34 slides from Bupa Arabia For Cooperative Insurance's earnings presentation, 2016
Slide 1: Bupa Arabia 1H 2016 Performance Update
Bupa Arabia 1H 2016 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 and Health Segment 5 Bupa Arabia Performance Overview 12 Competitive Positioning 21 3
Slide 4: Sell Side Research Analyst Coverage
Sell Side Research Analyst Coverage Company Analyst Recommendation Price (SR) EFG-Hermes Murad Ansari Buy 155.0 Renaissance Capital Balram Ramesh Buy 169.7 HSBC Ankur P Agarwal Buy 174.0 Arqaam Capital Jaap Meijer Buy 166.5 Aljazira Capital Co Talha Nazar Overweight 137.6 CI Capital Monsef Morsy Ove
Slide 5: Agenda
Agenda Sell Side Research Analyst Coverage 3 Saudi Insurance Market and Health Segment 5 Bupa Arabia Performance Overview 12 Competitive Positioning 21 5
Slide 6: Private Medical Insurance Market Potential
Private Medical Insurance Market Potential Saudis Expats Saudis 3.14 mn Expats 10.41 mn 9.06 mn 5.64 mn Expats Saudis 7.86 mn 21.11 mn Total Population Mandated: Private Sector Covered 31.52 mn 14.70 mn 11.00 mn Expats 1.35 mn Expats Expats 1.20 mn Saudis 87% 56% Saudis 2.50 mn Saudis 15.47 mn Unins
Slide 7: All Insurance Lines Performance (SR mn)
All Insurance Lines Performance (SR mn) All lines Net Income (Pre-Zakat/Tax) - H1 2015- 2016 H1 2016 All lines Income: Net of Unrealized Gains/Losses 840 47 116 359 194 130 362 219 316 305 324 482 149 25 177 150 45 -4 -40 Tawuniya MedGulf Bupa Arabia Others Total Tawuniya MedGulf Bupa Arabia Others
Slide 8: Gross Written Premium (GWP) – Health Segment
Gross Written Premium (GWP) – Health Segment GWP (SR mn) 2006 … 2010 2011 2012 2013 2014 2015 Q2 2015 Q2 2016 H1 2015 H1 2016 Health Insurance 2.222 8,690 9,802 11,154 12,927 15,789 18,891 4,855 4,444 9,823 9,795 Market Bupa Arabia 367 1,749 1,993 2,194 3,177 5,740 7,328 1,891 1,828 3,971 4,274 Bupa
Slide 9: Market GWP Growth - Health Segment
Market GWP Growth - Health Segment Year on Year 36% 34% 27% 29% 26% 25% 26% 24% 20% 18% 12% 12% 18% 8% 15% 11% 9% 2% 7% 7% 4% -8% Rolling 12 months 22% 21% 16% 7% Q2 2013 Q2 2014 Q2 2015 Q2 2016 9
Slide 10: Market Share in GWP – Health Segment
Market Share in GWP – Health Segment Q2 2014 Q2 2015 Q2 2016 Others Others Others 16% Bupa Arabia Bupa Arabia Bupa Arabia 18% 21% 41% 36% 39% MedGulf MedGulf 14% 18% MedGulf 24% Tawuniya Tawuniya 22% 22% Tawuniya 28% • The health insurance sector GWP for Q2 2016 is SR4.44 billion compared to SR4.86
Slide 11: Contribution – Health Segment (SR mn)
Contribution – Health Segment (SR mn) 1,866 1,331 H1 2015 H1 2016 631 672 545 353 415 381 148 52 Bupa Arabia Tawuniya MedGulf Others Total Growth = 16% 18% 185% 76% 40% H1 2016 Breakdown by Player Others Bupa 36% Arabia 34% MedGulf Tawuniya 8% 22% Source: respective insurance companies’ Q2 2016 fili
Slide 12: Agenda
Agenda Sell Side Research Analyst Coverage 3 Saudi Insurance Market and Health Segment 5 Bupa Arabia Performance Overview 12 Competitive Positioning 21 12
Slide 13: Key Financial Metrics
