Bupa Arabia For Cooperative Insurance Co. · TADAWUL:8210
Bupa Arabia For Cooperative Insurance — Bupa Arabia — Q2 2021 Earnings Presentation
42 slides from Bupa Arabia For Cooperative Insurance's earnings presentation, Sep 8, 2021
Slide 1: Bupa Arabia Q2 2021 Earnings Conference Call & Webcast
Bupa Arabia Q2 2021 – Earnings Conference Call & Webcast September 8th, 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 H1 2021 earnings dropped by 10% as a result of LR deterioration by 5 pps YoY In SAR M GWP Contribution +1.9% -30.0% 5,713 5,822 1,251 5,344 -42.1% +14.6% 896 875 BDP % of Receivables 781 2,439 2,570 2,243 503 519 10.3% 10.0% 7.8% Q2 2019 Q2 2020 Q2 2021 H1 2019 H1 2020 H1 2021 Q2 2019 Q2 2020 Q2
Slide 9: EBT
EBT EBT declined as a result of LR deterioration from abnormal levels in 2020 (Covid-19 impact) In SAR M EBT Change between H1 2020 & H2 2021 -10.5% 568.7 Change in Contribution: -SAR 375.2M 28.9 12.0 509.0 -302.0 274.7 -73.2 H1 2020 Earned Premium Claims Incurred Expenses Investment & Other Income
Slide 10: Investment Portfolio and Results
Investment Portfolio and Results Resilient investment income through increased duration & further diversification In SAR M Investment Income Asset Allocation SAR 6.6B SAR 8.1B SAR 8.8B +20.4% 134 72% 71% 68% 119 111 7% 8% 6% 19% 18% 21% 2% 3% 5% 74 H1 2019 H1 2020 H1 2021 62 50 Portfolio Size Deposi
Slide 11: Market Share & Positioning
Market Share & Positioning Bupa Arabia maintains market leadership as of H1 2021 Total Insurance Market Share on GWP Basis 26% 27% 26% 38% 35% 38% H1 H1 H1 2019 2020 2021 22% 24% 23% 7% 7% 7% 7% 7% 6% Health Insurance Market Share on GWP Basis 16% 14% 14% 1% 1% 3% 7% 8% 8% H1 45% H1 46% H1 46% 2019
Slide 12: Total Insurance Market
Total Insurance Market Lower profitability due to deteriorated LR & contribution levels despite significant growth in investment returns & lower expenses In SAR M GWP Loss Ratio Contribution Investment Income Net Profit +4.1% -34.7% +45.7% -42.9% +9.9pps 22,259 4,632 631 1,259 21,387 81.1% 1.00 80.8
Slide 13: Health Insurance Market
Health Insurance Market LR deterioration due to claims deferral, resulting in lower contribution for health In SAR M GWP Earned Premiums Loss Ratio Contribution +2.8% +1.3% -31.4% 12,804 10,916 11,058 89.0% 2,349 12,455 11,889 10,186 +6.9pps 82.6% 85.4% 5,822 5,067 82.7% 5,713 5,369 91.7% 1,251 5,34
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 6% 7% 7% 23% 21% 16% 4% 6% 6% 4% 21% H1 2019 H1 2020 22% H1 2021 23% H1 2019 H1 2020 4% H1 2021 8% 2% 5% 7% 69% 65% 64% 67% 70%
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 +7.1% -50.4% +1.3% 9,640 1,863 905 -2.1% 549 322 +6.4% 2.5% 8 8,997 5.
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 139.2% 97.9% 100.0% 96.4% 91.7% 87.7% 88.3% 83.5% 82.6% 76.7% 82.7% 81.6% 80.4% 73.3% 72.5% 70.0% H1 2018 H1 2019 H1 2020 H1 2021 H1 2018 H
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 3% (c.270K) mainly driven by expat dependents departure Total Insured Lives Total Lives – Split by Saudis & Expats -6% -3% +4% 10,428 7,001 10,158 6,603 3,427 3,554 H1 2020 H1 2021 Saudi Lives - Total Expat Lives - Total Total Liv
Slide 19: Saudi Health Insurance Market Trends (2/2)
Saudi Health Insurance Market Trends (2/2) Expat departure has stabilized in 2021 coupled with soft Saudi employment Saudis (in ‘000) +327K +169K -133K +445K 3,518 3,426 3,460 3,517 3,554 3,481 3,510 3,385 3,400 3,191 2,746 Jan-18 Jan-19 Jan-20 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 Jul-21 Aug-21
Slide 20: Gap & Enforcement Explained
Gap & Enforcement Explained Gaps remain in the private sector with ~642K primary Saudis and ~1M primary Expats without PMI Saudis (in ‘000) 2,059 1,842 1,779 1,763 1,760 1,750 1,734 1,719 1,704 1,700 1,701 1,717 1,671 1,687 1,671 1,671 1,678 -31% -18% -24% -41% -43% 1,242 1,417 1,176 1,365 1,378 1,3
Slide 21: Future Growth Opportunities in Health Insurance
Future Growth Opportunities in Health Insurance Potential organic PMI growth to add total of ~SAR 33B in GWP by 2025 due to several drivers and changes in the market 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) Umr
Slide 22: Other Highlights
Other Highlights INTERNAL
Slide 23: 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’s Board of Directors approved the distribution of SAR 408M dividends for FY2020, equivalent to SAR 3.4 per share. Bupa Arabia has recei
Slide 24: Claims Behavior with COVID-19
Claims Behavior with COVID-19 Claims deferral projected to continue to year-end, showing signs of gradual increase due to reduced travel activity Claims Trend – Actual vs. Business Outlook Without Covid-19 With Covid-19 Savings achieved during lockdown are offset by deferrals with uncertain time hor
Slide 25: 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 550 ∆ Cashflow from Operating Activities Tawuniya 500 450 400 350 300 250 200 150 100 Alinma Tokio M Saudi Re 50 ALALAMIYA ALETIHAD
Slide 26: 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 27: Thank you
Thank you res lugs Lith you for better health INTERN, AL
Slide 28: Appendix
Bupa /|_ Appendix INTERNAL
Slide 29: Board of Directors & Chief Executive Team
Board of Directors & Chief Executive Team INTERNAL
Slide 30: 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 31: 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 Q2 2021 – Earnings Conference C
Slide 32: Achievements & Awards
Achievements & Awards INTERNAL
Slide 33: Achievements & Awards
Achievements & Awards Brand Finance 2021 Ranking The strongest brand in Saudi Arabia in 2020 and 2021 Forbes List 2021 Tal Nazer ranked as one of the top 100 CEO in the Middle East 2021 Bupa Arabia is the most valuable insurance company in the Middle East ranked#66 2020 International Business Magazi
Slide 34: Accounting Standards
Accounting Standards INTERNAL
Slide 35: 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 36: Abbreviations & Glossary
Abbreviations & Glossary INTERNAL
Slide 37: Abbreviations
Abbreviations BDP Bad Debt Provision CCHI Council Of Cooperative Health Insurance CMA Capital Market Authority CMT Crisis Management Team CR Commercial Registration EBT Earnings Before Tax G&A General And Administrative Expenses GAZT General Authority for Zakat and Tax GOSI General Organization for
Slide 38: 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 December 31, 2020. A Gross written premium
Slide 39: 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 40: 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 41: 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 42: INTERNAL
res lugs Lith you for better health INTERN, AL