Bupa Arabia For Cooperative Insurance Co. · TADAWUL:8210
Bupa Arabia For Cooperative Insurance — Bupa Arabia — Q2 2017 Earnings Presentation
34 slides from Bupa Arabia For Cooperative Insurance's earnings presentation, 2017
Slide 1: Bupa Arabia Q2 2017 Performance Update
Bupa Arabia Q2 2017 Performance Update
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
Agenda Sell Side Research Analyst Coverage 3 Saudi Insurance Market 5 Bupa Arabia Performance Overview 11 Competitive Positioning 20 Q2 2017 Performance Update 3
Slide 4: Sell Side Research Analyst Coverage
Sell Side Research Analyst Coverage Company Analyst Recommendation Price (SR) Shuaa Capital Shadi Salman Hold 128 Renaissance Capital Balram Ramesh Hold 132 Aljazira Capital Co Talha Nazar Overweight 138 HSBC Ankur P Agarwal Buy 142 CI Capital Monsef Morsy Overweight 146 Arqaam Capital Limited Jaap
Slide 5: Agenda
Agenda Sell Side Research Analyst Coverage 3 Saudi Insurance Market 5 Bupa Arabia Performance Overview 11 Competitive Positioning 20 Q2 2017 Performance Update 5
Slide 6: Saudi Insurance Demographics
Saudi Insurance Demographics Saudis Expats 20.06 13.34 Total Population 33.40 mn Expats 2.70 Saudis Expats 5.03 10.64 Saudis 15.03 Private Insurance Mandate Public Coverage (addressable market) 17.73 mn 15.67 mn Domestic Expats Gov. Helpers1 Saudis 0.93 Employees 2.31 2.52 Gov. 11.54 Others Employee
Slide 7: Market GWP Growth - Health Insurance Market
Market GWP Growth - Health Insurance Market Year on Year 36% 34% 27% 29% 25% 26% 20% 18% 9% 7% 7% 6% 2% 4% 2% -8% -11% -2% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2013 2013 2013 2013 2014 2014 2014 2014 2015 2015 2015 2015 2016 2016 2016 2016 2017 2017 Rolling 12 month 22% 21% 16% 8% -
Slide 8: Health Segment Performance
Health Segment Performance Market Performance (SR mn) Market Share Breakdown H1 2016 H1 2017 10,053 Others Others 9,794 17% 18% 8,975 Al Rajhi Al Rajhi Bupa Takaful Bupa 7,458 Takaful Arabia 2% Arabia 1% 43% 41% Medgulf Medgulf 15% 12% Tawuniya Tawuniya GWP NWP NEP Claims 23% 28% Health Segment GWP
Slide 9: All Insurance Lines Performance (SR mn)
All Insurance Lines Performance (SR mn) All Lines Net Income (Pre-Zakat/Tax) H1 2017 All Lines Income: Net of Unrealized Gains/Losses 840 719 562 20 81 256 409 208 305 329 606 177 182 101 75 33 201 56 307 113 42 Bupa Arabia Tawuniya MedGulf Al Rajhi Others Total -552 -4 Takaful -510 Bupa Arabia Tawu
Slide 10: Total Insurance Market in GWP Terms
Total Insurance Market in GWP Terms Total Insurance Market Share Al Rajhi H1 2016 Al Rajhi H1 2017 Takaful Takaful 5% 9% Others Others 45% Medgulf Medgulf 42% 10% 8% Tawuniya Tawuniya Bupa Bupa 19% 20% Arabia Arabia 21% 20% Total Insurance Market 2013 2014 2015 2016 Q2 2016 Q2 2017 H1 2016 H1 2017 P
Slide 11: Agenda
Agenda Sell Side Research Analyst Coverage 3 Saudi Insurance Market 5 Bupa Arabia Performance Overview 11 Competitive Positioning 20 Q2 2017 Performance Update 11
Slide 12: Key Financial Metrics
Key Financial Metrics YoY YoY (SR mn, unless otherwise indicated) Q2 2016 Q2 2017 H1 2016 H1 2017 variance variance GWP 1,828 1,848 1% 4,274 4,101 -4% Net Earned Premium (NEP) 1,864 1,909 2.4% 3,746 3,786 1% Contribution 353 387 10% 631 595 -6% Loss Ratio1 81.1% 79.7% -1.4pps 83.2% 84.3% 1.1pps Oper
Slide 13: Underlying Performance
