nib holdings limited (NHF) Earnings Call Transcript

Good morning, ladies and gentlemen. My name is David Gordon, and I'm the Chairman of nib Group. I welcome you to Sydney to our 18th Annual General Meeting. I also welcome those who have joined us online and by phone. Today's meeting is taking place on Gadigal land, where First Nations people have met for thousands of years. Everyone who is born or lives in this country does so today on the land of traditional owners. We acknowledge those people who came before us and their legacy by conducting our current business with respect and understanding. I would therefore like to recognize the traditional owners of land on which we meet today, the Gadigal people of the Eora nation, and pay respect to elders past and present. And now I'd like to welcome Uncle Allen Madden, who will deliver a welcome to country.

Thank you for that applause. Once again, my name is Allen Madden, Gadigal Elder. Board, members, distinguished guests, ladies and gentlemen. For my first song...no. Born and bred in Redfern, the capital of Sydney. [indiscernible]. Married man, 10 children, 26 grandchildren, 17, great great. Yes, we did have TV. I just couldn't afford the [ bloody ] electricity. Aboriginal black [ Redfern ] [indiscernible]. No football fans here neither [indiscernible]. Welcome the country's always an honor and pleasure. Just to give you a bit of an insight of where you are and who we are. Welcome to Gadigal land. Welcome to Gadigal country. As we've all welcomed, firstly, I'd like to acknowledge our First Nations and traditional owners of the lands that you may have come from or work upon, and pay my respects. To all our aboriginal elders, all elders, past and present, also I pay my respects. To all our aboriginal and [indiscernible] the brothers and sisters. From whatever every general island nation you may have come from, welcome to Gadigal. And all our nonindigenous brothers and sisters here today, a very warm and sincere welcome to you to Gadigal. No matter where you've come from, whether it be across the seas, across the state or across town, once again, a very warm and sincere welcome to you to Gadigal. And as I've mentioned many times before, was, is and always will be our aboriginal land. Only [indiscernible] insured and that coming taxation and going. It's an honor and pleasure to be here today to welcome one and all to Gadigal. Gadigal is 1 of 29 clans of the Eora nation. The Eora nation is bounded by nature's own: the Hawkesbury River to the north, Nepean to the west, and Georges River to the south. And then between those 3 [indiscernible] is the Eora nation. And in that nation, [indiscernible] 29 clans. And the clans [indiscernible] today is Gadigal. On behalf of members of the Metropolitan Local Aboriginal Land Council and of the Gadigal Mob, once again, a very warm and sincere welcome you to Gadigal. There's an all aboriginal saying out there. My [indiscernible] is very appropriate for you [indiscernible] today. I say where as I will, there's a relative. And as you travel across these traditional lands and borders, may the spirits of our ancestors guide, look over you, and keep you safe. So once again, on behalf of the Land Council and of the Gadigal Mob, welcome, welcome, welcome. Thank you.

