Nib Holdings Ltd · ASX:NHF
Nib — H1 FY2024 Earnings Presentation
49 slides from Nib's earnings presentation, Feb 26, 2024
Slide 1: FY2024 Half Year Results
FY2024 Half Year Results 26 February 2024
Slide 2: 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 3: Disclaimer
Disclaimer The material in this presentation is a summary of the results of nib holdings limited (nib) for the 6 W hilst the forward-looking statements are based on current v iews, expectations and beliefs as at the months ended 31 December 2023 and/or its related bodies corporate (Group) and an upd
Slide 4: Mark Fitzgibbon
Mark Fitzgibbon Chief Executive Officer & Managing Director
Slide 5: Our purpose: Your better health and wellbeing
Our purpose Your better health and wellbeing • Deliver deep insight and guidance about how you may best achieve personal health and wellbeing goals and manage risk. • Connect you with a wide ecosystem of relevant and high-quality products, services, programs and providers. • Render it all accessible
Slide 6: Delivering on our purpose – 1H24 highlights
Delivering on our purpose – 1H24 highlights Financial protection Insight and guidance Connection with P2P ecosystem • $1.2b in private health • 11,173 health assessments • 450k+ active app users. insurance claims paid up including 5,534 skin checks via 10.5%: • 15,606 telehealth consults. the nib as
Slide 7: 1H24 Group financial highlights
1H24 Group financial highlights Group revenue1 Group UOP Net investment income Net profit after tax $1.7b $144.4m $33.3m $104.0m ▲12.4% ▲21.7% ▲19.4% ▲50.0% 1.5 1.7 118.7 144.4 22.2 33.3 87.1 104.0 1H23 1H24 1H23 1H24 1H23 1H24 1H23 1H24 ROIC2 Earnings per share3 Interim dividend Group NPS4 AASB 102
Slide 8: Strong arhi result
Strong arhi result $1,400.0 arhi revenue & UOP $250.0 $1,200.0 9 year 1H UOP CAGR: 15.9%, revenue CAGR: 8.0% $200.0 $1,000.0 $150.0 $800.0 $600.0 $100.0 $400.0 $50.0 $200.0 $0.0 $0.0 ($m) 1H14 2H14 1H15 2H15 1H16 2H16 1H17 2H17 1H18 2H18 1H19 2H19 1H20 2H20 1H21 2H21 1H22 2H22 1H23 2H23 1H24 ($m) Re
Slide 9: Positive trend remains in iihi, NZ, Travel
Positive trend remains in iihi, NZ, Travel iihi revenue & UOP $100.0 9 year 1H UOP CAGR: 8.6%, revenue CAGR: 19.1% $20.0 $90.0 $80.0 $15.0 $70.0 $10.0 $60.0 $50.0 $5.0 $40.0 $30.0 $0.0 $20.0 ($5.0) $10.0 $0.0 ($10.0) ($m) ($m) Revenue UOP NZ revenue & UOP Travel revenue & UOP $200.0 $25.0 $70.0 7 ye
Slide 10: Nick Freeman
Nick Freeman Group Chief Financial Officer
Slide 11: Group income statement
Group income statement Financial performance ($m) 1H24 1H23 Change Insurance revenue 1,588.9 1,429.2 ▲11.2% • Insurance revenue growth driv en by Incurred claims (1,218.4) (1,102.5) ▲10.5% policyholder growth across all underwriting Other insurance expenses - marketing (88.3) (77.3) ▲14.2% segments
Slide 12: Other income and expenses
Other income and expenses Other income and expenses ($m) 1H24 1H23 Change Other income 83.7 59.4 ▲40.9% • Limited change in aggregated net other arhi 1.3 1.4 ▼7.1% income and expenses, howev er, underlying there are significant changes v s PCP in nib iihi 2.0 0.0 n/a Trav el, nib Thriv e and Midnigh
Slide 13: Australian residents health insurance
Australian residents health insurance Financial performance ($m) 1H24 1H23 Change Strong result with 3.7% policyholder growth and Insurance revenue 1,308.7 1,186.2 ▲10.3% reduced MER Insurance service costs (1,179.9) (1,086.3) ▲8.6% • Policyholder growth driv en by increases in DTC +6.2% and Incurre
