NIB Holdings Ltd · ASX:NHF

NIB — JP Morgan Emerging Companies Conference March 2010

20 slides from NIB's conference presentation, Mar 15, 2010

1. Slide 1: nib event patron Hayley Bateup

   For personal use only nib event patron Hayley Bateup (Australian surf lifesaver)

2. Slide 2: Executive summary

   Executive summary For personal use only  Growth in Australia's health expenditure (currently circa A$100 billion) has out paced GDP growth over the last decade and this is expected to continue due to • Ageing population and increased longevity • Medical inflation • Increasing affluence and incomes

3. Slide 3: Industry Overview

   For personal use only Ind str Overview Industry O er ie nib sponsored Newcastle Knights (National Rugby League Team)

4. Slide 4: Growth in Australian healthcare spending continues to outpace GDP

   Growth in Australian healthcare spending continues to o tpace GDP outpace Annual Growth in National Health Expenditure and GDP 16.0% For personal use only 14.0% 12.0% 10.0% Growth 8.0% 6.0% %G 4.0% 2.0% 0.0% -2.0% -4.0% 4 0% Jun-80 Jun-81 Jun-82 Jun-83 Jun-84 Jun-85 Jun-86 Jun-87 Jun-88 Jun-89 Jun-9

5. Slide 5: Government outlays account for almost 70% of spending, part of which supports PHI

   Government outlays account for almost 70% of spending, part of which hich supports s pports PHI For personal use only Government PHI policies Medicare Levy  A surcharge on taxable income levied on middle and high income earners without PHI Surcharge¹  The surcharge is currently 1% of taxable incom

6. Slide 6: PHI accounts for a relatively small part of spending (13%) but is growing

   PHI accounts for a relatively small part of spending (13%) b t is growing but gro ing For personal use only Health insurance penetration rates - hospital treatment coverage (insured persons as a percentage of population 1990 to 2009) 60% 55% 50% 45% 40% 35% 30% 25% 20% 01-Mar-90 01-Mar-91 01-Mar-92

7. Slide 7: Market concentrated at top end, fragmented and expected to consolidate

   Although there is market concentration at the top end, the k t iis fragmented PHI market f t d and d is i expected t d to t further f th consolidate For personal use only  At 30 June 2009 there were 37 private health insurers operating in Australia Remaining Funds 22.2% Medibank  Of these, th 13 w

8. Slide 8: PHI must play a greater role in future funding of Australian healthcare

   Inevitably, PHI must play a greater role in the future funding of Australian healthcare as current Government relative funding not sustainable For personal use only Source: The 2010 Intergenerational Report 7 7

9. Slide 9: About nib

   About nib For personal use only 8 nib sponsored Geelong Cats (Australian Football League Team and 2009 Premiers)

10. Slide 10: nib is Australia's only listed health insurer

    nib is Australia’s only listed health insurer For personal use only  ASX ticker - nhf  Shares on issue – 495, 925, 501  Share price (11 March 2010) - A$1.225  Market capitalisation - A$608m  Australia’s fifth largest health fund (only listed Australian private health insurer)  Approximately A

11. Slide 11: Performance since listing has been strong

    Performance since listing has been strong For personal use only FY08 FY09 1H10 Pre-tax underwriting result (A$m) 33.0 40.2 30.5 Net underwriting margin (%) 4.4 4.8 6.8 Profit before tax (A$m) 37.6 31.6 61.5 NPAT (A$m) 26.7 23.8 43.1 EPS (Acps) 5.2 4.7 8.7 ROE (%) 7.0 6.6 18.0 TSR ((%))1 ((38.0)) 58.

12. Slide 12: nib's strategy is focused and clear

    nib’s strategy is focused and clear For personal use only 1 Target under 40s market segment, extend brand reach and improve retention to achieve above system organic growth Maintain net underwriting margin in range of 5-6% with emphasis on reducing claims inflation and increased 2 operating efficien

13. Slide 13: And results so far impressive

    And results so far impressive p For personal use only (%) FY06 FY07 FY08 FY09 1H10 Net p policyholder y g growth ((nib)) 3.9 8.8 11.1 5.2 2.4 Net policyholder growth (industry) 2.1 4.2 4.2 3.3 1.2 % of new sales new to category 70.8 74.4 78.2 67.4 64.1 % of new sales “under 40” target segment 73.6 7

14. Slide 14: Financial Snapshot

    Financial Snapshot For personal use only (A$m) FY07 FY08 FY09 1H10 Premium revenue 666.0 758.2 829.5 446.1 Gross Margin 94.9 111.2 122.0 71.2 Management expenses (71.2) (78.2) (81.8) (40.7) Net margin 23.7 33.0 40.2 30.5 Net investment return 31.3 7.5 (1.8) 33.6 Other income 1.2 1.4 1.1 0.7 Other ex

15. Slide 15: Balance Sheet

    Balance Sheet nib has a strong capital base and no debt For personal use only (A$m) At 31 Dec 09 Current assets Cash and cash equivalents 161.5 Financial assets at fair value through p&l 259.2 Other current assets 35.4 Total current assets 456.1 Non-current assets Available-for-sale financial assets

16. Slide 16: Investments

    Investments For personal use only Annualised Investment (%) Investment Split Return 1H09 1H10 1H09 1H10 Cash 6.5 4.3 37.3 35.5 Australian fixed interest 22.5 7.2 23.2 21.5 O/s fixed interest (10.8) 25.8 15.4 16.6 Direct property 5.9 5.9 7.4 6.7 Australian shares (47.7) 64.3 6.8 8.7 O/s shares (55 5)

17. Slide 17: Capital management

    Capital management For personal use only  nib maintains a “war chest” for M&A and there are opportunities to optimise capital structure through debt  As at 31 December 2009, nib had capital of A$156.3 million above its prudential target (1.4X), after allowing for the interim dividend  nib intends

18. Slide 18: Key enterprise risks

    Key enterprise risks For personal use only Market  Macro-economic environment  Heightened competitor activity  Claims inflation Sovereign  Premium pricing  National Health and Hospital Reform Commission Investment  Market volatility  Surplus S l capital it l and d sub-optimal b ti l returns t

19. Slide 19: Summing up

    Summing up For personal use only  nib is a “challenger brand” alread already making significant progress in increasing market share through focused organic growth strategy  Strong earnings S i accretion i can b be expected d to continue, i d driven i b by organic i growth h and hopefully M&A  The

20. Slide 20: JP Morgan Emerging Companies Conference March 2010

    JP Morgan Emerging Companies Conference March 2010 / =~: ee ~~ " z Ne wih if) » 4 prlisevii va saa bm ~

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