Thank you very much. Thank you, Uncle Allen. It has now gone past 11 a.m. here in Sydney, and the Company Secretary has advised me that a quorum is present, and as such, I formally declare the meeting open. Before we start our official proceedings, I'd like to ask that all mobile phones be turned off or turned to silent so as not to interfere with the proceedings. If you wish to use your phone, please do so outside the room if you're present. I'd now like to introduce the nib representatives who are joining me here today. First, my fellow nonexecutive directors, Jacqueline Chow, Anne Loveridge, and Jill Watts, Peter Harmer, Donal O'Dwyer and Brad Welch. And joining me from nib's senior executive team, our Chief Executive Officer and Managing Director, Ed Close; Group Executive, Legal Chief Risk Officer, General Counsel and Company Secretary, Roslyn Toms; and Group Chief Financial Officer, Nick Freeman. Also joining us today are members of nib's executive team, representatives from nib's external lawyers, [ Ash Hirst ]; our share registry, Computershare; and our auditors, PricewaterhouseCoopers. We also welcome Chair of the nib Foundation, Vanessa Wells. Many of you will know that our Chief Executive Officer and Managing Director, Ed Close, was appointed on December 1 last year. Prior to that appointment, Ed was Chief Executive of nib's Australian Residents Health Insurance. Ed will address you shortly, providing an overview of FY '25 and a summary of nib's key strategic objectives for the year ahead. Following his presentation, I will lead us through the items of business for this meeting. Turning now to my report on nib's performance for the 2025 financial year. During the year, greater certainty returned to our economy. Australia stock market was buoyant. Growth in the economy was positive, albeit modest, and interest rates began to ease. At nib, the '25 financial year made a stronger focus on what we do best, private health insurance in Australia and New Zealand, and a disciplined approach to our business, its value to our customers and returns to our shareholders. Across Australia and New Zealand, nib now covers almost 2 million private health insurance customers. I'm pleased to report that during FY '25, we continued to grow our core business in a very competitive market. In our Australian Residents Health Insurance business, nib achieved policyholder growth of 3.2%, again, exceeding the industry average of 2.2%. Our Net Promoter Score, which tells us how well we are performing for our customers, was at 34. Our new customers include more than 52,000 people who are new to private health insurance, more than 22,000 nib customers were enrolled in health management programs. And in Australia, we supported 390,000 hospital admissions, up 5% on the prior year, and 4,300,000 visits to ancillary health care providers, like dentists and optometrists. And through our planned management business, nib Thrive, we supported more than 43,000 NDIS participants. nib Thrive is now processing 96% of participants' claims within a day of receipt. In our Health Services business, Honeysuckle Health, we ensure access and value for our customers, and achieve this through our product range, competitive pricing and excellent customer service. In FY '25, the public and private health sectors recorded another year of high costs and claims inflation in Australia and especially in New Zealand, where double digit price increases were felt across the health economy. nib incurred $2.7 billion in private health insurance claims in FY '25, continuing and increasing our substantial support for both the public and private health sectors. nib group has a sharp focus on the ways in which we can drive down costs in its -- in our own business and more broadly in the sector. We alone cannot change the economics of health, but we have invested heavily in key measures in FY '25. One such measure is our new partnership agreements with some of Australia's largest private hospital groups. I want to take a moment to talk about those key agreements and the importance of good contracting. Private health insurers contract with hospitals to provide certainty of access for customers to contain prices and to ensure best outcomes for our members. Those agreements are structured as partnership models for better outcomes, and nib now has a multiyear agreements in place with several of Australia's large hospital groups, among others. Together, we agree on appropriate price for an overnight stay in a hospital bed or a specialist service at that hospital. Agreements also cover the cost of medical prosthesis, which can include everything from sutures to pacemakers. We want members covered for their treatment for their stay in a hospital with no or limited out-of-pocket costs. This is one of the benefits of having private health insurance, access to great places for care and value. These agreements are complex, and they are hotly negotiated by private hospitals and private health insurers. The sustainability of the private health care system relies on both sides having robust discussions. We recently announced a new deal with St Vincent's Health Australia. St Vincent is Australia's largest not-for-profit provider of health and aged care services, operating 10 private hospitals across New South Wales, Queensland and Victoria, and rehabilitation and psychiatric services. nib and St Vincent signed a 3-year