NIB Holdings Ltd · ASX:NHF

NIB — Shareholder Meeting (October 2010)

29 slides from NIB's shareholder meeting presentation, Oct 26, 2010

  1. Slide 1: Tuesday 26 October 2010

    For personal use only Tuesday 26 October 2010

  2. Slide 2: Introduction: nib's Board and Executive

    INTRODUCTION For personal use only nib’s Board and Executive  Keith Lynch, Chairman  Brian Keane Keane, Independent Non-Executive Director  Philip Gardner, Independent Non-Executive Director  Steve Crane, Independent Non-Executive Director  Dr Annette Carruthers, Independent Non-Executive Direc

  3. Slide 3: Meeting Schedule

    MEETING SCHEDULE For personal use only  Chairman’s Address  Managing Director’s Address  Notice of Meeting g  Consideration of Reports p  Remuneration Report  Re-election of Dr Annette Carruthers  Election of Mr Steve Crane  Approval of participation in the Long Term Incentive Plan  Cancell

  4. Slide 4: For personal use only

    For personal use only

  5. Slide 5: Chairman's Year in Review

    CHAIRMAN’S YEAR IN REVIEW For personal use only  FY10 was highlighted by delivery of strong results across our key financial indicators and greater shareholder value.  Key Performance Metrics:  Strong policyholder growth rate of 5.9% more than double the industry average.  Underwriting U d iti p

  6. Slide 6: Chairman's Year in Review: Shareholder returns

    CHAIRMAN’S YEAR IN REVIEW For personal use only  Shareholder returns  Strong FY10 performance and capital position has allowed the Board to declare dividends totalling 7.0 cents per share fully franked for the year which totalled $34 $34.77 million or a payout ratio of 56 56.4% 4% (reflects an int

  7. Slide 7: Capital Position and Investment Opportunities

    CHAIRMAN’S YEAR IN REVIEW For personal use only  Capital Position and Investment Opportunities  As at 30 September 2010 and following the acquisition of IMAN, nib had capital of $120.8 million above its current internal prudential target (1.4X). (1 4X)  Our solid capital position and debt free ba

  8. Slide 8: GMHBA Proposal

    CHAIRMAN’S YEAR IN REVIEW For personal use only  GMHBA Proposal p  nib has submitted a merger proposal to GMHBA. The proposal includes a number of undertakings including maintaining GMHBA’s branch network network, products and applying nib’s no forced redundancy policy. g centre upon  The benefit

  9. Slide 9: Cancellation of shares held by Overseas Policyholders & Unverified Policyholders Trust

    CHAIRMAN’S YEAR IN REVIEW For personal use only  Cancellation of shares held by the Overseas Policyholders & Unverified Policyholders Trust  Through the demutualisation of nib and listing on the ASX in 2007, more than 320,000 eligible nib policyholders were offered between 300 and 6,000 shares in

  10. Slide 10: nib foundation

    CHAIRMAN’S YEAR IN REVIEW For personal use only  nib foundation  nib foundation remains a great legacy of nib’s demutualisation.  This year, year the foundation announced $4.8 $4 8 million in National Partnership funding for three programs. • Hunter Institute of Mental Health’s: Partners In Depre

  11. Slide 11: Share price performance versus the market

    CHAIRMAN’S YEAR IN REVIEW For personal use only  Over the past 12 months our share price has performed broadly in line with the market 115 nib All Ordinaries 110 Relative perfformance (%) 105 100 95 90 85 80 75 70 26‐Oct‐09 26‐Dec‐09 26‐Feb‐10 26‐Apr‐10 26‐Jun‐10 26‐Aug‐10  Focus for FY11 and beyo

  12. Slide 12: For personal use only

    For personal use only

  13. Slide 13: FY10 Headlines

    FY10 HEADLINES For personal use only  Net underwriting result (pre-tax) of $47.1 million (net margin 5.2%) – up 17.2%.  Net investment return of $44.5 million (10.5% return pa).  Net consolidated profit after tax of $61.5 million - up 158%.  Cash inflow from operating activities of $66.3m (FY09:

  14. Slide 14: Premium Revenue

    PREMIUM REVENUE For personal use only  Premium revenue up 8.7% to $901.4m $901 4 reflecting fl i continued i d organic i growth, product buy-up and premium increases.  Net policyholder growth of 5.9%.  Product buy-up estimated to have had h d a $7 $7.7m 7 premium i revenue impact.  nib’s 2010 pp

  15. Slide 15: Policyholder Growth

    POLICYHOLDER GROWTH For personal use only  With 7.3% market share, nib accounted for 14 3% of national growth in FY10 (FY09: 14.3% 11.0%).  With 10.2% market share in the 20-39 age group nib accounted for 31 group, 31.1% 1% of total industry growth (FY09: 25.5%).  FY10 growth continues to reflect

