NIB Holdings Ltd · ASX:NHF
NIB — Investor Day (November 2021)
77 slides from NIB's investor day presentation, Nov 9, 2021
Slide 1: ASX announcement cover letter: 2021 Investor Day Presentation
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 9 November 2021 For personal use only Company Announcements Office ASX Limited 20 Bridge Street SYDNEY NSW 2000 nib holdings limited 2021 Investor Day P
Slide 2: 2021 Investor Day
For personal use only 2021 INVESTOR DAY 9 November 2021
Slide 3: Disclaimer
Disclaimer For personal use only No representation or warranty, express or implied, is made as to the fairness, accuracy, reliability, completeness or correctness of information contained in this presentation, including the accuracy, likelihood of achievement or reasonableness, fairness, accuracy, r
Slide 4: Acknowledgement of country
Acknowledgement of country For personal use only nib acknowledges Aboriginal and Torres Strait Islander peoples as the First Australians, and pays respect to Elders past, present and emerging across all the lands on which we operate. We acknowledge the rich and meaningful contribution they make to l
Slide 5: Agenda
Agenda TIME TOPIC PRESENTERS For personal use only 9.00am Welcome and P2P future state overview Mark Fitzgibbon – CEO/Managing Director 9.15am Personalisation Edward Close – Chief Executive, Australian Residents Health Insurance Q&A James Barr – Chief Executive, International Visitors Robert Hennin
Slide 6: Our purpose: your better health
Our purpose: your better health For personal use only Our purpose is your better health. We are a trusted partner in helping our members and travellers make more informed healthcare decisions, transact with healthcare systems and generally live healthier lives. 5
Slide 7: Payer to Partner (P2P) 2025 target future state
Payer to Partner (P2P) PHI enhancement 2025 target future state & expansion For personal use only New Claims cost markets effectiveness Honeysuckle Government & Health 3rd party programs Personalisation Organisational Performance Social & environmental capabilities measurement responsibilities 6
Slide 8: Personalisation
Personalisation For personal use only We’ve applied data science in developing deep insight into the health risk of individuals and how it is best managed and treated. We’ve equipped them with integrated digital tools for seamless engagement with us and the healthcare system. Members are able to acc
Slide 9: nib's personalisation experience
nib’s personalisation experience For personal use only HEALTH NAVIGATOR CUSTOMER NEEDS SERVICE OFFERS Digital onboarding Digital Membership Card BEING Digital Health Record (Snug) HEALTHY Understand the state of my health Smart HRA & Good Health Plan (Honeysuckle Health) Help me, I’m feeling
Slide 10: Jane's customer journey example
At 23, Jane doesn't have 7. Jane purchases hospital cover as an health insurance but still add on to her "green pass" membership For personal use only values her health and skincare pack 6. Jane's lifestyle changes as She can’t justify spending that much of her income she gets older and is on someth
Slide 11: Personalised digital member health experience (iihi)
Personalised digital member health experience (iihi) For personal use only “I’m feeling unwell but I’m not “How do I find a doctor?” “How do I access medicine and sure what I should do?” other treatments to get better?” Connect & consume Pharmaceutical service & delivery Digital-health Consult your
Slide 12: Personalisation: the future of NZ healthcare
Personalisation: the future of NZ healthcare For personal use only High • Risk stratification to establish programs – reduce chronic 4% avoidable care • Avoid hospital admissions Low chronic 20% • Establish digital programs with strong ROI nib Health Management Programs: At risk 26% Cancer Care Heal
Slide 13: Questions
For personal use only QUESTIONS
Slide 14: PHI enhancement & expansion
PHI enhancement For personal use only & expansion We’ve expanded our value proposition and differentiated nib in PHI markets by making membership as much about supporting good health as it is the treatment of sickness and injury. Better containment of claims inflation has made pricing all the more c
Slide 15: PHI expansion – arhi