agreement that better reflects the shift in modern patient care, including the need for shorter hospital stays and sometimes care at home, all at the direction of the treating specialist. The agreement between the 2 parties innovates through dynamic indexation, which means both parties share the risk if health sector prices rise during the terms of the contract. Both parties also have reciprocal rights to improve efficiency, from legal obligations to operational matters, and we have agreed to establish a joint committee to work together on shared value initiatives during the life of the contract. We know the federal government is very focused on the sustainability of the private hospital sector and is pointed to the need for better outcomes. The private health care system can only endure if both private hospitals and private health insurers can operate sustainably. That requires all of us to run our businesses efficiently, transparently and with a focus on productivity and better outcomes. About 55% of the Australian population has private health insurance. Private health insurance pays out for around 2 of every 3 elective surgeries. And data from the Australian Prudential Regulation Authority shows health funds paid a total of $12.4 billion to private hospitals in the last financial year, an increase of 6.4%. In that time, nib paid over $1 billion to hospitals directly and contributed more than $240 million to industry claims through risk equalization. We've been able to do this and ensure appropriate returns to shareholders through prudent management. nib is playing its part in targeting and delivering first-class health services along with delivering efficiencies, which ensure prices remain affordable and customers see value. But private health insurance alone cannot drive solutions or sector-wide reform. We operate in a highly regulated environment as a listed entity, governed by the Australian Stock Exchange listing rules, and we're also governed by the Australian Prudential Regulation Authority and the Australian Securities and Investments Commission. We don't shy away from oversight and regulation, but we welcome greater transparency over the cost of care for all parties. We look forward to greater clarity in claims, bill processing and hospital costs as part of that process. After all, consumer demand for change has never been stronger. Challenges to the health system, to the health system status quo are not new. We know these are challenges that private health insurers and health providers must meet. At nib, we innovate and better serve those in need. Another way that nib delivers value to the sector is by allocating funding to programs designed to help members get well and stay well. nib's health management programs, our health check for members and screening programs, are designed to help reduce the burden on our health system and improve health outcomes for people with a specific disease, injury or condition. This is a significant saving for members who may avoid unplanned hospital visits or readmissions, for the community and for the entire health sector. Turning to the nib group and our purpose, which is the better health and well-being of our customers. Nib reported a $198.6 million net profit tax for the last financial year, an increase of 9.4% over the previous year. The Board declared a final dividend of $0.16 per share, bringing the full year dividend to $0.29 per share fully franked. The full year dividend represents a payout ratio of 7.6%. At a glance, nib is Australia's fourth largest private health insurer. We're the second largest private health insurance provider in New Zealand. Through our international inbound students and workers business, nib supports 46,500 people who come to Australia as part of the Pacific Australia Labor Mobility scheme, known as PALM, and our nib Thrive NDIS business has about a 10% market share in plan management. We also offer travel insurance through 3 brands. Our operational highlights include, in our Australian private health insurance business, which is the engine room for our growth, nib reported its highest ever sales in FY '25. In our international inbound students and workers' health insurance business, we continue to focus on disciplined growth and margin improvement. Changes to immigration policy made the returns in this business more pleasing, and we remain optimistic about the future. Our business in New Zealand continued to navigate a very challenging market, including softer economy and sector-wide health claims inflation. Pleasingly, claims inflation appears to be reducing in New Zealand. Strong management remediation during the year and price increases, along with a renewed focus on operating costs, resulted in a better second half. The private health insurance market in New Zealand is very different to Australia's market. Premium prices rise when a customer's policy reaches its anniversary, and price changes flow gradually through the customer base. And in nib Thrive, we continue to build our business, which serves participants in Australia's National Disability Insurance game. nib is committed to better participant experiences, supporting the government around payment integrity and fraud detection to ensure a more sustainable scheme for all of those who need support. The sector is maturing and reforming, and nib Thrive is well placed for further organic growth. During the year, we announced