Slide 14: arhi claims growth
arhi claims growth Long-term inflation remains in 4-6% range and below sector Cumulative arhi claims per person growth since FY021 180% 160% 140% Industry CAGR: 4.3% 120% FY02-FY19: 5.2% FY19-FY23: 0.7% 100% 80% 60% nib CAGR: 4.1% FY02-FY19: 4.5% FY19-FY23: 2.5% 40% 20% 0% FY02 FY03 FY04 FY05 FY06 F
Slide 15: arhi normalised margins
arhi normalised margins • Indicative estimate of normalised/underlying net margin. • Adjusts for estimated mov ements from COVID-19 impacts, liability for incurred claims (LIC) mov ements and other unusual ev ents. • LIC mov ements include remov ing prior period claims dev elopment in that half, hin
Slide 16: International inbound health insurance
International inbound health insurance Financial performance ($m) 1H24 1H23 Change Solid top line growth driving UOP result Insurance revenue 93.7 76.2 ▲23.0% • Surpassed 200,000 policyholders. 1H24 sales highest ev er Insurance services costs (81.2) (66.6) ▲21.9% with strong growth in both students
Slide 17: New Zealand
New Zealand Financial performance ($m) 1H24 1H23 Change Robust policyholder growth, result impacted by high Insurance revenue 182.4 163.1 ▲11.8% service cost inflation and DAC adjustment in PCP Insurance service costs (169.1) (149.2) ▲13.3% • Rev enue up 11.8% due to policyholder growth and price In
Slide 18: nib Travel
nib Travel Financial performance ($m) 1H24 1H23 Change GPAC growth despite sales stabilising after post- Underlying insurance operating result 0.2 (0.2) ▼200.0% pandemic recovery travel spike Operating income 43.4 51.3 ▼15.4% • Strong PCP due to pent up demand post pandemic. Acquisition costs (17.1)
Slide 19: nib Thrive
nib Thrive Financial performance ($m) 1H24 1H23 1 Change NDIS strategy progressing well Fee income 24.8 1.4 ▲1,671.4% • Successful acquisition to date of six plan managers and Operating expense (18.4) (1.0) ▲1,740.0% a digital marketplace platform, totalling $166.5m2. Underlying operating profit 6.4
Slide 20: Capital management
Capital management nib Group ($m) 1H24 1H23 Change nib Group nib health funds net tangible assets ($m) net tangible assets ($m) Net assets 1,038.3 1,037.3 ▲0.1% 485.6 Net tangible assets1 314.5 470.8 ▼33.2% 470.8 455.7 443.8 428.0 Debt 246.2 232.7 ▲5.8% 352.1 345.0 314.5 396.5 290.9 Leverage ratio (
Slide 21: Cash flow
Cash flow Consolidated cash flow ($m) 1H24 1H23 Change • Strong operating cash inflow driv en by policyholder growth Operating cash inflows 1,740.4 1,539.7 ▲13.0% across PHI businesses. Growth in nib Thriv e and Midnight Health has more than offset a reduction from nib Trav el. Operating cash outflo
Slide 22: High participant growth and satisfaction has built a solid foundation for expansion and profitability
HMP enrolments (#) High participant growth and satisfaction has built a solid 9,000 foundation for expansion and profitability 8,000 • Rev enue growth of 17.9% 1H24 v 1H23. 7,000 2,343 6,000 2,169 • 27 PHI & GI customers at end 1H24. 5,000 2,075 4,000 • Distinct market offering of digital and teleph
Slide 23: Investment in new products & technology driving customer and revenue growth
Revenue ($m) Investment in new products & technology driving customer 2.5 and revenue growth • Rev enue growth of 189.5% 1H24 v 1H23. 2.0 • 28 products now in market. 1.5 • ~164,000 Australians serv iced to date (end Jan). 1.0 • Over 22,000 nib members to date hav e been a Midnight Health customer.
