: Dec 2020 Dec 2021 – Ratio at the top end of 11% to 13% target range3 Total equity1 1,848.5 1,937.7 – Increase supports premium revenue growth
Slide 23: Key areas of focus for FY22
Key areas of focus for FY22 Resident PHI: Non-resident PHI: Medibank Health: • Continued top line revenue growth • Well placed for reopening of borders • Maintain strong organic growth focus • Focus on ahm retention, corporate • Benefit from new university • Recover and grow travel insurance market,
Slide 24: Conclusion
Conclusion David Koczkar Chief Executive Officer
Slide 25: The best health and wellbeing for Australia
The best health and wellbeing for Australia Putting customers at the centre of health Action is required to address long-term issues in health • Almost 1 in 2 Australians live with a chronic condition,1 with over 1/3 of the disease burden potentially preventable2 • Australia is behind in adoption of
Slide 26: Key points
Key points Health is a key issue that concerns people in Australia Providing leading experiences Growth in our core business remains We will continue to invest and to customers, our people and a priority and we are well-positioned partner to meet the changing needs the community is fundamental throu
Slide 27: FY22 outlook
FY22 outlook Customer We continue to assess claims activity and any permanent net claims savings due to relief COVID-19 will be given back to customers through additional support in the future Policyholder Aiming to achieve 3.1-3.3% policyholder growth1 in FY22, growth including continued growth in
Slide 28: Appendix
Appendix
Slide 29: Enabling the best health and wellbeing through embedding sustainability in our business
Enabling the best health and wellbeing through embedding sustainability in our business Better Health for Better Lives It is through our continued social focus to improve diversity and inclusion and health and wellbeing that we can drive the most change • Doubled the number of preventative health en
Slide 30: Examples of solutions meeting customers' health needs
Examples of solutions meeting customers’ health needs What customers want “I want to be better” “I want to get better” Live Better Short-stay, no-gap programs • A program to motivate and support health and wellbeing • Partnership with specialists and hospitals to provide through resources and apps t
Slide 31: Reconciliation of reported to underlying claims and COVID-19 impacts
Reconciliation of reported to underlying claims and COVID-19 impacts COVID-19 impacts – Health Insurance Reconciliation of reported to underlying claims Six months ended 31 Dec ($m) 1H21 1H22 Six months ended 31 Dec ($m) 1H21 1H22 6mth deferral of April 2020 premium increase 91.9 - Total Reported Cl
Slide 32: Group financial summary – half by half
Group financial summary – half by half Change ($m) 1H21 2H21 1H22 1H22 v 1H21 1H22 v 2H21 Group revenue from external customers 3,442.2 3,468.2 3,581.2 4.0% 3.3% Health Insurance operating profit 254.6 284.0 280.9 10.3% (1.1%) Medibank Health segment profit 18.8 12.6 25.7 36.7% 104.0% Segment operat
Slide 33: Health Insurance policyholders – half by half
Health Insurance policyholders – half by half Change 1H21 2H21 1H22 1H22 v 1H21 1H22 v 2H21 Premium revenue ($m) 3,324.5 3,355.8 3,452.0 3.8% 2.9% 1 Policyholders (thousand): Opening balance 1,806.6 1,855.6 1,889.1 4.6% 1.8% Acquisitions 102.6 118.6 106.2 3.5% (10.5%) Lapses (62.8) (84.6) (78.1) 24.
Slide 34: Investment portfolio
Investment portfolio Average Balance Portfolio Average Balance Target asset As at 31 December 2021 Spot Balance ($m) Portfolio composition ($m) allocation composition Australian equities 123.9 5.7% 121.5 5.1% 5.0% International equities 111.2 5.1% 127.2 5.4% 6.0% Property 177.8 8.1% 171.9 7.2% 7.0%
Slide 35: Glossary
Glossary Term Definition Term Definition 1H Six months ended/ending 31 December of the relevant financial year Overseas Overseas students health cover (OSHC) and Overseas visitors cover (OVC) 2H Six months ended/ending 30 June of the relevant financial year OECD Organisation for Economic Co-operatio
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