a strategic review of our travel insurance business, which includes nib Travel, Travel Insurance Direct and World Nomads global brands. That review is currently underway. FY '25 was also a year of prodigious change in technology. Already in nib, artificial intelligence is germane to the whole of group productivity. We are constantly reviewing where AI is applicable to our business model, the gains it can deliver and how we can implement AI to provide deeper customer insights and better customer outcomes. nib is strongly focused on its own costs, and is delivering productivity gains that result in better value and experiences for customers as well as market growth. Productivity measures during the year included an increase in group-wide tech-driven solutions. We refreshed our corporate strategy with a keen focus on driving growth into private health insurance from our adjacent businesses. And we implemented structural changes with our -- with the establishment of our Health Services division, means we are better placed to scale up our services. We combined our international inbound students and workers with our Australian residents health insurance to form a single division. All of nib's achievements over the year come from the sustained effort and consistently high standards that nib people apply to their work. Your management team and Board strongly believe in the importance of high ethical standards, good governance and strong risk management. Our senior leaders are high performers who drive exploration, innovation and strong growth. We recognize that nib's ongoing track record of value creation depends on a strong risk governance framework and risk culture. Our approach involves business level ownership of risk, clear and consistent engagement with key regulators and ongoing investment in our risk management teams and their capabilities. nib's risk framework sits alongside our strategic plan and our sustainability pillars, and it underpins our commitment to deliver for our customers and stakeholders and supports our purpose and commercial strategy. It enables nib to strive for and deliver consistently for our customers, their families and communities. Turning to sustainability and nib in the community. We support the better health and well-being of our customers, employees, their families and our communities. For almost 75 years, from its inception as a BHP workers cooperative, nib group is focused on customers' better health outcomes. It's also a key part of our sustainability agenda. Our focus is on understanding the risks to our customers, mitigating those risks where we can, and managing or helping the -- helping treat them when they occur. We know that many factors determine a customer's good health: access and equity and care, housing, connections to community and the natural environment. We can't solve every issue, but we aim to effect change where we can have the greatest impact. Our 5 sustainability pillars are population health, the natural environment, leadership and governance, community spirit and cohesion, and people, culture and employment. We set and exceeded targets for health management programs, health assessments and in our nib Foundation, the number of people reached through our prevention partnerships. Further, we launched our second Innovate Reconciliation Action Plan, launched an inaugural Disability Inclusion Action Plan, and about 20% of sponsorship funding was invested in diversity and inclusion initiatives. Through the nib foundation established 17 years ago, we have funded more than 200 community health and well-being initiatives worth $34.2 million. In 2025, nib Foundation welcomed 2 partners in Australia's disability sector, Down Syndrome Australia and People with Disability Australia. We continued our funding program to the Hunter Medical Research Institute to help better understand chronic disease prevention and to the birth pathways program. Our Independent Nonexecutive Director, Donal O'Dwyer retires from your Board at the conclusion of this meeting. Donal was appointed in 2016 and has served a full term on the nib Board. He's been a truly outstanding member of the Audit Committee, the People and Remuneration Committee and the Nomination Committee, and has made a very significant contribution to the nib business over almost a decade. Donal's insights, guidance and contribution have been highly valued, along with the warmth, good humor and generosity of spirit that he has brought to all of his dealings on the nib Board. On behalf of the Board and all shareholders, I thank Donal, and we -- for his commitment, and we wish him all the best for the future. I'd also like to welcome our New Zealand -- welcome to our New Zealand Board, Andrew Blair, who joined as a nonexecutive director this year and was appointed Chair on the retirement of [ Hannah James ] on the 1st of November. [ Hannah ] has served on the Board since 2016 and was appointed Chair at the start of 2024. We thank [ Hannah ] for her dedication to nib and wish her well, and we also welcome Andrew, and look forward to working with him. Together with the nib Board, I look forward to the challenges the year ahead will bring. Thanks to my fellow Board members, nib's executive management team and the wider nib group for their hard work and dedication throughout the year. And now I'd like to hand over to Managing Director and Chief Executive Officer, Ed Close.