PHI expansion – arhi • 1+ new whitelabel and/or M&A opportunity For personal use only Assumptions • Significant reduction in fund lapse rate and multi brand sales drives strong net policyholder growth FY25 - 800k 600k nib policies | 200k policies under whitelabel or standalone brands • Heightened he
Slide 16: arhi go-to-market strategy
arhi go-to-market strategy For personal use only 1 DTC BROKER GEOGRAPHIC STRENGTH Eastern Southern & Southern & VIC, TAS, VIC, WA, NSW, ACT, National NSW, WA QLD, TAS SA seaboard western states eastern states WA, SA ACT, NT AGE TARGET 20-44yo 50+ 20-50yo 20-49yo 20-44yo 20-50yo 25-44yo 25-54yo 50+ S
Slide 17: PHI expansion – ishi
PHI expansion – ishi For personal use only FY25 - 220k • System returns to FY19 levels by end FY23 190k nib AU students | 33% Share1 Assumptions • FY23+ system growth circa 10% pa 30k NZ students • Potentially deregulated & risk-rated International students: nib vs student visas Market • Material pr
Slide 18: PHI expansion – iwhi
PHI expansion – iwhi For personal use only FY25 • Strong demand for skilled migration Assumptions • System returns to FY19 levels by end FY23 100k nib AU workers | 25% Share1 • FY23+ system growth circa 15% pa 450,000 International workers • Risk selection & assessment Market 400,000 Conditions • En
Slide 19: PHI expansion – nz
PHI expansion – nz For personal use only FY25 • Stable economy Assumptions 150,000 members • Increased PHI relevance 200000 Policyholders 180000 • Increasing regulation Market conditions • Claims inflation driven by diagnostics and 160000 public wait lists 140000 120000 • Identify & prevent disease
Slide 20: Living benefits
Living benefits For personal use only P2P value creation: Potential living benefits New non-PHI products into Digital first Active precise Enhanced PHI value new addressable markets engagement health management proposition & growth $2.45b revenue pool P2P streams: Memberships / Subscriptions / Packs
Slide 21: Kiwi Insurance acquisition
Kiwi Insurance acquisition For personal use only • Purchasing Kiwi Insurance (subject to RBNZ approval) – NZ$45m plus NZ$8m transaction and integration costs • Enables nib to sell more health insurance combined with living benefits insurance • Creates long term partnership with Kiwibank • One of New
Slide 22: Questions
For personal use only QUESTIONS
Slide 23: New markets
New markets For personal use only We’ve entered and grown new markets with a non-PHI membership offering and treatment packages specific to a wide range of conditions. We’ve differentiated and grown our travel product. Our Chinese business is significant. We’ve entered, differentiated and grown our
Slide 24: New products into new markets
New products into new markets For personal use only We connect the experience together through member-centric tools, experiences and new health propositions to achieve 200k non-PHI members by 2025 across three broad categories. FREEMIUM "GREEN HEALTH MANAGEMENT HEALTH TREATMENT PACKS PASS" MEMBERSHI
Slide 25: nib's membership experience of the future
nib’s membership experience of the future For personal use only Shine a light on your health. nib.com.au 24 24
Slide 26: Recovery of travel industry
Recovery of travel industry For personal use only Significant tailwinds for travel recovery Vaccination program Travel restrictions Industry gear up for Significant pent-up gaining momentum being relaxed border reopening travel demand globally AU removes international Qantas resumed "International t
Slide 27: China JV progressing
China JV progressing For personal use only JV formed with Tasly FY19 Online sales permit approve JiTai Online sales permit approved FY22 Team established on Tasly Campus acquired with CBIRC Licence FY21 Selling health services and insurance Commenced selling Group Health Plans First health insurance
Slide 28: NDIS opportunity
NDIS opportunity For personal use only • NDIS Plan Management has been identified as an opportunity. NDIS Participants ('000) 859 • NDIS spend now exceeds PHI spend. 670 630 586 • Agency character - compatible and overlapping capabilities. 467 530 392 • Immature and fragmented market – over 900 plan
Slide 29: Questions
For personal use only QUESTIONS
Slide 30: Break 15 min
For personal use only BREAK 15MIN
Slide 31: Claims cost effectiveness