Underlying Performance (SR mn) H1 2013 H1 2014 H1 2015 H1 2016 H1 2017 Operating (Loss) Profit (29) 11 150 160 130 Investment & Other Income 12 18 13 47 81 Bad Debt Provision (BDP) (9) (12) (13) (29) (29) Non-Recurring Items 8 0 0 0 0 Earnings before Zakat & Tax (EBT) (18) 17 150 177 182 Operating P
Slide 14: Cost Structure as % of NEP
Cost Structure as % of NEP (SR mn) H1 2013 H1 2014 H1 2015 H1 2016 H1 2017 Commissions 2.4% 2.9% 2.4% 2.4% 2.6% Levies/Brand Fees 2.4% 2.5% 2.1% 2.0% 1.9% Marketing/Fulfillment 1.5% 0.8% 0.6% 0.5% 0.6% Total Acquisition Cost 6.2% 6.2% 5.1% 4.9% 5.1% Staff Cost 7.5% 6.5% 5.2% 5.3% 5.0% Other Expenses
Slide 15: Balance Sheet Summary (SR mn)
Balance Sheet Summary (SR mn) Assets Breakdown Working Capital / Shareholders’ Equity 6,000 6,000 5,395 5,395 5,018 109 5,018 98 83 5,000 5,000 4,303 98 4,303 70 2,045 1,675 98 4,000 4,000 1,192 2,725 3,000 3,000 2,725 54 98 5,188 4,837 748 2,000 4,135 2,000 3,343 3,350 3,111 2,573 1,000 1,000 1,977
Slide 16: Balance Sheet Summary (SR mn)
Balance Sheet Summary (SR mn) Assets Breakdown Working Capital / Shareholders’ Equity 5,798 5,798 91 5,395 5,395 98 109 98 2,027 2,045 5,610 5,188 3,771 3,350 Dec 16 Jun 17 Dec 16 Jun 17 Cash & Investments Goodwill Fixed Assets Working Capital Shareholders' Equity Q2 2017 Performance Update 16
Slide 17: GWP Trend (SR mn)
GWP Trend (SR mn) Quarterly/Yearly GWP growth 7,939 7,328 5,740 3,177 2,121 2,079 1,891 2,257 2,446 2,579 2,253 1,848 1,421 1,377 1,828 825 876 903 821 1,100 1,086 574 Q1 Q2 Q3 Q4 FY13 Q1 Q2 Q3 Q4 FY14 Q1 Q2 Q3 Q4 FY15 Q1 Q2 Q3 Q4 FY16 Q1 Q2 2,000 1,800 1,891 1,828 1,848 • GWP grew at a CAGR of 21%
Slide 18: NEP Trend (SR mn)
NEP Trend (SR mn) Quarterly/Yearly NEP growth 7,667 6,739 4,595 2,604 1,514 1,649 1,765 1,812 1,882 1,864 1,939 1,982 1,876 1,909 881 996 1,316 1,402 532 595 703 775 Q1 Q2 Q3 Q4 FY13 Q1 Q2 Q3 Q4 FY14 Q1 Q2 Q3 Q4 FY15 Q1 Q2 Q3 Q4 FY16 Q1 Q2 2,500 • NEP grew at a CAGR of 34% for the period Q2 2013 – Q
Slide 19: Contribution Trend (SR mn)
Contribution Trend (SR mn) Quarterly/Yearly Contribution growth 1,528 1,489 946 510 608 540 339 317 334 375 278 353 318 387 174 179 114 176 211 207 70 87 Q1 Q2 Q3 Q4 FY13 Q1 Q2 Q3 Q4 FY14 Q1 Q2 Q3 Q4 FY15 Q1 Q2 Q3 Q4 FY16 Q1 Q2 Contribution 450 85.4% Loss Ratio 86.0% • Q2 contribution is 10% higher
Slide 20: Agenda
Agenda Sell Side Research Analyst Coverage 3 Saudi Insurance Market 5 Bupa Arabia Performance Overview 11 Competitive Positioning 20 Q2 2017 Performance Update 20
Slide 21: Bupa Arabia - Past, Present and Future
Bupa Arabia - Past, Present and Future The Past: A Health Insurance • One of the first health insurers in KSA • A leader in the fight for enforcement of expatriate health cover Pioneer in KSA • Superior service and real differentiation for customers The Present: • The most efficient in a growing mar
Slide 22: What We've Achieved, Financially
What We’ve Achieved, Financially 7,939 7,328 GWP Growth (SR mn) • BUPA Middle East (BME) was incorporated in 5,740 1997 as a JV between Bupa Group and Nazer Group • In 1999, a Royal decree mandated PMI for non- 3,177 Saudis 1,993 2,198 • In 2006 this was linked to visa renewal, igniting 1,610 1206 4
Slide 23: Achievements & Awards
Achievements & Awards Our services have set industry standards We have been recognized by various organizations for our value added benefits to our customers in 2016 • “Best Corporate Company for Investor Relations” by Investor Relations Awards • “Insurance company of the Year” by Arabian Business •