Thank you, David, and good morning, everybody, and thanks for joining us. It looks like we've got a great turnout here in Sydney. And for those of you that can take the time, we encourage you to stay for some refreshments at the conclusion of the meeting. I'm Ed Close, nib's group Managing Director and Chief Executive Officer. And throughout the year, nib has continued to support our customers, our shareholders and our communities. Our purpose, as David mentioned, is your better health and well-being. We protect customers by ensuring health care is accessible and affordable. We connect them to trusted providers and partners, and we provide insights and tools to empower individuals, their families and the communities to manage their health. David has already provided a bit of an overview on our business and the broader industry landscape over the past year. But before I talk to our financial results, I'd like to share some numbers that demonstrate nib's commitment to the better health and well being of our customers. At nib, we are providing value and access so that customers can look after the health and well-being, whether that's through access to private hospitals and ancillary care, health care at home programs or virtual care. We're doing more to help our almost 2 million customers in private health in Australia and New Zealand. In FY '25, we funded almost 400,000 hospital admissions and incurred $2.7 billion in private health insurance claims. nib supported 4.3 million customer visits to dentists, optometrists and other ancillary health service providers across Australia, up by 5% on the previous year. nib's preventative dental and optical networks expanded to more than 500 providers, saving customers over $40 million in out-of-pocket costs in FY '25. Our network grew to more than 40,000 medical specialists, who offer nib customers a known gap in cost for medical treatment to reduce medical out-of-pocket costs and provide greater certainty for customers. One in 4 major joint procedures for nib customers is now delivered through our no out-of-pocket clinical partners program, which can also reduce the length of hospital stay and improve accessibility for our customers. Our finder provider tool has helped up to 50,000 customers a month find a specialist for treatment. And now more than 70% of our nib customers use our mobile app and digital tools. As David highlighted, we're also investing in digital and AI to make experiences easier and more personal. We now have a number of AI initiatives in production, including nib GPT and AI summarization that has cut after core work by 60%, enabling our staff to focus more of their time on supporting our customers. And we're constantly improving service experience while protecting our customers' data and privacy. We continue to expand our health services offering. In the last 12 months, nib enrolled more than 22,000 people in health management programs to help them manage a chronic disease. Health information we know is deeply personal. We continue to strengthen safeguards across our platforms and partner networks, so members can manage their health with trust and confidence, from secure digital claims to verified provider connections and non-gap arrangements. These initiatives demonstrate nib's ability to deliver value and convenience for customers, supporting our strong above-[indiscernible] growth across our Australian Residents business. Now I'd like to turn to our group financials. Positive momentum continues across FY '25. Group revenue rose 7.8% to $3.6 billion, supported by continued expansion of our private health insurance portfolio. As we mentioned, now covers nearly 2 million people across Australia and New Zealand. This scale means we fund significant parts of the health system, and play a critical role in connecting our customers with trusted partners to help them get well or stay well. With the $2.7 billion in incurred claims, we are very motivated to deliver value and better health outcomes for our customers. In FY '25, we delivered a solid group operating result, with an underlying operating profit of $239.2 million and net profit after tax of $198.6 million. We're proud of our digital-first customer-led approach, which helped us achieve a group Net Promoter Score of plus 34. And as I mentioned, we now enjoy more than 70% of our Australian PHI policies being digitally connected, making interactions for those customers simpler, faster and easier. And we're also seeing the benefits of our productivity focus. Our group operating expense ratio improved by 50 basis points to 17.7%. We maintained a fully franked dividend of $0.29 per share, consistent with FY '24. I'd now like to take a time to look a little bit deeper at the nib segment performance. In FY '25, our Australian Residents Health Insurance business had another standout year. nib has reported above sector growth for more than 20 years. And in FY '25, nib outpaced the market again, with 3.2% net policyholder growth compared with the average industry growth at 2.2%. Net margins remained stable and were guided towards our 6% to 7% target range, supported by disciplined pricing product design and tight expense control. FY '25, as David mentioned, was our best ever sales year, up 13%, thanks to our strong multichannel distribution strategy, including 52,000 people who are new to PHI, highlighting how nib is continuing to support increased participation in the private health insurance sector. As more people buy private health insurance because they see value in the cover that nib provides, the burden on the public health sector eases. And in FY '25, our prevention and in-home care initiatives saved