NIB Holdings Ltd · ASX:NHF
NIB — Macquarie Australia Conference 2018
19 slides from NIB's conference presentation, May 1, 2018
Slide 1: ASX cover letter: Presentation to the Macquarie Australia Conference
nib holdings limited t 13 14 63 Head Office f 02 4925 1999 22 Honeysuckle Drive Newcastle NSW 2300 e nib@nib.com.au abn 51 125 633 856 w nib.com.au For personal use only 1 May 2018 The Manager Company Announcements Australia Securities Exchange Limited Level 4, Bridge Street SYDNEY NSW 2000 Presenta
Slide 2: Macquarie Australia Conference
• CLICK TO EDIT MASTER TEXT STYLES For personal use only Macquarie Australia Conference 1 May 2018 Mark Fitzgibbon Managing Director & Chief Executive Officer
Slide 3: Key Business Strategies
KEY BUSINESS STRATEGIES Personalisation For personal use only Harness data science to “personalise” our relationship with members and become a “health partner” as a means of enhancing the value proposition, differentiating nib in the market and better influencing costs and affordability. Grow the co
Slide 4: PHI and Personalised Healthcare
PHI AND PERSONALISED HEALTHCARE Data science, Artificial Intelligence (AI) and the For personal use only Internet of Things (IOT) make for a profound shift in how we think about healthcare and the PHI value proposition especially through deep insight and personalisation. PHI is well placed to lead t
Slide 5: Project Jane
PROJECT JANE Financial Protection stuff that pays for me For personal use only Connectivity Empowerment • Health insurance • Travel insurance • Critical illness insurance • Health savings products Stuff that predicts, prevents and fixes Stuff that helps me engage and decide • • Hospital accommodatio
Slide 6: Grow the core (arhi)
For personal use only (arhi) Grow the core 5
Slide 7: Positives
POSITIVES • Australia needs more private healthcare financing For personal use only PREMIUM REVENUE ($m) not less. 1,669.0 1,568.4 • nib’s top line and UOP are growing. 1,429.5 1,314.5 1,187.2 • Claims inflation is low and utilisation management improving. FY13 FY14 FY15 FY16 FY17 • There are real o
Slide 8: Challenges
CHALLENGES For personal use only • Low PHI market growth. • High salience around premium increases and “out-of-pocket” expense. * • Populist political policy. The potential 2 x 2% cap and impact upon margins. • Ongoing evidence of avoidable hospitalisation, unwarranted treatment and cost variation.
Slide 9: Possible Prudential Capital Changes
POSSIBLE PRUDENTIAL CAPITAL CHANGES • Current internal capital targets and capital levels fully meet APRA expectations. PHI capital standards were For personal use only last reviewed by PHIAC in 2014. APRA has openly stated it sees no pressing need for modifications at this stage1 . • APRA has indic
Slide 10: Outlook Generally Remains Positive
OUTLOOK GENERALLY REMAINS POSITIVE For personal use only Organic growth 3-4% with ongoing investment and creativity. FY18 arhi net margin 5-6%. Personalisation strategy has enormous potential. Long term public/private partnerships. 9
Slide 11: Adjacent businesses
For personal use only Adjacent businesses (New Zealand, International Students and Workers, nib Travel and Chinese Joint Venture) 10
Slide 12: nib New Zealand
nib NEW ZEALAND For personal use only Positive Not so positive • NZ needs more private healthcare financing not less. • Negligible system growth. • Top line and UOP growth. • High claims inflation (circa 6%). • Management systems improving. • Population health opportunities. • Latitude to experiment
Slide 13: International Workers and Students
INTERNATIONAL WORKERS AND STUDENTS For personal use only Positive Not so positive • Price competition. • Ongoing demand for international workers and students. • Strong profit margins. • Global expansion via NISS platform. PREMIUM REVENUE ($m) NET MARGIN (%) 33.4 29.5 74.8 27.6 76.8 21.5 22.2 54.9 3
Slide 14: nib Travel (née World Nomads Group)
nib TRAVEL (née WORLD NOMADS GROUP) For personal use only Positive Not so positive • No shortage of competition. • Strong domestic franchise. • Risk associated with overseas expansion. • Growing international sales and value chain expansion. • Business integration completed. GROSS WRITTEN PREMIUM ($
Slide 15: Chinese Joint Venture
CHINESE JOINT VENTURE For personal use only Positive • Government encouraging healthcare and private insurance. • Strong working relationship with Tasly. • License application near submission. • Imminent appointment of CEO. • Target the Sichuan Province (population approx. 100 million), using medica
Slide 16: Outlook for Adjacent Businesses
OUTLOOK FOR ADJACENT BUSINESSES Domestic New Zealand health insurance markets remain "soft" with strong competition For personal use only creating sales, lapse and downgrading pressures. Expecting improved conditions in FY19 and beyond. Growing demand for international students and workers health in
Slide 17: Racing the Red Queen
RACING THE RED QUEEN For personal use only Project Jane nibx 2.0 Cloud migration of systems New digital member ecosystem (incl. Whitecoat platform) First Choice Provider Network Life insurance 16
Slide 18: Guidance
GUIDANCE For personal use only ($m) FY18 (Guidance) Statutory operating profit $148.7 ● FY18 UOP expected to be at least $165 One-off transactions and M&A costs 9.0 million (statutory operating profit at One-off transactions1 least $148 million). 5.7 M&A costs 3.3 Amortisation of acquired intangible
Slide 19: Questions?
For personal use only Questions? 18