  16. Slide 16: Claims Expense

    CLAIMS EXPENSE For personal use only  In FY10, nib incurred $767.9m in claims, state levies and risk equalisation producing a claims ratio of 85.2%.  Risk equalisation remains an ongoing i concern – in i FY10 nib’s ib’ risk i k equalisation contribution was $109.9m, up 27.2% on FY09.  Managing cl

  17. Slide 17: Management Expense Ratio (MER)

    MANAGEMENT EXPENSE RATIO (MER) For personal use only  FY10 MER of 9.6% 9 6% was within our forecast target of 9.5% - 10%.  Lowest MER result achieved since nib demutualised in 2007.  MER result was achieved notwithstanding the forecast significant investment in business automation, IT and organic

  18. Slide 18: Underwriting Result

    UNDERWRITING RESULT For personal use only  Net underwriting result up 17.2% to $47.1m in FY10, producing net underwriting margin of 5.2%.  Since the end of FY07, have increased pre-tax underwriting margin by 98.7% from $23.7m (normalised) to $47.1m.  Business goal is to increase underlying earnin

  19. Slide 19: New Revenue and Earnings

    NEW REVENUE AND EARNINGS For personal use only  Acquisition of IMAN International (completed on 30 September 2010), a specialist provider of health cover for temporary migrant workers. Market is estimated to have written $180m in premiums d i FY10 during FY10.  Launch of an overseas product for ov

  20. Slide 20: Investment Returns

    INVESTMENT RETURNS For personal use only  Significantly improved investment returns t for f FY10 due d tot broader b d global l b l economic recovery.  Net investment returns of $44.5m or 10.5% for FY10 are in stark contrast to net investment losses of $1.8m or (0.4)% in FY09.  Overall, portfolio

  21. Slide 21: Holding Company Costs

    HOLDING COMPANY COSTS For personal use only  Decrease in share registry costs largely due to reduction in number of shareholders as a result of UMP Sale Facility in August 2009 (annualised savings of approximately $0.5m) and new share registry agreement.  Further reduction in share registry expens

  22. Slide 22: Key Profitability & Performance Metrics

    KEY PROFITABILITY & PERFORMANCE METRICS For personal use only  Earnings E i per share h 164% hi higher h in FY10 to 12.4 cents (FY09: 4.7c).  Return on equity (ROE) of 16.3%, above our target of 15%.  Full year dividend of 7.0 cps (2.0 cps interim, 5.0 cps final), reflecting payout ratio of 56.4%

  23. Slide 23: Capital Management

    CAPITAL MANAGEMENT For personal use only  As at 30 September 2010, nib had capital of $120.8 million above its current internal prudential target (1 (1.4X). 4X) nib intends to retain capital above its prudential target in the near term to fund potential M&A investment opportunities.  The Board has

  24. Slide 24: Service and Innovation

    SERVICE AND INNOVATION For personal use only  nib customer satisfaction remains high  Since February 2010, nib has conducted more than 14,000 customer surveys using a Net Promoter Score (NPS) methodology.  Average satisfaction is 8.24 out of a possible 10.  During FY10 our website attracted appr

  25. Slide 25: Service and Innovation

    SERVICE AND INNOVATION For personal use only  Call centre volume has increased by almost 25% since FY07, while average speed of answer has improved by more than 40% 40%. FY07 FY10 % Change Number of calls to nib call centre 673,701 836,476 162,775 Average speed of answer (seconds) 64 37 - 27  Appr

  26. Slide 26: Key Enterprise Risks

    KEY ENTERPRISE RISKS For personal use only  Economic ggrowth and competitor p activity y  Sovereign especially pricing  Claims Cl i iinflation fl i especially i ll risk i k equalisation li i  IMAN and overseas student’s business 26

  27. Slide 27: Business Strategy

    BUSINESS STRATEGY For personal use only  Continue to invest in organic growth (Virgin Green) with emphasis upon:  Younger better risk policyholders  Interstate I t t t expansion i  Online engagement  I Improve policyholder li h ld “b “buy-up”” and d retention t ti  Continue to actively pursue

  28. Slide 28: FY11 Outlook & Guidance

    FY11 OUTLOOK & GUIDANCE For personal use only  Australia’s future health care will inevitably require greater private funding and there remains latent demand for PHI - FY11 net policyholder growth of 5% – 6% (FY10: 5.9%).  Margins under pressure but manageable manageable, FY11 net underwriting mar

  29. Slide 29: Tuesday 26 October 2010

    For personal use only Tuesday 26 October 2010

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