over 24,000 hospital bed days and saw meaningful improvements in health outcomes for customers. We've also strengthened our support for the broader health care system. As David highlighted, we've secured major multiyear partnerships with the large hospital groups across the country. We see high potential for continued growth in our priority health insurance markets. And our product, pricing and improving customer value proposition position us strongly across all our brands and channels. Turning now to our adjacent businesses, which contributed $45.3 million to group underlying operating profit. International students and workers who come to Australia must hold private health insurance as part of their visa requirement. Our international visitors business recorded 14.4% revenue growth and 23% growth in underlying operating profit, with more than 46,500 of our customers part of the Pacific Australian Labor Mobility scheme, or PALM. Our direct relationships with employers are stronger than ever, and we're seeing new opportunities emerge in these markets as international student commission payments undergo further reform. Across the [indiscernible] in New Zealand, our recovery plan is well underway. Price increases are now aligned with inflation, product changes have been announced and are taking effect, and we returned to profitability in the second half of the year. We also welcomed our new Chief Executive for the nib New Zealand business, Skye Daniels. Skye joined nib in August. She has deep industry experience as Chief Financial Officer, and has worked in aviation, media and the wider health care sectors. I also wanted to take this opportunity to thank former nib New Zealand Chief Executive Officer, [ Rob Hannon ], for his fantastic contribution over the last 12 years. We wish [ Rob ] all the best for the future. Our health services strategy is progressing positively. Honeysuckle and Midnight Health are now fully and wholly consolidated within nib's Health Services division. We are aiming for profitability in FY '26 as the businesses gain scale and market traction. nib's Health Service division is central to nib's growth strategy. Honeysuckle helps nib's private health insurance customers better manage health conditions and risks through its health management programs. These programs reflect nib's drive to deliver better value for customers and importantly, better health and well-being, especially for those customers that are managing a chronic disease. Honeysuckle Health also run support programs to help people return to work after an injury and is actively working with several insurers and corporate groups across Australia to improve broader health and well-being outcomes. During FY '25, nib completed more than 121,000 general health interactions via our health and well-being programs and telehealth consultations. As part of nib's broader digital consumer health offering, Honeysuckle's Hub health brand focuses on delivering convenience, access and discretion through virtual health care delivery. As part of this experience, both nib and non-nib customers can consult with the clinician at a time and in place that suits them. Many of these customers are young parents and professionals juggling work and family obligations. They live right across Australia, including in regional and remote locations where access to GP can be difficult. And we know that health care in the home is transforming patient care. With guidance from a treating specialist, customers can now receive high-quality and affordable treatment outside a hospital setting. For some time now, advancements in health care delivery have resulted in improved patient recovery times, leading to shorter hospital stays. A patient might once have spent a week in hospital following a knee or hip replacement, where now, prehab and often rehab can be done in the comfort of their own home, can often mean a much shorter hospital stay while delivering quality patient outcomes and experiences. This positive shift benefits patients, families and communities and unlock significant efficiencies across the broader health system. It is a major change. And while it brings advantages, it can also create challenges, such as pressure on hospital budgets, operating models and as this transition accelerates. But importantly, this is not a move away from quality care. It is a move towards achieving the best possible outcomes for patients, and ensures that we focus on the right care, in the right setting, at the right time, the right price for our customers. Across in the disability sector, we continue to strengthen nib Thrive, which serves participants across Australia's NDIS. In FY '25, nib Thrive delivered a $16.9 million underlying operating profit, up 10.5% on prior year. As David highlighted, Thrive supports around 43,000 NDIS participants, mostly providing plan management services and essential role in ensuring that providers are paid promptly, and participants receive a high-quality participant experience. We have focused significant amounts of energy on our service level improvements, and this now means that around 96% of claims are often processed within a single day, and 85% of our calls are answered within 90 seconds for our participants and providers. As a relatively new entrant to the disability sector, we are committed to listening to participants, carriers and providers to drive continuous improvement. This engagement is critical as the NDIS undergoes significant reform, including changes to eligibility, fee structures and intermediaries as the government focuses on securing the long-term sustainability of the scheme. Thrive continues to actively contribute to these