NIB Holdings Ltd · ASX:NHF

NIB — BBY Healthcare and Life Science Conference 2009

20 slides from NIB's conference presentation, Nov 24, 2009

  1. Slide 1: nib holdings Healthcare and Life Science Conference

    | nib holdings HEALTHCARE AND LIFE SCIENCE CONFERENCE 24 NOVEMBER

  2. Slide 2: For personal use only

    For personal use only  Healthcare spending  About nib and our challenges  Progress thus far  Looking L ki ahead h d

  3. Slide 3: Healthcare

    =) nib holdings HEALTHCARE

  4. Slide 4: Worldwide healthcare costs are rapidly increasing

    Worldwide healthcare costs are rapidly increasing For personal use only  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  USA 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  Increasing wealth and incomes  Ageing and longevity  Cost C t off technology t h l and d hi higher h utilisation tili ti  The rise and rise of chronic disease  Moral hazard 5

  6. Slide 6: Australian context

    Australian context For personal use only  Healthcare spending about $100 billion pa - $4500 per capita  Government dominated tax funded social insurance system (Medicare, PBS and public hospitals)  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  In FY09 the industryy grew g by y 3.3% or 315,269 ppersons covered  In Q1 FY10 the industry grew by 0.8% or 94,171 persons covered  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 For personal use only mustt embrace b more private i t funding f di Source: Australian Government (2007) 8

  9. Slide 9: About nib

    =) nib holdings ABOUT nib

  10. Slide 10: Snapshot

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

  11. Slide 11: Our challenges

    Our challenges g For personal use only  Growing earnings and optimising capital to achieve and sustain ROE of at least a eas 15% 5%  Competing with a free alternative  Product differentiation in a commoditised market and price competitiveness  nib’s relatively small scale and playing a key role

  12. Slide 12: Tackling the challenges

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

  13. Slide 13: nib and targeting <40 segment

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

  14. Slide 14: Progress

    =) nib holdings PROGRESS

  15. Slide 15: nib v system growth

    nib v system growth For personal use only  CAGR of 6.6% (system: 2.9%) since FY05  nib’s net policyholder growth for Q1 FY10 of 6,923 policies (same period 09 = 6,5 FY09 6,549)9) o or 1.8% 8% (syste (system: 0.8%) 0 8%)  In Q1 FY10 nib accounted for 17% of total industry growth  nib’s growth in

  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 68.7 70 8 70.8 74 4 74.4 78 2 78.2 67 4 67.4 % of new sa

  17. Slide 17: The pay off

    The pay off For personal use only  Underlying earnings increased 21.8% in FY09 to $40.2 million  Underlying ROE* of 1111.3% 3% in FY08 and 1111.2% 2% in FY09  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%

  18. Slide 18: Looking ahead

    =) nib holdings LOOKING

  19. Slide 19: Looking ahead

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

  20. Slide 20: nib holdings Healthcare and Life Science Conference

    | nib holdings HEALTHCARE AND LIFE SCIENCE CONFERENCE 24 NOVEMBER

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