NIB Holdings Ltd · ASX:NHF
NIB — BBY 2007 Healthcare & Life Sciences Conference
21 slides from NIB's conference presentation, Dec 4, 2007
Slide 1: BBY 2007 Healthcare & Life Sciences Conference
For personal use only BBY 2007 Healthcare & Life Sciences Conference nib holdings limited Michelle McPherson, Deputy CEO & CFO 4 December 2007
Slide 2: Disclaimer
Disclaimer By attending this presentation, you agree that no part of this presentation or disclaimer may be disclosed, For personal use only distributed or reproduced to any third party without the consent of nib holdings limited (“nib”). This presentation is being provided as part of BBY Limited’s
Slide 3: Healthcare market and private health insurance
For personal use only Healthcare market and private health insurance
Slide 4: The healthcare market is big, and getting bigger
The healthcare market is big, and getting bigger, growing at more than twice the rate of GDP For personal use only Industry snapshot Total Aust. healthcare expenditure During 2005, Australians spent ~ $87bn on 100 Total spending ($bn) (LHS) % GDP (RHS) 10.0% healthcare (public and private) 90 Sp
Slide 5: PHI plays a relatively small but important role in the healthcare economy
PHI plays a relatively small but important role in the healthcare economy For personal use only PHI represents only 7% of healthcare spending PHI coverage Total Australian PHI contributions of $10.3bn for Other 12mths to 30 June 2006 6% P rivate health insurers The PHI industry’s value propositi
Slide 6: The PHI industry is dominated by the top players
For personal use only The PHI industry is dominated by the top 6 players Industry landscape The top 6 PHI players account for ~80% of the PHI market At 30 June 2006 there were 39 registered Remaining health health insurers, 37 of which conducted a funds 21% Medibank 27% health benefits fund, 23 of
Slide 7: The potential for growth in PHI is significant
For personal use only The potential for growth in PHI is significant… Key points Individual out-of-pocket spending is a significant opportunity PHI represents only 7% of the growing health All other medications 20% Dental services 20% economy Ambulance and community Exposure to significant growt
Slide 8: Particularly in the under 40s segment
For personal use only …particularly in the under 40s segment PHI market penetration is less than 40% in <40 segment Under 40s are relatively underinsured Only 39% of under 40s have private hospital cover <40 >40 Total — Potential organic growth opportunity of more 55% than 6.5 million people NIB
Slide 9: PHI profitability has stabilised and is now growing
Importantly, PHI profitability has stabilised and is now growing For personal use only Premium growth has been consistently above GDP Claims inflation has subsided 20% June 2002 = 19.8%. Represents lag effect on 8.0% 7.4% 7.6% claims of LHC introduction in 2000, following lapse 6.9% of initial 12 mo
Slide 10: Government policy is very supportive
For personal use only Government policy is very supportive Legislated initiatives to increase PHI take-up Medicare Levy AAsurcharge surchargeofof1% 1%ofoftaxable taxableincome incomeisislevied leviedon onthose thoseincome incomeearners earners(single (singleand andearning earningmore morethan tha
Slide 11: nib overview
For personal use only nib overview
Slide 12: nib snapshot
For personal use only nib snapshot Australia’s 6th largest health insurer headquartered in Newcastle, NSW Only ASX listed pure health insurer with a market capitalisation of ~A$580mm (as at 30 Nov 2007) Approximately 340,000 policyholders, providing cover for approximately 700,000 people (as a
Slide 13: The nib proposition
For personal use only The nib proposition nib provides value for money and easy to understand private health insurance (PHI) PHI allows access to private hospitals, choice of specialist and provides ancillary cover nib’s product design, pricing, brand positioning and distribution is designed t
Slide 14: nib financial snapshot
For personal use only nib financial snapshot Summary normalised income statement Strong capital position, ungeared balance sheet 05-08 June year end (A$m) 2005 2006 2007 2008F CAGR nib Solvency Multiple Premium revenue 530.7 611.9 666.0 750.7 12.3% Net claims incurred (incl. levies) (459.0) (500.1)
Slide 15: nib has a focused strategy to capture latent demand in PHI
nib has a focused strategy to capture the significant latent demand in PHI and particularly the <40 segment For personal use only nib’s organic growth strategy is centred on profitable expansion in the medium term Product design Product pricing nib carves out benefits that younger people are not l
Slide 16: The initial results are very promising
For personal use only The initial results are very promising Key metrics 2005A 2006A 1H07A 2H07A YTD to 30/9 2008 Target Annualised growth in net membership 4.2% 3.9% 6.6% 10.5% 18.2% 9.7% % of new sales new to PHI 68.7% 70.8% 75.9% 74.4% 81.7% n/a % of new sales <40 71.7% 73.6% 78.1% 78.8% 78.4% n/
Slide 17: nib has delivered growth well above the industry and main competitors
nib has delivered growth well above the industry and our main competitors since Dec 2002 For personal use only nib’s market share has grown steadily since 2002 Increase in persons between 20-39 with hospital coverage 7.0% Dec 02 – Jun 07 6.0% 50,000 5.0% 35,000 2002 2003 2004 2005 2006 20,000 5,000
Slide 18: Capital management and dividends
For personal use only Capital management and dividends Capital management Strong balance sheet with no gearing, positions nib for potential acquisitions In the absence of any strategic initiatives, the Board intends reviewing nib’s capital position and gearing at or around the time of release of
Slide 19: Summary
For personal use only Summary The Australian healthcare economy is forecast to continue to grow faster than GDP There is significant potential to grow the PHI category — latent demand and rising incomes — retreating Government funding and bipartisan support for PHI — stabilising claims inflation
Slide 20: Q&A
For personal use only Q&A
Slide 21: For personal use only
For personal use only 21
nib holdings — BBY 2007 Healthcare & Life Sciences Conference on 6ix