The extraordinary disruption and tragedy for so many brought on by the pandemic didn’t stop us posting another strong result in FY21. Group underlying revenue grew 2.9% to $2.6 billion, underlying operating profit by 39.5% to $204.9 million and earnings per share by 82.4% to 35.2 cents. Return on invested capital (ROIC), my favoured measure, was an impressive 19.1%.

In relation to earnings and year on year comparisons, it’s worth me highlighting the impact of the pandemic on business activity and accounting. Neither FY21 nor FY20 can be considered “normal” given the “see sawing” of healthcare treatment and claims experience as well as extraordinary initiatives taken to support members which David has already described.

Nevertheless, accounting principles have done their job well and the commercial results reliably reflect good progress in our preeminent aim of “your better health”. In our flagship Australian Residents Health insurance (arhi) we added over 26,000 policyholders at a growth rate of 4.2% and in New Zealand over 5,500 policyholders (excluding international students) at a growth rate of 5.0%. While it wasn’t as positive for our international students and workers and travel businesses, we’re very confident they will bounce back post-pandemic. Pre-pandemic these two businesses combined contributed $41.5 million UOP in FY19. In FY21, they incurred losses of $19.5 million. It speaks of opportunity ahead.

FY21 will come to be known as the foundation year for transforming our business and becoming as much about good health and preventing the risk of disease, as it is about supporting people once they’re already sick or injured. Our “Payer to Partner” (P2P) strategy saw developments on many fronts across the Group, none more evident than the escalating effort and investment in Honeysuckle Health. Honeysuckle Health is a joint venture with global healthcare company, Cigna. It is deploying advanced data science (big data, machine learning, digital engagement) to predict risk at an individual and population level and then develop programs to more precisely prevent, manage or treat the risk. Honeysuckle Health’s potential to change the way we think about healthcare and the place of “prevention over cure” cannot be overstated.

Nobody celebrates the havoc and misery of the pandemic. If there is any silver lining it is the heightened community awareness of disease risk and the need to better manage that risk, as well as its influence in accelerating investment in data-led insight, improved practice and the technology of the kind we’re embracing. Importantly, we have the will and capacity to invest in P2P and relevant technology.

Through our joint venture with Chinese pharmaceutical company, Tasly, we now have a licence to sell health insurance in China and made our first sales in July. It’s a small but crucial step, and while the business won’t be profitable for another year or two, the medium to long term opportunity is considerable.

Another significant development related to the pandemic has been our shift to our distributed working strategy “Life at nib”. Essentially, our 1,200 people now work wherever they choose and are only required to attend a workplace “hub” when necessary, such as induction, training, business planning, project collaboration, and celebration. I deliberately say pandemic “related” because underneath the change is the power of modern technology to automate activity and connect people.

Our members, travellers, shareholders, and other key constituents, such as doctors, should all look forward to further progress in bringing P2P to life and nib supporting a better healthcare system and outcomes for people and communities. As David observes, there is no better opportunity for us to contribute to society. Done well, this will all translate into further commercial success and increased enterprise value.

Mark Fitzgibbon
Managing Director