Bupa Arabia For Cooperative Insurance Co. · TADAWUL:8210
Bupa Arabia For Cooperative Insurance — Bupa Arabia — Q1 2021 Earnings Presentation
39 slides from Bupa Arabia For Cooperative Insurance's earnings presentation, Jun 14, 2021
Slide 1: Bupa Arabia Q1 2021 – Earnings Conference Call & Webcast
Bupa Arabia Q1 2021 – Earnings Conference Call & Webcast June 14th, 2021 INTERNAL
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 Company Overview Financial Performance Market Outlook Other Highlights & Achievements Additional Updates Appendix – PDR & DAC Examples Abbreviations & Glossary Q1 2021 Webcast 3 INTERNAL
Slide 4: Strategic Framework
Strategic Framework We consistently strive to reflect what we stand for in everything we do Our Purpose Helping people live longer, healthier, happier lives Our vision The most trusted health insurer in KSA Our ambition To accelerate Bupa Arabia’s growth trajectory Our pillars Passionate about Our c
Slide 5: Board of Directors
Board of Directors Our Board plays a vital part in setting the cultural tone to put customers first Eng. Loay Hisham Nazer Martin Houston David Martin Fletcher Chairman Board Member Vice-Chairman Dr. Abdulla Elyas Huda M. Bin Ghoson Zaid Algwaiz Board Member - Independent Board Member - Independent
Slide 6: Chief Executive Team
Chief Executive Team Solid team to deliver on Bupa Arabia’s purpose, vision and mission Tal Nazer Chief Executive Officer (CEO) Nader Ashoor Tabish Mushtaq Ali Sheneamer Chief Financial Officer Chief Risk Officer Chief Business Development Officer (CFO) (CRO) (CBDO) Tariq Alamoudi Mohamed El Missaou
Slide 7: Bupa Arabia at a Glance
Bupa Arabia at a Glance Robust profitability growth & significant value creation for shareholders with serving within in 24+ Years of Experience 1,800 Employees 3m+ Members 1,450+ Providers Saudi Arabia GWP (SARm) 10,411 10,447 CAGR +25% 7,939 8,567 7,328 7,733 5,740 3,177 1,610 1,993 2,198 871 1,20
Slide 8: Agenda
Agenda Company Overview Financial Performance Market Outlook Other Highlights & Achievements Additional Updates Appendix – PDR & DAC Examples Abbreviations & Glossary Q1 2021 Webcast 8 INTERNAL
Slide 9: KPIs
KPIs Q1 2021 earnings grew by c.40% YoY as a result of favorable loss ratio and lower acquisition costs SR mn GWP Contribution -6.3% +0.6% 3,470 354 356 3,253 2,905 286 Combined Ratio 98.3% 97.6% 95.4% 10.9% 10.8% 9.6% Q1 2019 Q1 2020 Q1 2021 Q1 2019 Q1 2020 Q1 2021 EBT1 87.4% 86.7% 85.7% BDP % of R
Slide 10: EBT
EBT EBT on the rise driven predominantly by lower expensed acquisition costs SR mn 39.6% Contribution 2.1m 175.4 125.7 -174.5 176.6 48.5 3.1 -4.0 2019 Earned Premium Claims Incurred Expenses Investment & PH Surplus Payable 2020 Other Income 10.2 80.2 -3.2 -38.6 G&A Other * S&M BDP 1 PH: Policyholder
Slide 11: Investment Portfolio and Results
Investment Portfolio and Results Resilient investment income through increased duration & further diversification SR mn Investment Income Income Breakdown1 Asset Allocation 4% 20% 235 Q1 Portfolio Size 10% 2021 75% SR 9.3Bn 213 66% 56 24% 30% 32% 45 2% 20% 60 57 Q1 Portfolio Size 5% 81% 2020 SR 7.2B
Slide 12: Market Share and Positioning
Market Share and Positioning Bupa Arabia continues to lead the Saudi total & health insurance market in Q1 2021 Total Insurance Market Share (GWP basis) 24% 27% 25% 39% 36% 38% Q1 Q1 Q1 2019 2020 2021 20% 23% 6% 20% 7% 6% 9% 10% 8% Health Insurance Market Share – With Umrah (GWP basis) 15% 14% 14% 3
Slide 13: Total Insurance Market
Total Insurance Market Drop in contribution partially offset by better investment income performance and lower Opex SR mn GWP Loss Ratio Contribution Investment Income Net Profit +0.6% +2.4pps -15.6% +66.8% +17.2% 12,734 12,806 82.7% 1,595 300 212 80.3% 85.7% 21.2% 354 60 19.9% 3,470 3,253 25.4% 1,3
Slide 14: Non-Health Insurance Market