Slide 24: The Bupa Arabia Strategy
The Bupa Arabia Strategy Bupa Arabia is the greatest healthcare company in the Arab world. It is designed to deliver on its purpose. When it touches you, whether you are an employee, a customer or a community member, you will live a longer, healthier, happier life. We have written history. A healthc
Slide 25: Investment in Competitive Advantages
Investment in Competitive Advantages Experienced Management Key Business Achievements: Team and Staff Strong Brand & Customer • Sraco Company (2017) Social Service Culture • SADARA Chemical Company (2017) Responsibility • Alsalam Aerospace Industries (2017) • Alkhorayef for Power and Water Technolog
Slide 26: What We've Achieved in Customer Service
What We’ve Achieved in Customer Service A change in the way the market views customer service Moving from “Health Insurer” to “Healthcare Customer Satisfaction & NPS 91% Partner” through innovative initiatives: 84% 86% 86% 67 78% 72% 58 • Up Your Service Passion: enhance service 70% mindset and oper
Slide 27: Bupa Group - International Strength
Bupa Group - International Strength Total Countries sold to: 190 Insurance businesses Total Revenue: £11.0bn (for 2016) Provision businesses Total employee headcount 84K Integrated health services United Kingdom Bupa Health & Wellbeing UK Care Services Bupa Home Healthcare China Cromwell Hospital Re
Slide 28: We're Better, Because of Our World Class Service
We’re Better, Because of Our World Class Service World Class Customer Service • We transformed our call centre into a medical call centre by embedding doctors and nurses • We have the best customer care and VIP unit handling end to end issue resolution • We have our own command centre to monitor the
Slide 29: Tebtom: Surrounding you with Care
Tebtom: Surrounding you with Care A set of unprecedented and unique healthcare services that transcend regular healthcare coverage Q2 2017 Performance Update 29
Slide 30: Superior Claims Management - Capabilities
Superior Claims Management - Capabilities 50+ Doctors @ 30+ hospitals Bupa One Local Access to Hospital records/ members Medical guidelines Global www.uptodate.com partner 24/7 Pre-auth www.nice.org insight Claims e-integration Leading IT Automated validations & Better prices & Risk rules managment
Slide 31: Point of Care
Point of Care Own the Customer Experience at Point of Care • Stationed and roving • Onsite PA staff delegates offering ensures quick proactive help to request approvals members • HCO Female Doctor • Roving Bupa providing onsite Doctors also coaching especially for ensures quality hospitalized member
Slide 32: Point of Care
Point of Care Our Latest Differentiation Driver Q2 2017 Performance Update 32
Slide 33: Market Context - 2017 Focus
Market Context - 2017 Focus MACRO ECONOMIC ENVIRONMENT • Oil prices; impact on GDP and company workforce growth • Cost of living increases; impact on affordability and hospitals costs • Investment returns (SAIBOR rates) whilst balancing admissibility constraints Customers CUSTOMERS • Enhancing our p
Slide 34: THANK YOU
THANK YOU Bupa Arabia Business Advisory & Investor Relations Tel: +966 920 000 456 Ext: 5414 ba.bair@bupa.com.sa www.bupa.com.sa