Nib Holdings Ltd · ASX:NHF
Nib — H1 FY2022 Earnings Presentation
33 slides from Nib's earnings presentation, Feb 21, 2022
Slide 1: FY2022 half year results
FY2022 half year results 21 February 2022 1
Slide 2: Disclaimer
Disclaimer The material in this presentation is a summary of the results of nib holdings limited (nib) for the 6 months ended 31 December 2021 and an update on nib’s activities and is current at the date of preparation, being 21 February 2022. Further details are provided in nib’s interim 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: Our purpose: your better health
Our purpose: your better health We are a trusted partner in helping our members: • make more informed healthcare decisions and generally live healthier lives • connect and transact with the healthcare system • finance and access more affordable healthcare 5
Slide 6: Delivering on our purpose
Delivering on our purpose $920.6m 1,708,556 197,300 benefits paid1 dental, optical & hospital ancillary visits admissions Affordable access >$90m lowest arhi price rise COVID-19 support in 20 years and package deferred for 5 months 4,445 ~127,000 >90,000 members in health searches on interactions wi
Slide 7: 1H22 Group results Highlights
1H22 Group results Highlights • arhi policyholder growth of 2.8%2 vs pcp (1.3% ytd) with 44.6% of Total Group revenue Group UOP ytd sales new to category. $1.4b▲8.3% $109.6m ▲28.5% • New Zealand policyholder growth of 4.1%2 vs pcp (2.4% ytd). Acquisition of Kiwi Insurance Limited. Expansion of Māori
Slide 8: Nick Freeman
Nick Freeman Group Chief Financial Officer
Slide 9: Group income statement
Group income statement ($m) 1H22 1H21 Change Key drivers of result 1H22 v 1H21 • Strong premium revenue growth of 8.2% due to policyholder growth. Net premium revenue 1,356.1 1,253.3 ▲8.2% 1H21 impacted by April 20 pricing deferral. Net claims incurred1 (1,067.0) (1,003.0) ▲6.4% • Claims growth at 6
Slide 10: Group gross profit drivers 1H21 – 1H22
Group gross profit drivers 1H21 – 1H22 ($m) 1H21 1H22 Movement • Policyholder growth and pricing more 1H21 Group gross profit 259.7 than offset negative mix. Policyholder growth 12.2 • OSC development relatively high due to Premium revenue 45.0 turn around effect. Claims expense (32.8) • Continue to
Slide 11: Australian residents health insurance
Australian residents health insurance Change • Premium revenue ▲7.8% driven by policyholder growth (▲2.8%). Financial performance ($m) 1H22 1H21 1H22 v 1H21 1H21 impacted by April 20 price deferral. Premium revenue 1,151.0 1,067.8 ▲7.8% • Net policyholder growth of 2.8% (1.3% ytd) in line with marke
Slide 12: International inbound health insurance
International inbound health insurance Financial performance ($m) 1H22 1H21 Change • Another challenging result, however positive signs with premium 1H22 v 1H21 revenue ▲2.7%, driven by strong performance in workers business. Premium revenue 59.9 58.3 ▲2.7% • Policyholders are ▼1.7% (1.6% ytd) drive
Slide 13: New Zealand
New Zealand Change • Strong premium revenue growth of 13.8% due to policyholder Financial performance ($m) 1H22 1H21 1H22 v 1H21 growth of 4.1% (2.4% ytd), price adjustments to reflect inflation and Premium revenue 144.4 126.9 ▲13.8% favourable FX. Claims incurred (excluding claims handling)1 (92.9)
Slide 14: nib Travel
nib Travel Change • Gross Written Premium ▲550.0% and operating income ▲86.4% vs Financial performance ($m) 1H22 1H21 1H22 v 1H21 pcp, albeit from low base. Operating income 8.2 4.4 ▲86.4% • COVID-19 lockdowns domestically and the pause in AU/NZ sales Acquisition costs (3.4) (0.3) ▲1,033.3% between
Slide 15: Capital management
Capital management Group capital ($m) 1H22 1H21 Strong capital generation Opening available capital (30 June) 65.7 53.7 nib Group nib health funds Sources of capital 39.1 31.5 net tangible assets net tangible assets 372.9 NPAT 81.2 65.1 282.4 266.4 306.9 254.9 238.8 279.1 Write down of intangibles a
Slide 16: Cash flow
Cash flow Change • Operating cash flow turnaround due mostly to lower claims. Consolidated cash flow ($m) 1H22 1H21 1H22 v 1H21 • Free cash flow positive despite increase in dividend paid. Operating cash inflows 1,398.1 1,285.5 ▲8.8% • Net payments for investments is rebalancing to maintain Operatin