Claims cost effectiveness For personal use only We’ve contained treatment and claims cost inflation through more precise and effective disease prevention and management. Savings has been passed through to members and travellers in the form of more competitive premiums and/or improved service benefit
Slide 32: arhi sustainable margin structure
arhi sustainable margin structure For personal use only arhi Margins Average FY19-21 Target Revenue 100.0% 100% Claims -81.6% 83-84% Marketing MER -4.1% 4-5% nib arhi revenue and claims growth Other MER -6.6% 5-6% 8% Net Margin 7.7% 6-7% Acquisition of 6% GU Health 4% • Target 83-84% claims as % of
Slide 33: Managing revenue/pricing against claims inflation
nib has a sustained history of effectively managing revenue/pricing against claims/inflation For personal use only nib arhi revenue/claims per policy ($ p.a.) nib price increase – 5 year period average 8.00% 3,900 7.00% 6.00% 3,400 5.00% 4.00% 3.00% 2,900 2.00% 1.00% 0.00% 2002-2006 2007-2011 2012-2
Slide 34: nib looks to manage claims inflation holistically
nib looks to manage claims inflation holistically For personal use only We continually address claims inflation through a combination of predictive, preventative and remediation capabilities to mitigate adverse selection and reduce unwarranted claims exposure. Financial forecasting & pricing Marketi
Slide 35: Questions
For personal use only QUESTIONS
Slide 36: Honeysuckle Health
Honeysuckle Health For personal use only By FY25 the Honeysuckle Health portfolio of business lines has helped nib improve health outcomes and contain claims exposure. Significantly, it has grown revenue and earnings across a wide client base. $60m 15 100k 5-10 revenue health engagements non-nib man
Slide 37: Government & 3rd party programs
Government & For personal use only 3rd party programs We’ve demonstrated our capacity to improve health outcomes and cost effectiveness within discrete populations on behalf of Government and other healthcare payers. Partner with three Ngāti Whātua Capacity and regional Ōrākei and three credentials
Slide 38: Government and 3rd party opportunities
Government and 3rd party opportunities For personal use only Total Australian health expenditure by source of funds • $196 billion health spending in Australia - $134 million (68%) by governments1. Growing 7% dependency ratio is rendering this level of public spending unsustainable. • Likely further
Slide 39: Social and environmental responsibilities
Social and environmental For personal use only responsibilities We approach our environmental, social and governance responsibilities with sincerity, conviction and effectiveness. Our effectiveness in improving health outcomes especially within communities of greatest need is our most significant co
Slide 40: Sustainability at nib
Sustainability at nib For personal use only Further detailed information and targets available in the nib 2021 Sustainability Report. nib.com.au/shareholders/company- profile/sustainability 39
Slide 41: Population health – project pilots
Population health – project pilots For personal use only Objective: improve the health of individuals within defined populations. The problem Better • Health outcomes are poorer in many rural and remote communities. health outcomes • Fragmentation in funding responsibility and accountability for hea
Slide 42: Ngāti Whātua Ōrākei: supporting iwi health and wellbeing
Ngāti Whātua Ōrākei: supporting iwi health and wellbeing For personal use only 41
Slide 43: Questions
For personal use only QUESTIONS
Slide 44: Organisational capabilities
Organisational For personal use only capabilities We continue to develop talent and advanced technological capability across the Group. Distributed working is a norm and employees are able to recite our business strategy and values. Technology is acknowledged as a key competitive advantage. We provi
Slide 45: Life at nib
Life at nib For personal use only • Default no longer offices Engaged and productive workforce • Our people choose where they work Tap into broader talent pools • Hubs provided for specific purpose e.g. workshops and events where Create inclusive environment • Flexibility to balance work and l
Slide 46: Life at nib
For personal use only Life at nib 45
Slide 47: Digital health ecosystem