Key Financial Metrics (SR mn, unless otherwise indicated) Q2 2016 Y/Y H1 2016 Y/Y GWP 1,828 -3% 4,273 8% Net Earned Premium (NEP) 1,864 13% 3,746 18% Contribution 353 6% 631 16% Loss Ratio1 81% 2% 83% 0.5% Expenses 273 29% 482 23% Earnings before Zakat & Tax 104 -8% 177 18% EPS (SR) 1.31 -8% 2.22 19
Slide 14: Underlying Results H1 2012-2016
Underlying Results H1 2012-2016 (SR mn) 2012 2013 2014 2015 2016 Underlying Trading Results (17.7) (28.8) 11.2 150.2 159.7 Investment Income & Other income 10.5 11.7 18.2 13.2 46.6 Bad Debt Provision (BDP) 14.6 (9.1) (12.3) (13.4) (29.4) Non-Recurring Items - 8.0 - - - Pre Zakat/Tax Reported Result
Slide 15: Cost Structure - % of NEP
Cost Structure - % of NEP (SR mn) H1 2014 H1 2015 H1 2016 Commissions 2.9% 2.4% 2.4% Levies/ Brand Fees 2.5% 2.1% 2.0% Marketing/ Fulfillment 0.8% 0.6% 0.5% Total Acquisition Cost 6.2% 5.1% 4.9% Staff Cost 6.5% 5.2% 5.3% Other Expenses 2.1% 1.7% 1.9% Total Expenses (Excluding Co-op Distribution & BD
Slide 16: Balance Sheet Summary Q2 2013-2016 (SR mn)
Balance Sheet Summary Q2 2013-2016 (SR mn) Assets Working Capital + Shareholders’ Equity 83 98 70 98 1,675 1,192 54 98 4,837 748 45 4,135 98 3,342 573 3,111 2,573 1,977 1,716 1,285 Q2 2013 Q2 2014 Q2 2015 Q2 2016 Q2 2013 Q2 2014 Q2 2015 Q2 2016 Cash & Investments Goodwill Fixed Assets Working Capita
Slide 17: Balance Sheet Summary Dec 2015 vs Jun 2016 (SR mn)
Balance Sheet Summary Dec 2015 vs Jun 2016 (SR mn) Assets Working Capital+ Shareholders’ Equity 5,226 5,226 5,018 77 98 1,667 1,675 5,018 83 98 5,051 3,560 3,342 4,837 2015 Q2 2016 2015 Q2 2016 Cash & Investments Goodwill Fixed Assets Working Capital Shareholders' Equity 17
Slide 18: GWP Trend (SR mn)
GWP Trend (SR mn) 7,328 5,740 3,177 2,194 2,121 2,079 1,891 2,257 2,446 1,828 1,421 1,377 1,100 564 825 876 903 574 821 467 352 Q2 Q3 Q4 2012 Q1 Q2 Q3 Q4 2013 Q1 Q2 Q3 Q4 2014 Q1 Q2 Q3 Q4 2015 Q1 Q2 Q2 GWP Y/Y Growth • GWP CAGR is 28% for period Q2 2013 – Q2 2016 1,891 1,828 • Q2 GWP declined by 3%,
Slide 19: NEP Trend (SR mn)
NEP Trend (SR mn) 6,739 4,595 2,604 2,128 1,882 1,864 1,316 1,402 1,514 1,649 1,765 1,812 595 703 775 881 996 529 533 554 532 Q2 Q3 Q4 2012 Q1 Q2 Q3 Q4 2013 Q1 Q2 Q3 Q4 2014 Q1 Q2 Q3 Q4 2015 Q1 Q2 Q2 NEP Y/Y Growth 1,864 1,649 • NEP CAGR is 46% for period Q2 2013 – Q2 2016 • Q2 NEP grew by 13% 996 5
Slide 20: Contribution Trend (SR mn)
Contribution Trend (SR mn) 1,528 946 510 608 427 339 334 375 353 317 278 163 119 174 179 114 176 211 86 70 87 Q2 Q3 Q4 2012 Q1 Q2 Q3 Q4 2013 Q1 Q2 Q3 Q4 2014 Q1 Q2 Q3 Q4 2015 Q1 Q2 Q2 Contribution Growth Q2 Loss Ratio 353 85.4% 334 82.3% 81.1% 176 79.8% 87 Q2-13 Q2-14 Q2-15 Q2-16 Q2-13 Q2-14 Q2-15 Q
Slide 21: Agenda
Agenda Sell Side Research Analyst Coverage 3 Saudi Insurance Market and Health Segment 5 Bupa Arabia Performance Overview 12 Competitive Positioning 21 21
Slide 22: Bupa Arabia - Past, Present and Future