Slide 17: Roslyn Toms
Roslyn Toms Group Executive Legal & Chief Risk Officer
Slide 18: Sustainability principles
Sustainability principles health 8
Slide 19: Sustainability – 1H22 highlights
Sustainability – 1H22 highlights • nib members now have access to 19 health management programs including two new digital programs. • Supporting Ngāti Whātua Ōrākei members to reduce risk of heart disease through new heart screening kit. • Toi Ora preventative health partnership grows with Ngāti Por
Slide 20: Sustainability – what's to come in 2H22
Sustainability – what's to come in 2H22 • 375 members enrolled in a Ngāti Whātua Ōrākei health management program. • Launch of digital health record, risk profile and good health plan. • Carbon neutrality and plan to achieve net carbon zero. • New employee experience tool which will help measure inc
Slide 21: Mark Fitzgibbon
Mark Fitzgibbon Chief Executive Officer & Managing Director
Slide 22: Group business strategy – Payer to Partner (P2P)
Group business strategy – Payer to Partner (P2P) We apply data science in developing deep insight into the health risk of individuals and how it is best managed and treated. We equip them with digital tools for integrated, seamless and secure engagement with us and the healthcare system as a whole.
Slide 23: P2P value proposition
P2P value proposition Financial protection Insight and guidance Connectivity Health insurance Health record ETriage Hospital GPs + risk profile (Infermedica) Good Health Plan Specialist Virtual consult Travel insurance Biometric (Honeysuckle Health) (Clinical Partners) (24-7 Medcare) Allied health H
Slide 24: Honeysuckle Health – key enabler
Honeysuckle Health – key enabler Supply induced demand? Measuring inpatient rehabilitation conversion rates post • Honeysuckle Health (HH) is a healthcare data major joint replacement. Two hospitals, same group. analytics and health services business which provides insights into members health and a
Slide 25: Outlook
Outlook • COVID-19 has significantly heightened awareness of health risks and the need for protection. Expect that to continue. • Strong arhi performance and New Zealand and international workers profitability are offsetting current loss making in international students and travel. Expect that suppo
Slide 26: Questions and answers
Questions and answers
Slide 27: Appendix
Appendix anib
Slide 28: Policyholder data
Policyholder data nib Group health insurance (#) 1H21 FY21 1H22 Total persons covered 1,629,784 1,644,887 1,659,159 Australian residents health insurance 1,211,264 1,224,320 1,235,420 International (inbound) health insurance 189,288 187,410 185,372 New Zealand 229,232 233,157 238,367 Total policyhol
Slide 29: Detailed Group gross underwriting result
Detailed Group gross underwriting result Underwriting result ($m) 1H22 1H21 Change Net premium revenue 1,356.1 1,253.3 ▲8.2% arhi 1,151.0 1,067.8 ▲7.8% iihi 59.9 58.3 ▲2.7% nz 144.4 126.9 ▲13.8% nib travel 0.8 0.3 ▲166.7% Net claims expense (926.9) (866.4) ▲7.0% Hospital claims paid (arhi) (531.0) (
Slide 30: Management expenses – arhi, iihi and NZ
Management expenses – arhi, iihi and 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 expense
Slide 31: Investments, gearing and capital
Investments, gearing and capital Change Funds invested 1H22 1H21 $m 1H22 1H21 1H22 v 1H21 Defensive Net investment income 15.1 28.0 ▼46.1% Net investment income (1.7) 2.9 Net investment return (%) 1.3 2.7 ▼140bps Net investment return (%) (0.2) 0.3 Funds invested 1,128.2 977.7 ▲15.4% Funds invested
Slide 32: Investment asset allocation
Investment asset allocation Consolidated Australian investment portfolio New Zealand investment portfolio nib foundation investment portfolio Allocation Net return 6 Allocation Net return 6 Allocation Net return 6 Allocation Net return 6 Balance as Balance as Balance as Balance as at months to at mo
Slide 33: Glossary
Glossary Term Definition Term Definition 1H Six months ended/ending 31 December of the relevant financial year Net margin Gross profit less management expenses as percentage of net premium revenue 2H Six months ended/ending 30 June of the relevant financial year PCP - Total policies as at the end of