Digital health ecosystem For personal use only Health Healthcare delivery will Clinical record Risk profile & good health shift rapidly towards decision support management plan digital technology Provider DIGITAL access & The Digital Health Ecosystem of the Subscriptions HEALTH connectivity future i
Slide 48: Digitised payments in action
Digitised payments in action For personal use only LanternPay revolutionises payments for pharmacy and pathology • On-the-spot, paperless claims at over 1,000 pharmacies. • Operational efficiencies, faster claiming times and better for the environment (no more printing receipts). • Automation of ~70
Slide 49: Group technology strategy
Group technology strategy For personal use only Business Cybersecurity & IT Risk DATA intelligence Automation Engage Cloud Transformation members & travellers Integrate Technology to Transact DIGITISE Empower THE CORE employees Customer Centricity Governance Collaboration Workplace of the Future Pro
Slide 50: Core PHI technology strategy
Core PHI technology strategy For personal use only • Dedicated capability Cybersecurity & IT Risk growing average 22% Business YoY DATA intelligence • The bar keeps rising • ISO27001 and APRA Automation CPS234 Engage Cloud Transformation members & travellers Integrate Technology to Transact DIGITISE
Slide 51: Core PHI technology strategy
Core PHI technology strategy For personal use only Cybersecurity & IT Risk Business DATA intelligence Automation • Early adopters (2015) with AWS Engage Cloud Transformation members • Cloud / SaaS first & travellers approach and the shift from capex to opex • GU WHICS APRA Integrate engagement Techn
Slide 52: Core PHI technology strategy
Core PHI technology strategy For personal use only Cybersecurity & IT Risk Business DATA intelligence Automation Engage Cloud Transformation members & travellers • “Hollow Out” legacy Integrate platform strategy Technology to Transact • Payment platforms – Apple Pay, LanternPay, DIGITISE Whitecoat E
Slide 53: Core PHI technology strategy
Core PHI technology strategy For personal use only Cybersecurity & IT Risk Business DATA intelligence Automation Engage Cloud Transformation members & travellers Integrate Technology to Transact DIGITISE Empower THE CORE employees • CRM rollout Customer Centricity • Continued investment Governance i
Slide 54: Core PHI technology strategy
Core PHI technology strategy For personal use only Cybersecurity & IT Risk Business DATA intelligence Automation Engage Cloud Transformation members & travellers Integrate Technology to Transact DIGITISE • Hybrid working Empower THE CORE employees employee pane of glass Customer Centricity Governanc
Slide 55: Business Services strategic focus
Business Services strategic focus For personal use only A trusted partner, delivering valuable and customer centric service experiences. Develop the workplace & Accelerate digital Become the leader Deliver operational Enable value creation & workforce of the future transformation in customer experie
Slide 56: Chatbot and voicebot in action
Chatbot and voicebot in action For personal use only First point of contact for members when they call nib’s contact centre • Learns from members evolving needs and constantly improves. • nib’s 24/7 voice-based bot, nibby voice, launched June 2021: • In the first month achieved 9% reduction in call
Slide 57: Questions
For personal use only QUESTIONS
Slide 58: Performance
Performance For personal use only We are able to measure progress and success in achieving our purpose of “your better health” and commercial objectives. Commercial performance indicators: Purpose performance indicators: • Group revenue • Population health and wellbeing • Group underlying operating
Slide 59: Break 30 min
For personal use only BREAK 30MIN
Slide 60: Our purpose: better pathways to better health
For personal use only OUR PURPOSE Better pathways to better health 59
Slide 61: Strategic rationale
For personal use only STRATEGIC RATIONALE • Both the Australian and New Zealand healthcare • Healthcare is at the beginning of a transformation from markets are significant. Australia spends $196 billion “one size fits all sickcare” to “personalised healthcare”. annually on healthcare, New Zealand $
Slide 62: Our vision / business process
For personal use only OUR VISION BUSINESS PROCESS WELLBEING & LIFESTYLE ADVISORY PRE-DISEASE PROSPECTIVE CLIENT BASE • PRIVATE PAYERS DATA & ANALYTICS • PUBLIC PAYERS CARE DELIVERY PHARMA CARE SUPPORT POST CARE 61