Slide 24: Roslyn Toms
Roslyn Toms Group Executive Legal & Chief Risk Officer
Slide 25: Sustainability – 1H24 progress
Sustainability – 1H24 progress Over 9.3k members Completed a new double materiality enrolled in health assessment to understand our most management programs salient sustainability-related impacts. (annual target 20,000). Population Over 27.8k members Health New Diversity, Equity and Inclusion partic
Slide 26: Sustainability – FY24 targets
Sustainability – FY24 targets Population Natural People, culture Community spirit Leadership & health environment & employment & cohesion governance • 42,000 members • Introduce one new • Maintain 40/40/20 • 250,000 people • Complete modern participating in mechanism designed to gender mix in Board,
Slide 27: Mark Fitzgibbon
Mark Fitzgibbon Chief Executive Officer & Managing Director
Slide 28: Business strategy – Payer to Partner (P2P)
Business strategy – Payer to Partner (P2P) PHI expansion Cost containment New markets and affordability Payer to Partner Government and Honeysuckle Health 3rd party programs 28
Slide 29: Financial protection, insight and guidance, P2P ecosystem
Financial protection Insight and guidance and support • Health checks and Good Health Plan • Priv ate health insurance • Health score & health engagement • Trav el insurance • Symptom checker & E-triage • Life and liv ing benefits • Find a prov ider & program • NDIS plan management • Social prescrib
Slide 30: How AI & data science is having an impact
How AI & data science is having an impact Personalised, context driven Increasing operational efficiencies experiences • Payment integrity models to • 3.2m nibby interactions identify claims leakage • 65% of chat sessions • Intelligent document processing to contained within channel streamline workf
Slide 31: Evolution of the nib app 2022 - 2024
Evolution of the nib app 2022 - 2024 In 2022 you could: Now you can also: Have prescribed treatments delivered to Check your cover, access Use the nib Symptom Checker your door your digital card, make a Complete a HealthCheck and Access mental health support claim SkinCheck Get discounted travel ins
Slide 32: nib Thrive shaping the future
nib Thrive shaping the future • Forecast NDIS spending $92b1 by 2033 (FY23: $37b2). • nib Thrive now supports ~39,000 NDIS participants through acquisition of six plan managers (~35,000) and organic growth (~4,000). • NDIS review has recommended the creation of a single level of intermediation 'Navi
Slide 33: Outlook
Outlook nib nib arhi iihi NZ Travel Thrive • Market growth • Continued demand for • FY24 residents PHI net • Mixed market feeling • On track to reach • Population higher education, policyholder growth about travel outlook. ~50,000 participants by • Public waiting time temporary skilled and 3-4%. end
Slide 34: Questions & Answers
Questions & Answers anib
Slide 35: nib Group income statements and balance sheets AASB 1023 – AASB 17
nib Group income statements and balance sheets AASB 1023 – AASB 17 The Group has adopted AASB 17 Insurance Contracts (AASB 17) on a retrospective basis. As a result, the Group has restated certain comparative amounts in the financial results included in this presentation, however these restatements
Slide 36: nib Group five-year summary AASB 1023
nib Group five-year summary AASB 1023 Consolidated income statement ($m) 2023 2022 2021 2020 2019 Net premium revenue 2,911.5 2,703.4 2,548.8 2,439.6 2,340.8 Net claims incurred (2,203.6) (2,066.3) (1,985.5) (1,933.4) (1,811.4) Gross profit 707.9 637.1 563.3 506.2 529.4 Movement in policy liabilitie
Slide 37: nib Group five-year summary AASB 17
