NIB Holdings Ltd · ASX:NHF

NIB — J.P. Morgan Emerging Companies Conference (November 2009)

21 slides from NIB's conference presentation, Nov 18, 2009

  1. Slide 1: nib holdings J.P. Morgan 18 November

    |_| ni b holdings J.P. MORGAN 18 NOVEMBER

  2. Slide 2: For personal use only

    For personal use only ƒ Healthcare spending context ƒ About nib and our challenges ƒ Progress thus far ƒ Looking ahead

  3. Slide 3: Healthcare

    |_| ni b holdings HEALTHCARE

  4. Slide 4: Worldwide healthcare costs are rapidly increasing

    Worldwide healthcare costs are rapidly increasing For personal use only ƒ Across OECD, healthcare spending has for the past 50 years increased at GDP + 2% % 1960 2008 USA 5.1 16.0 Australia 4.7 9.7 United Kingdom 3.9 8.5 ƒUSA now spends $US 2.5 trillion pa on healthcare (cf food $1 trillion) 4

  5. Slide 5: We're all spending more because of:

    We’re all spending more because of: For personal use only ƒ Increasing wealth and incomes ƒ Ageing and longevity ƒ Cost of technology and higher utilisation ƒ The rise and rise of chronic disease ƒ Moral hazard 5

  6. Slide 6: Australian context

    Australian context ƒ Healthcare spending about $100 billion pa - $4500 per capita For personal use only ƒ Government dominated tax funded social insurance system (Medicare, PBS and public hospitals) ƒ About 9.8 million people have private hospital insurance (45% population) and 11.3 million general

  7. Slide 7: PHI participation continues to grow

    PHI participation continues to grow For personal use only ƒ In FY09 the industry grew by 3.3% or 315,269 persons covered ƒ In Q1 FY10 the industry grew by 0.8% or 94,171 persons covered ƒ As at 30 September 2009, 11.3 million Australians had private health insurance 7

  8. Slide 8: Australia with its increasing dependency ratio must embrace more private funding

    Australia with its increasing dependency ratio must embrace more private funding For personal use only Source: Australian Government (2007) 8

  9. Slide 9: About nib

    |_| ni b holdings ABOUT nib

  10. Slide 10: Snapshot

    Snapshot ƒ Only ASX listed private heath insurer – market capitalisation circa For personal use only $660 million ƒ FY09 premium income of $830 million ƒ Fifth largest insurer covering approximately 770,000 lives in all states (7.2% market share) ƒ Net assets of $361 million (as at 30 June 2009) wit

  11. Slide 11: Our challenges

    Our challenges For personal use only ƒ Growing earnings and optimising capital to achieve and sustain ROE of at least 15% ƒ Competing with a free alternative ƒ Product differentiation in a commoditised market and price competitiveness ƒ nib’s relatively small scale and playing a key role in industry

  12. Slide 12: Tackling the challenges

    Tackling the challenges For personal use only ƒ Organic growth through: • Targeting “new to category” <40 segment • Extending brand reach nationally ƒ Establish ongoing price advantage and profitability through “better risk” strategy and improved productivity/efficiency ƒ Demutualisation and ASX lis

  13. Slide 13: nib and targeting <40 segment

    nib and targeting < 40 segment For personal use only ƒ Brand reputation and positioning ƒ Fit for purpose products: • Deductibles and restrictive benefits • Emphasis on ancillary cover ƒ Price competitiveness ƒ Distribution 13

  14. Slide 14: Progress

    |_| ni b holdings PROGRESS

  15. Slide 15: nib v system growth

    nib v system growth For personal use only ƒ CAGR of 6.6% (system: 2.9%) since FY05 ƒ nib’s net policyholder growth for Q1 FY10 of 6,923 policies (same period FY09 = 6,549) or 1.8% (system: 0.8%) ƒ nib’s growth in hospital persons aged 20-39 for Q1 FY10 was 2.6% (system: 1.0%) 15

  16. Slide 16: The efficacy of our business strategy

    The efficacy of our business strategy For personal use only (%) FY05 FY06 FY07 FY08 FY09 Net policyholder growth (nib) 4.2 3.9 8.8 11.1 5.2 Net policyholder growth rate (industry) 0.8 2.1 4.2 4.2 3.2 % of new sales new to category (nib) 68.7 70.8 74.4 78.2 67.4 % of new sales “under 40” (nib) 71.7 7

  17. Slide 17: The pay off

    The pay off For personal use only ƒ Underlying earnings increased 21.8% in FY09 to $40.2 million ƒ Underlying ROE* of 11.3% in FY08 and 11.2% in FY09 ƒ TSR since listing of 73.5% (as at close of trade 17 November 2009) * Normalised investment income for FY09 calculated on the basis of 5.5% (FY08: 7.

  18. Slide 18: Looking ahead

    |_| ni b holdings LOOKING

  19. Slide 19: Looking ahead

    Looking ahead ƒ Net underwriting result forecast to increase as much as 25% in For personal use only FY10 (FY10 net underwriting result forecast of $45 - 50 million and net underwriting margin of 5-5.5%) ƒ PHI system growth of GDP +1-2% with nib consistently doing better (FY10 guidance of 4-6% net p

  20. Slide 20: For personal use only

    For personal use only

  21. Slide 21: nib holdings J.P. Morgan November

    |_| ni b holdings J.P. MORGAN 18 NOVEMBER

nib holdings — J.P. Morgan Emerging Companies Conference (November 2009) on 6ix