Nib Holdings Ltd · ASX:NHF
Nib — FY2022 Earnings Presentation
33 slides from Nib's earnings presentation, Aug 22, 2022
Slide 1: FY2022 full year results
FY2022 full year results 22 August 2022 1
Slide 2: Disclaimer
Disclaimer The material in this presentation is a summary of the results of nib holdings limited (nib) for the 12 months ended 30 June 2022 and an update on nib’s activities and is current at the date of preparation, being 22 August 2022. Further details are provided in nib’s 2022 annual report and
Slide 3: Acknowledgement of Aboriginal and Torres Strait Islander peoples
nib acknowledges Aboriginal and Torres Strait Islander peoples as the First Australians and pays respect to Elders past and present across all the lands on which we operate. We acknowledge the rich and meaningful contribution they make to life and culture in Australia, and we aim to be a partner in
Slide 4: Mark Fitzgibbon
Mark Fitzgibbon Chief Executive Officer & Managing Director
Slide 5: Your better health and wellbeing
Our purpose: Your better health and wellbeing • Deliver deep insight and guidance about how to best achieve personal health and wellbeing goals and manage risk. • Connect with a wide ecosystem of relevant health and wellbeing products, services, programs and providers. • Make it all accessible and a
Slide 6: FY22 highlights
FY22 highlights 70 years Health management of meeting the needs of programs our members ~10,000 members participated Hospital Carbon neutral admissions achieved in FY22 $1.6b paid in hospital claims1 2040 target net carbon zero >375,000 admissions Ancillary visits COVID-19 $450m paid in ancillary su
Slide 7: FY22 Group financial highlights
FY22 Group financial highlights • Uplift in UOP driven by arhi strength and Total Group revenue Group UOP rebound of iihi and travel. 235.3 • arhi policyholder growth of 3.2% with strong 2.8 $2.8b 2.6 $235.3m 204.9 momentum in 4Q22. ▲7.2% • Return to profit in 2H22 for iihi and travel businesses wit
Slide 8: Nick Freeman
Nick Freeman Chief Financial Officer
Slide 9: Group income statement
Group income statement ($m) FY22 FY21 Change Key drivers of result FY22 v FY21 • Strong premium revenue growth due to policyholder increases across Net premium revenue 2,703.4 2,548.8 ▲6.1% arhi, iwhi and nz. Net claims incurred1 (2,085.0) (2,004.9) ▲4.0% • Claims remain subdued given ongoing COVID-
Slide 10: Group gross profit drivers
Group gross profit drivers • Claim impacts from COVID-19 based on updated modelling ($m) FY21 FY22 Movement and as such FY21 has been updated in this analysis. FY21 Group gross profit 563.3 • Strong gross profit increase from policyholder growth of $28.4m. Policyholder growth 28.4 • Lower impact fro
Slide 11: Australian residents health insurance
Australian residents health insurance Change Strong growth momentum and member experience with elevated Financial performance ($m) FY22 FY21 FY22 v FY21 margins to return to target range over longer term Premium revenue 2,286.2 2,174.1 ▲5.2% • Premium revenue ▲5.2% largely due to growth and prior Cl
Slide 12: International inbound health insurance
International inbound health insurance FY22 premium revenue at its highest levels due to strong performance of Change Financial performance ($m) FY22 FY21 our diversified portfolio FY22 v FY21 • Full year UOP result was a loss of $1.1m with a strong finish to the Premium revenue 123.7 115.5 ▲7.1% ye
Slide 13: New Zealand
New Zealand FY22 Change Continuing strong top line growth and consistent gross margin excluding FY22 excl Financial performance ($m) FY22 FY21 • FY22 result includes 2-month impact of new life and living life & living life & living insurance1 v FY21 insurance business1 ($0.1m UOP). Premium revenue 2
Slide 14: nib Travel
nib Travel Change Return to profitability in 2H22 Financial performance ($m) FY22 FY21 FY22 v FY21 • Strong recovery in sales volumes in Q4, leading to return to profitability for Underwriting result (0.3) (0.3) - 2H22 and reducing full year loss to $7.4m. Operating income 46.6 14.0 ▲232.9% • Global
Slide 15: Capital management
Capital management nib Group nib health funds Group capital ($m) FY22 FY21 net tangible assets ($m) net tangible assets ($m) Opening available capital (1 July) 65.7 53.7 372.9 358.9 Sources of capital 45.7 72.5 266.4 256.2 306.9 238.8 279.1 NPAT 133.8 160.5 188.4 236.4 Write down of intangibles alre
Slide 16: Cash flow
Cash flow Change • Strong operating cash driven by top line growth and low cash claims. Consolidated cash flow ($m) FY22 FY21 FY22 v FY21 • Operating cash outflow reflects further claims deferral across the industry resulting in lower risk equalisation payments and an increase in the Operating cash