Slide 63: Our principles
For personal use only OUR PRINCIPLES Honeysuckle Health was established on 4 main principles: 1. Investment in prevention and primary care 2. Putting general practitioners at the centre of care delivery 3. Focus on value-based healthcare 4. Use of data science to inform decision-making 62
Slide 64: Business lines
For personal use only BUSINESS LINES HEALTHCARE HEALTH HEALTH SERVICES ANALYTICS & AI PROGRAMS CONTRACTING • Health program • Health program • Hospital measurement & • delivery contracting evaluation • Health program • Medical • Provider management contracting benchmarking • Provider • Consultancy &
Slide 65: Healthcare analytics & AI
For personal use only HEALTHCARE ANALYTICS & AI • The function is both a service, and enabler for other business lines • Team size is currently 12 including 2 medical doctors • Team is doing genuine data science work • Key capabilities include: – Data management and preparation – Health program targ
Slide 66: Health program targeting & evaluation
For personal use only HEALTH PROGRAM TARGETING & EVALUATION • Assessing the clinical and commercial impact of Health Management Programs • Using Cigna and Honeysuckle developed IP which utilises a data science technique known as Coarsened Exact Matching (CEM) we can report on: – Health outcomes – Me
Slide 67: Provider & specialist benchmarking
For personal use only PROVIDER & SPECIALIST BENCHMARKING • Delivery to payers and providers benchmarking services to inform negotiations • Clients are provided access to dashboards showing their data compared to other participants • Opportunity to collect Patient Reported Outcome Measures (PROMs) on
Slide 68: Example dashboard – ICU conversion by hospital group
EXAMPLE DASHBOARD – ICU CONVERSION BY HOSPITAL GROUP For personal use only DEIDENTIFIED DATA 67
Slide 69: Health program management & delivery
For personal use only HEALTH PROGRAM MANAGEMENT & DELIVERY Data-driven feedback loops are essential for program optimisation PROGRAM DELIVERY Data science capability applied to evaluate clinical and commercial HEALTH PROGRAM SELECTION SELECTION OF PATIENTS effectiveness of each MANAGEMENT STRATEGY i
Slide 70: Health management programs
For personal use only HEALTH MANAGEMENT PROGRAMS • Leveraging Cigna expertise and • Delivered by registered nurses, to relationships to deliver “integrated accompany the usual care services” provided by the specialist or GP • Four telephonic programs: • Chronic Disease Management Program compliant -
Slide 71: Health management programs
For personal use only HEALTH MANAGEMENT PROGRAMS Up to $266 AUD PROGRAM PRESENT STATE Hospital Support • Most mature program (MVP April, 2020) • Enrolments to date: 5,433 Medical savings per hospital support program (Medical) • Fully launched in July 2020 • Program graduations: 5,160 case • Enrolmen
Slide 72: Health services contracting
For personal use only HEALTH SERVICES CONTRACTING • HH is seeking to establish itself as • Balancing optimal health outcomes a health services buying group with the ongoing affordability and through formal authorisation with sustainability of the sector the ACCC • Points of difference from other • n
Slide 73: ACCC authorisation
For personal use only ACCC AUTHORISATION • On 21 September 2021, the ACCC authorised Honeysuckle Health to act as a buying group for healthcare funders • Authorisation is for five years and covers hospital contracting (HPPAs), medical specialist contracting (MPPAs), medical gap schemes and general t
Slide 74: Clinical Partners Program
For personal use only CLINICAL PARTNERS PROGRAM Partnering with orthopaedic surgeons • No medical out-of-pocket expenses for hip and knee joint replacements • Where clinically appropriate, as determined by the specialist, patients can recover in the comfort of their own home • Model is based on care
Slide 75: Clients beyond nib
For personal use only CLIENTS BEYOND nib Market feedback has validated the potential breadth of our target client cohorts to include: • Health insurers • Workers compensation & CTP insurers • Life insurers • State Governments including Local Health Districts • Federal Government • Government Agencie
Slide 76: Questions
For personal use only QUESTIONS
Slide 77: Closing remarks
For personal use only CLOSING REMARKS