Nib Holdings Ltd · ASX:NHF
Nib — J.P. Morgan Access Days 2015
23 slides from Nib's conference presentation, Mar 19, 2015
Slide 1: ASX cover letter: Presentation to J.P. Morgan Access Days
nib holdings limited t 13 14 63 Head Office f 02 4925 1999 22 Honeysuckle Drive Newcastle NSW 2300 e [email protected] abn 51 125 633 856 w nib.com.au For personal use only 19 March 2015 The Manager Company Announcements Australia Securities Exchange Limited Level 4, Bridge Street SYDNEY NSW 2000 Prese
Slide 2: 2015 J.P. Morgan Access Days
For personal use only 2015 J.P. Morgan Access Days March 2015 All figures in this document are represented in Australian dollars unless otherwise stated
Slide 3: Agenda
For personal use only Agenda • Healthcare in Australia • nib key performance metrics • Overview and results to date • Australian Residents Health Insurance • nib New Zealand • International Workers Health Insurance • International Students Health Insurance • Other business
Slide 4: Healthcare in Australia
HEALTHCARE IN AUSTRALIA Australian healthcare spending ($b) Components of healthcare spending For personal use only Government Non-Government Other 160.0 6% Individuals 120.0 18% Australian Government 38% 80.0 Health Insurance# 11% 40.0 State Government 0.0 27% 2003 2004 2005 2006 2007 2008 2009 201
Slide 5: PHI Structure in Australia
PHI STRUCTURE IN AUSTRALIA For personal use only • At 30 June 2014 there were 34 private health insurers operating in Australia. • Top five PHI players represent 81% of the polices nationally. • For profit insurers make up around 68% of the industry. • Direct to Consumer (DTC) accounts for ~85% sale
Slide 6: nib Key Performance Metrics
nib KEY PERFORMANCE METRICS Group premium revenue ($m) Group operating profit ($m) For personal use only First half (1H) Full Year First half (1H) Full Year FY15 guidance range ($75m-$82m) 1,500.0 80.0 60.0 1,000.0 40.0 500.0 20.0 0.0 0.0 FY08 FY09 FY10 FY11 FY12 FY13 FY14 1H15 FY08* FY09 FY10 FY11
Slide 7: nib Key Performance Metrics
nib KEY PERFORMANCE METRICS For personal use only Dividend (cps) Net promoter score* NPS (Australia) NPS (NZ)* Ordinary Dividend Special Dividend Capital Return 30.00% 30.0 20.00% 25.0 10.00% 20.0 16.1 0.00% 15.0 9.0 -10.00% 10.0 5.0 -20.00% 5.0 5.0 9.3 10.0 11.0 7.0 8.0 -30.00% 5.5 2.1 2.4 0.0 FY08
Slide 8: Australian Residents Health Insurance (arhi)
AUSTRALIAN RESIDENTS HEALTH INSURANCE (arhi) Premium revenue ($m) Policyholder growth For personal use only Half Year (1H) Full Year Industry growth (%) nib growth (%) 1,500.0 12.00% 1,000.0 8.00% 500.0 4.00% 000.0 0.00% FY08 FY09 FY10 FY11 FY12 FY13 FY14 1H15 FY08 FY09 FY10 FY11 FY12 FY13 FY14 Oper
Slide 9: arhi Outlook
arhi OUTLOOK For personal use only Industry policyholder growth Industry policyholder growth (%) • Ongoing annual system policyholder growth circa 2%-3% with nib expected to grow in range 4%-5%. 300,000 6.0% Intense competition and churn the new “normal” with implications for net growth and required
Slide 10: nib New Zealand (nib NZ)
nib NEW ZEALAND (nib NZ) Premium revenue ($m) Policyholder growth For personal use only Half Year (1H) Full Year Launch of DTC in October 2013. Sales of DTC now account for 150.0 more than 50% of all sales. 80,000 100.0 75,000 50.0 0.0 FY13* FY14 1H15 70,000 * nib New Zealand acquired November 2012,
Slide 11: New Zealand Outlook
NEW ZEALAND OUTLOOK • Focus will remain upon building business fundamentals: For personal use only • nib brand awareness. • Improved operating model for wealth advisor sales and distribution. • Direct to Consumer (DTC) channel. • Competitive group offering. • Extracting synergies with Australia. • P
Slide 12: International Workers Health Insurance (iwhi)