nib Group five-year summary AASB 17 Consolidated income statement ($m) 2023 2022 2021 2020 2019 Insurance revenue 2,939.1 2,754.3 2,574.1 2,479.8 2,372.6 Insurance service costs – incurred claims (2,331.7) (2,007.4) (2,068.1) (1,850.6) (1,826.7) Insurance service costs – other insurance expenses (43
Slide 38: nib Group 1H23 AASB 1023 to AASB 17
nib Group 1H23 AASB 1023 to AASB 17 Consolidated income statement ($m) 1H23 AASB 1023 1H23 impact 1H23 AASB 17 Insurance revenue 1,448.9 (19.7) 1,429.2 Insurance service costs – incurred claims (1,116.3) 13.8 (1,102.5) Insurance service costs – other insurance expenses (201.0) 0.1 (200.9) Net reinsu
Slide 39: nib Group 1H24 AASB 1023 to AASB 17
nib Group 1H24 AASB 1023 to AASB 17 Consolidated income statement ($m) 1H24 AASB 1023 1H24 impact 1H24 AASB 17 Insurance revenue 1,606.7 (17.8) 1,588.9 Insurance service costs – incurred claims (1,218.4) (1,218.4) Insurance service costs – other insurance expenses (217.2) (217.2) Net reinsurance cos
Slide 40: nib Group 1H24 v 1H23 - AASB 1023
nib Group 1H24 v 1H23 - AASB 1023 Consolidated income statement ($m) 1H24 1H23 Change Net premium revenue 1,590.3 1,434.1 ▲10.9% Net claims incurred 1 (1,210.4) (1,109.0) ▲9.1% Gross profit 379.9 325.1 ▲16.9% Movement in policy liabilities 0.9 0.5 ▲80.0% Other underwriting revenue 2.3 3.3 ▼30.3% Man
Slide 41: nib Group FY23 AASB 1023 to AASB 17
nib Group FY23 AASB 1023 to AASB 17 Reported Restated under AASB Reclassification Measurement under 1023/1038 AASB 17 PPB and Insurance Price deferral Other DAC UPL policy OSC receivables and Reinsurance adjustment adjustments Balance at 30 June 2023 ($m) liabilities payables Receivables 109.3 (63.0
Slide 42: 1H24 Group financial highlights – AASB 1023
1H24 Group financial highlights – AASB 1023 Group revenue1 Group UOP Net investment income Net profit after tax $1.7b $162.2m $33.3m $116.4m ▲29.7% ▲50.0% ▲12.0% ▲27.1% 1.5 1.7 125.1 162.2 22.2 33.3 91.6 116.4 1H23 1H24 1H23 1H24 1H23 1H24 1H23 1H24 ROIC2 Earnings per share3 Group NPS4 19.9% 24.5 cp
Slide 43: Strong arhi result – AASB 1023
Strong arhi result – AASB 1023 $1,400.0 arhi revenue & UOP $250.0 9 year 1H UOP CAGR: 17.6%, revenue CAGR: 8.2% $1,200.0 $200.0 $1,000.0 $150.0 $800.0 $600.0 $100.0 $400.0 $50.0 $200.0 $0.0 $0.0 ($m) 1H14 2H14 1H15 2H15 1H16 2H16 1H17 2H17 1H18 2H18 1H19 2H19 1H20 2H20 1H21 2H21 1H22 2H22 1H23 2H23
Slide 44: Appendix
Appendix anib
Slide 45: Policyholder data
Policyholder data nib Group policyholders (#) 1H24 FY23 1H23 Total persons covered 1,842,925 1,813,773 1,758,976 Australian residents health insurance 1,331,565 1,314,131 1,283,930 International (inbound) health insurance 224,396 212,643 191,941 New Zealand 286,964 286,999 283,105 Total policyholder
Slide 46: Detailed arhi underlying insurance operating result
Detailed arhi underlying insurance operating result arhi underlying insurance operating result ($m) 1H24 1H23 Change Net premium revenue 1,303.6 1,181.3 ▲10.4% Net claims expense (903.1) (829.5) ▲8.9% Hospital claims paid (640.5) (575.5) ▲11.3% Ancillary claims paid (272.8) (251.4) ▲8.5% OSC provisi
Slide 47: Investments, gearing and capital
Investments, gearing and capital $m 1H24 1H23 Change Funds invested $m 1H24 1H23 Net investment income 33.3 22.2 ▲50.0% Defensive Net investment return (%) 2.5 1.7 ▲80bps Net investment income 23.9 11.1 Funds invested 1,275.7 1,260.6 ▲1.2% Net investment return (%) 2.2 1.1 Debt 246.2 232.7 ▲5.8% Fun
Slide 48: 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 6 months to 6 months to 6
Slide 49: Glossary
Glossary Term Definition Term Definition 1H Six months ended/ending 31 December of the relev ant financial year MER Management expense ratio 2H Six months ended/ending 30 June of the relev ant financial year Net margin Gross profit less management expenses as percentage of net premium rev enue AASB