Slide 17: Roslyn Toms
Roslyn Toms Group Executive Legal & Chief Risk Officer
Slide 18: FY22 sustainability highlights
FY22 sustainability highlights Assisted ~10,000 members to stay healthy through our health management Delivered all outcomes of our Reflect programs including almost 1,000 Māori Reconciliation Action Plan rōpū (Māori group members) Launched a health check (health risk 50% of our brand partnership an
Slide 19: Sustainability – focus areas for FY23 and beyond
Sustainability – focus areas for FY23 and beyond Population • Continue to invest in new group-wide health management programs Health across our clinical focus areas and increase participation • Provide alternative care settings for members as part of our hospital substitution program • Empower membe
Slide 20: Mark Fitzgibbon
Mark Fitzgibbon Chief Executive Officer & Managing Director
Slide 21: Business strategy – Payer to Partner (P2P)
Business strategy – Payer to Partner (P2P) We apply data science and predictive analytics in developing deep insight into the health risk of individuals and how it may be best managed, as well as equip them with integrated digital tools for seamless engagement with us and the healthcare system (pers
Slide 22: nib and the NDIS: market opportunity
nib and the NDIS Market opportunity NDIS participants and funding $59bn $60 1,000 • ~530k participants expected to grow to +800k by Total participant number (‘000s) 859k 900 $50 Total participant costs ($b) 800 FY301. $40 586k 630k 670k 700 502k 530k 600 467k • Total NDIS scheme funding is expected
Slide 23: nib and the NDIS
nib and the NDIS nib ecosystem Our strategy • Specialist team created to pursue opportunity, led by Executive reporting to CEO. Plan Manager • Focus upon plan management and support coordination (not service and support provision). • Enter plan management sector through targeted M&A and platform dev
Slide 24: Adjacent businesses
Adjacent businesses • Delivery of health management programs to over 7,000 • Series A funding completed in July 2022. nib's participants. equity stake is now 63.14%. • Expansion of offering to 12 programs (including • Midnight Health's vision is to develop a whole acquisition of Prima Health Solutio
Slide 25: Outlook
Outlook arhi New Zealand • Net policyholder growth 3-4%. • Net policyholder growth 3-4% for core health • Claims experience expected to remain book. subdued for 1H23. • Continued investment in business systems and • Gradual movement towards net margin target efficiency. of 6-7% over time. • Return t
Slide 26: Questions and answers
Questions and answers CELEBRATING 70 YEARS.
Slide 27: Appendix
Appendix CELEBRATING 70 YEARS.
Slide 28: Policyholder data
Policyholder data nib Group policyholders (#) FY22 FY21 FY20 FY19 Total persons covered 1,715,081 1,644,887 1,616,263 1,579,6941 Australian residents health insurance 1,255,265 1,224,320 1,186,805 1,176,1541 International (inbound) health insurance 181,181 187,410 202,533 190,479 New Zealand2 278,63
Slide 29: Detailed Group gross underwriting
Detailed Group gross underwriting Underwriting result ($m) FY22 FY21 Change Net premium revenue 2,703.4 2,548.8 ▲6.1% arhi 2,286.2 2,174.1 ▲5.2% iihi 123.7 115.5 ▲7.1% nz 291.8 258.6 ▲12.8% nib travel 1.7 0.6 ▲183.3% Net claims expense (1,805.6) (1,738.0) ▲3.9% Hospital claims paid (arhi) (1,030.0)
Slide 30: Management expenses – arhi, iihi & NZ
Management expenses – arhi, iihi & NZ Marketing indirect Other Total MER Amortisation Total MER total Marketing Total ($m) Commissions Commissions Commissions management underwriting underwriting of acquired management management (direct) marketing paid deferred amortised expenses expenses expenses
Slide 31: Investments, gearing and capital
Investments, gearing and capital Change Funds invested FY22 FY21 $m FY22 FY21 FY22 v FY21 Defensive Net investment income (30.0) 51.8 ▼157.9% Net investment income (8.9) 0.7 Net investment return (%) (2.4) 4.9 ▼730bps Net investment return (%) (1.0) 0.1 Funds invested 1,225.2 1,091.7 ▲12.2% Funds in
Slide 32: Investment asset allocation
Investment asset allocation Consolidated Australian investment portfolio New Zealand investment portfolio nib foundation investment portfolio Net return Net return Net return Net return Balance as Allocation Balance as Allocation Balance as Allocation Balance as Allocation 12 months 12 months 12 mon
Slide 33: Glossary
Glossary Term Definition Term Definition 1H Six months ended/ending 31 December of the relevant financial year Net claims expense Claims expense net of reinsurance 2H Six months ended/ending 30 June of the relevant financial year Net margin Gross profit less management expenses as percentage of net