Bupa Arabia - Past, Present and Future The Past: • One of the first health insurers in KSA A Health Insurance • A leader in the fight for enforcement of expatriate health cover Pioneer in KSA • Superior service and real differentiation for customers The Present: Leading the Health • The most efficie
Slide 23: What We’ve Achieved, Financially
What We’ve Achieved, Financially 7,328 5,740 • BUPA Middle East (BME) was incorporated in GWP Growth (SR mn) 1997 as a JV between Bupa Group and Nazer Group 3,177 • In 1999, a Royal decree mandated PMI for non- Saudis 1,9932,198 • In 2006 this was linked to visa renewal, igniting 1,610 1206 871 indu
Slide 24: What We’ve Achieved, Industry Awards
What We’ve Achieved, Industry Awards Our services have set industry standards We have been recognized by various organizations for our value added benefits to our customers 2006 2007 2008 2009 • Best medical insurer, Jeddah Chamber • 8th Best company to work for, Saudi • E-business Award, Middle Eas
Slide 25: 2020: Our Intent and Goals
2020: Our Intent and Goals 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 healt
Slide 26: Investment in Competitive Advantages
Investment in Competitive Advantages Experienced Management Key Business Wins: Team and Staff • Nesma and Partners Contracting Co. (Oct 2015) Strong Brand & Social Customer Service Culture • Al Rajihi Bank (Jan 2014) Responsibility • Abdullatif Jamil Group (Jan 2014) • The Savola Group-Panda (Jan 20
Slide 27: Bupa Group - International Strength
Bupa Group - International Strength Total Countries sold to: 190 Total Revenue: £ 9.8 bn(As of Dec Insurance businesses 2015). Total employee headcount 84K. Provision businesses Integrated health services United Kingdom Bupa Health & Wellbeing UK Care Services Bupa Home Healthcare China Cromwell Hos
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 Tebtom program- a set of unprecedented and unique healthcare services that transcend regular healthcare coverage 29
Slide 30: World Class Service – Customer Satisfaction
World Class Service – Customer Satisfaction Customer Satisfaction Our NPS Score 84% 87% 69% 72% 72% 60% 46% 34% 2011 2012 2013 2014 2015 2014 2015 Q1 2016 Bupa Arabia has managed to increase its customer We have implemented the Net Promoter satisfaction level while growing its customer base Score (N
Slide 31: 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 32: Our Professional and Consistent Risk Management
Our Professional and Consistent Risk Management Reported Loss Ratio 2011 2012 2013 2014 2015 2011-2015 Bupa Arabia 80.4% 79.9% 80.4% 79.4% 77.3% 78.9% Tawuniya 71.7% 90.1% 107.9% 81.9% 77.3% 86.5% MedGulf 76.4% 87.8% 107.1% 85.7% 90.6% 90.3% Source: respective insurance companies’ filings 32
Slide 33: Market Context - 2016 Focus
Market Context - 2016 Focus MACRO ECONOMIC ENVIRONMENT • Oil prices; Impact on GDP • Cost of living increases; impact on affordability and hospitals costs • Raising investment returns (yields improving) whilst balancing admissibility constraints Customers CUSTOMERS • Enhancing our proposition and se
Slide 34: THANK YOU
THANK YOU