INTERNATIONAL WORKERS HEALTH INSURANCE (iwhi) Premium revenue ($m) Policyholder growth For personal use only Half Year (1H) Full Year iwhi growth (actual) iwhi growth (%) 30.0 3,000 20.0% 20.0 15.0% 2,000 10.0% 10.0 1,000 5.0% 0.0 FY11* FY12 FY13 FY14 1H15 0 0.0% FY11 FY12 FY13 FY14 * FY11 was a 9 m
Slide 13: iwhi Outlook
iwhi OUTLOOK For personal use only International workers (iwhi) • 457 visa entries remain steady Number of 457 visas in Australia causing us to also focus upon other visa classes and distribution 100,000 possibilities. • Competition will see some insurance margin pressure 50,000 (yield), with strate
Slide 14: International Students Health Insurance (ishi)
INTERNATIONAL STUDENTS HEALTH INSURANCE (ishi) For personal use only Premium revenue ($m) Policyholder growth* Half Year (1H) Full Year ishi growth (actual) ishi growth (%) 10.0 20,000 350.0% 8.0 16,000 250.0% 6.0 12,000 150.0% 4.0 8,000 50.0% 2.0 4,000 0.0 0 -50.0% FY11 FY12 FY13 FY14 1H15 FY12 FY1
Slide 15: ishi Outlook
ishi OUTLOOK For personal use only International students (ishi) International student visas granted (500 class) in Australia • Powerful organic growth supported by clear business and distribution 300,000 strategy. • Saudi student business increases 200,000 annual GWP x 2 and is expected to contribu
Slide 16: Other Business
OTHER BUSINESS For personal use only nib Options Leverages nib’s brand reputation and distribution to support and grow the market for overseas cosmetic, dental and surgical treatment Initial efforts focus upon cosmetic surgery and dental Value proposition centred around trustworthiness, safety
Slide 17: FY15 Guidance
FY15 GUIDANCE For personal use only • FY15 consolidated operating profit of $75m-$82m, with result likely to be at the lower end of this range. • FY15 investment income forecast to be in line with relevant internal benchmarks*. • Ordinary dividend payout ratio 60%-70% of full year NPAT. * Excluding
Slide 18: High Quality, Independent Equity Research
HIGH QUALITY, INDEPENDENT EQUITY RESEARCH For personal use only J.P. Morgan Siddharth Parameswaran (Insurance) Macquarie Securities Tim Lawson (Insurance) Goldman Sachs Ian Abbott (Health) Bank of America Merrill Lynch Toby Langley (Insurance) Deutsche Kieren Chidgey (Insurance) Citi Mark Tomlins (I
Slide 19: For personal use only
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Slide 20: About nib
ABOUT nib For personal use only FY14 Group premium revenue of $1.5b, operating profit of $72.3m, net profit after tax of $69.8m More than 830 employees in Australia and New Zealand Australia’s 4th largest private health insurer, New Zealand’s 2nd largest private health insurer Market capital
Slide 21: PHI Covers
PHI COVERS Australia New Zealand For personal use only Public Hospital (accommodation, theatre, etc), choice of specialist Private Hospital (accommodation, theatre, etc), choice of specialist Medical specialist (surgeon, anaesthetist ) in hospital Medical specialist (surgeon, anaesthetist ) outside
Slide 22: nib's Business Strategy is Clear and Focussed
nib’s BUSINESS STRATEGY IS CLEAR AND FOCUSSED For personal use only Grow our Australian residents health insurance business (arhi) organically at circa 10% annual premium growth 1 (4-5% policyholder growth) through building national brand presence and with an emphasis on <40 market (Virgin Green), >
Slide 23: Risk Equalisation – How It Works
RISK EQUALISATION – HOW IT WORKS For personal use only The current Risk Equalisation Trust Fund (RETF), which has been in place since 1 April 2007, consists of two elements • Gross deficit (what we ‘get back’ from the pool) Consists of the Age Based Pool (ABP) and the High Cost Claims Pool (HCCP).