Non-Health Insurance Market Drop in other segments’ contribution mainly due to lower earned premiums from Umrah general accident insurance SR mn Motor Segment Other Segments1 7% 6% 11% 10% 8% 7% 6% 4% Market Q1 Q1 Market Q1 4% Q1 5% 21% 22% Share 2020 2021 Share 2020 2021 65% 65% 80% 81% GWP Loss Ra
Slide 15: Health Insurance Market
Health Insurance Market Health contribution declining as a result of lower earned premiums and higher LR SR mn GWP Earned Premiums Loss Ratio Contribution +0.3% +4.1pps -3.7% -19.4% 7,635 7,655 5,624 88.2% 790 5,414 84.1% 85.7% 18.8% 637 3,470 3,253 42.5% 86.7% 354 2,672 2,498 46.1% 90.7% 83.2% 356
Slide 16: Health Insurance Market - GWP Segmentation
Health Insurance Market - GWP Segmentation Bupa Arabia continues to be the preferred health insurer for corporates and SMEs SR mn Corporates1 Medium Enterprises2 Small Enterprises3 Micro Enterprises4 Individuals/Retail +6.9% -14.1% -63.7% -6.2% -5.1% 5,929 1,058 463 305 263 18 289 6 5,546 434 20 6.9
Slide 17: Loss Ratio and Technical Reserves
Loss Ratio and Technical Reserves Bupa Arabia reports healthy LR and a slight increase in reserves ratio mainly driven by PDRs Loss Ratio – Health Insurance Market Bupa Arabia Tawuniya Medgulf AlRajhi Takaful 140% 140% 160% 156.3% 140% 120% 120% 140% 120% 96.1% 120% 105.8% 100% 87.4% 86.7% 100% 90.7
Slide 18: Agenda
Agenda Company Overview Financial Performance Market Outlook Other Highlights & Achievements Additional Updates Appendix – PDR & DAC Examples Abbreviations & Glossary Q1 2021 Webcast 18 INTERNAL
Slide 19: Saudi Health Insurance Market Trends (1/2)
Saudi Health Insurance Market Trends (1/2) Insured lives decreased by 11% (c.1.21m) driven by expats departure -11% -4% 11,008 -14% 9,797 3,565 3,426 7,442 6,372 Mar-20 Mar-21 Mar-20 Mar-21 Mar-20 Mar-21 Total Insured Lives Saudi - Total Expat - Total -6% -10% +1% -17% -11% -14% 7,146 2,201 2,075 5,
Slide 20: Saudi Health Insurance Market Trends (2/2)
Saudi Health Insurance Market Trends (2/2) Expats lives remained flat from Dec20 levels while Saudis’ penetration increased as of May21 Expats -1.3m -1.1mn 7,962 +24k 7,658 6,603 6,424 6,369 6,372 6,515 6,627 Dec-18 Dec-19 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Saudis +136k +391K -103K 3.484 3.38
Slide 21: Gap & Enforcement Explained
Gap & Enforcement Explained Gaps remain in the private sector with ~ 400k primary Saudis without PMI as of Q1 21 Saudis (‘000) 1,763 1,779 1,760 1,734 1,750 1,750 1,719 1,704 1,700 1,701 1,717 1,671 1,687 1,671 1,671 1,678 -21% -23% -27% -40% -43% 1,242 1,385 1,365 1,378 1,351 1,176 1,336 1,341 1,26
Slide 22: Future Growth Opportunities in Health Insurance
Future Growth Opportunities in Health Insurance Potential addition of c.25m lives to the private healthcare sector by 2023 Expected contributors to lead the health insurance growth by 2023 Insured lives in millions 35.2 3.4 10.0 1.0 2.5 2.5 9.8 6.0 Q1 2021 Business & Enforcement Population Growth To
Slide 23: Agenda
Agenda Company Overview Financial Performance Market Outlook Other Highlights & Achievements Additional Updates Appendix – PDR & DAC Examples Abbreviations & Glossary Q1 2021 Webcast 23 INTERNAL
Slide 24: Business & Regulatory Highlights
Business & Regulatory Highlights Distribution of Bupa Arabia has recommended, on 25/04/2021, the distribution of dividends to the shareholders for the 2020 fiscal year which Dividends is 3.4 SAR per share. The dividend distribution date will be confirmed after the approval of the General Assembly. C
Slide 25: Achievements & Awards
Achievements & Awards Brand Finance 2021 Ranking ▪ The strongest brand in Saudi Arabia in 2020 and 2021 Forbes List 2021 ▪ Tal Nazer ranked as one of the top 100 CEO in the Middle East 2021 ▪ Bupa Arabia is the most valuable insurance company in the Middle East ▪ Bupa Arabia ranked #58 in the Middle
Slide 26: Agenda
Agenda Company Overview Financial Performance Market Outlook Other Highlights & Achievements Additional Updates Appendix – PDR & DAC Examples Abbreviations & Glossary Q1 2021 Webcast 26 INTERNAL
Slide 27: Claims Behavior with COVID-19
Claims Behavior with COVID-19 On annualized basis, short-term drop-in claims due to intensive restrictions in 2020 being offset with claims deferrals and seasonality 2020 & 2021 Actual vs. Business Forecast – Claims Trend Without COVID With COVID Actual Savings achieved during lockdown are offset th
Slide 28: Comprehensive Regulatory Updates
Comprehensive Regulatory Updates Newly introduced Article 11, NPHIES & updated Vaccine list are expected to impact the insurance industry Article 11 NPHIES Updated Vaccine List CCHI recently issued Circular 895, dated CCHI and NHIC have partnered to launch a Ministry of Health has updated the basic
Slide 29: Insurance Sector's Collection and Cashflow Analysis
Insurance Sector’s Collection and Cashflow Analysis Cash position of Bupa Arabia reflective of drop in premiums SARm 1 ∆ Cashflow from Operating Activities 550 500 Tawuniya 450 400 350 300 250 Alinma Tokio M 200 SABB Takaful ALETIHAD 150 ALRAJHI TAKAFUL Allianz SF 100 ACIG Gulf General Enaya 50 Sala
Slide 30: Questions & Answers
Questions & Answers Speakers: Nader Ashoor – Chief Financial Officer Ali Sheneamer – Chief Business Development Officer Ahmed Bajunaid – Director of Asset Management & Business Advisory Mohsen Jawhar – Head of Business Advisory & Investor Relations INTERNAL
Slide 31: Agenda
Agenda Company Overview Financial Performance Market Outlook Other Highlights & Achievements Additional Updates Appendix – PDR & DAC Examples Abbreviations & Glossary Q1 2021 Webcast 31 INTERNAL
Slide 32: Premium Deficiency Reserve (PDR) and Deferred Acquisition Cost (DAC) Accounting Standards
Premium Deficiency Reserve (PDR) and Deferred Acquisition Cost (DAC) Accounting Standards PDR is a regulatory requirement (US GAAP and other regulations) set to cover the additional emerging losses when the Unearned Premium Reserve (UPR) is deemed not sufficient to cover the unexpired policies’ rese
Slide 33: Agenda
Agenda Company Overview Financial Performance Market Outlook Other Highlights & Achievements Additional Updates Appendix – PDR & DAC Examples Abbreviations & Glossary Q1 2021 Webcast 33 INTERNAL
Slide 34: Abbreviations
Abbreviations BDP Bad Debt Provision CCHI Council Of Cooperative Health Insurance CMA Capital Market Authority CMT Crisis Management Team CR Commercial Registration EBT Earnings Before Tax G&A General And Administrative Expenses GAZT General Authority for Zakat and Tax GOSI General Organization for
Slide 35: Glossary of terms
Glossary of terms Understanding our Financial Statements A customer buys a one-year medical insurance policy for SR 5,000 on July 1, 2020. The coverage ends on June 30, 2021. The annual reporting period for the business in this example is for the year ended December 31, 2020. A Gross written premium
Slide 36: Glossary of terms
Glossary of terms F Gross claims paid 1825 The actual amount of all paid claims on behalf of the customers. There are two types of claims; 1. Provider claims on direct billing and to be refunded to the customer 2. Reimbursement claims requested by the member A claim is a request for payment received
Slide 37: Glossary of terms
Glossary of terms J Net claims incurred 2000 H+I All payment requests received from hospitals or members to pay for a certain service or projected to be received for the duration of the earned portion of the contract (July 1, 2020 to Dec 31, 2020) K Underwriting result 475 E-J The surplus of net ear
Slide 38: Glossary of terms
Glossary of terms Understanding Bupa Arabia’s Balance Sheet Goodwill Goodwill represents the intangible asset which resulted from the Bupa Arabia purchase of the Saudi Health insurance portfolio from Bupa Middle East Limited E.C. in accordance with the assessment by SAMA and the prescribed SAMA guid
Slide 39: THANK YOU
THANK YOU Bupa Arabia Business Advisory & Investor Relations Tel: +966 920 000 456 Ext: 3583 ba.bair@bupa.com.sa www.bupa.com.sa INTERNAL