reforms, ensuring we are ready to adapt as changes are implemented. And our goal is clear: to help shape a sustainable NDIS, while delivering exceptional service for participants and providers, and we look forward to working closely with the disability community and the government in the year ahead. Earlier in the year, we announced nib Travel would undergo a strategic review. The review is well advanced, and we will provide a further update to the market in due course. Our Travel brands include Travel Insurance Direct, nib Travel and World Nomads. During FY '25, gross written premium for our Travel segment continued to improve. The business focused on cost discipline, delivering a 6.7% decrease in operating expenses year-on-year. New products were launched in the United States and the United Kingdom, supporting our growth momentum in Global Markets. All 3 Australian and New Zealand brands won a 2025 WeMoney Award, with nib and World Nomads taking our back-to-back wins. Finally, during the year, nib kicked off a multiyear productivity program, which has delivered pleasing results to date. We unlocked $80 million in benefits, reduced our group operating expense ratio and kept nonmarketing expense growth to just 3.4% in an inflationary environment. We're also using AI to process nearly 1 and 2 Thrive invoices straight through, and we continue to expand our capability into our Australian health insurance business and New Zealand operations. I'd now like to spend some time on our strategic direction. As we look to the future, nib Group's refreshed strategy is focused on 4 core priorities, each designed to drive sustainable growth, operational excellence and long-term value for our customers, our partners and our shareholders. Our top priority is to accelerate growth in our core PHI business in Australia and New Zealand. We continue to target above system growth and sustainable earnings through a multi-brand, multichannel approach, disciplined pricing and ongoing innovation to enhance the customer experience and value proposition in our key markets. Our partnership with Honeysuckle Health is scaling up, and it helps us deliver better health outcomes for our customers, improve access to affordable care and optimize our claims performance in our PHI business. We're expanding our health services and partnerships with insurers and corporate groups. Our partnership with ItsMyGroup is helping us extend our distribution and deliver greater value to both PHI and non-PHI brands across Australia. And we are strengthening our leadership in NDIS plan management. We will pursue a multi-brand strategy, and we will continue to work hard to improve experiences for participants and providers. And finally, as I mentioned, we're unlocking group productivity through digital data and AI. We're embedding AI and digital-first capabilities and simplifying our business model to drive efficiency, but most importantly, to improve the customer and employee experience. Our disciplined approach to capital allocation ensures we're investing for long-term value and sustainable returns. And looking ahead towards the outlook, we continue to see a positive uplift in [ group ] underlying operating profit, supported by continued strength in our Australian PHI business, and expected return to full year profitability in New Zealand and solid momentum across our adjacent businesses. FY '25 was a year of disciplined and strong momentum across our core and adjacent businesses. We're focused on sustainable growth, operational excellence and delivering seamless experiences for our customers. nib Group remains well positioned to deliver consistently strong outcomes for all of our stakeholders in FY '26 and beyond. Before I hand back to David, I did want to take the opportunity to thank the nib team for its positive contribution over the past 12 months. It's greatly appreciated. Thank you all. And I'd also like to take this opportunity to thank our customers, and of course, our shareholders for their ongoing support. It's very much valued and appreciated, and we very much look forward to the year ahead. And with that, I'll hand back to David. Thank you.

Okay. We'll now proceed with the formal business of the meeting. I propose to take the notice convening the meeting as read. And please note that matters not pertaining to the meeting won't be covered today. Shareholders will be given the opportunity to ask questions in relation to any aspect of nib's operations. And personally, I think that's the most interesting part of the meeting. Responses to questions or general matters of business will take place under the first item of business. For subsequent agenda items, I'll only allow questions and comments specific to those items. Let me first address questions from the floor, and I'll ask shareholders to stand up at the microphone in the aisle. If you're unable to do that, you can raise your hand and a microphone will be brought to you. For shareholders joining us online to ask a question from the online platform, please follow the instructions shown on your screen. You must be logged in as a shareholder to do this. The question function on the online platform is now open. For shareholders on the telephone line, [Operator Instructions]. If we receive similar questions regarding the same topic, we'll respond to those questions collectively. Any shareholder who has submitted a written question prior to today will receive a written response from nib. We recognize that a significant number of our shareholders are also nib members. If you have a question relating to your nib health insurance cover, please visit our member consultants in the pre-function area. Alternatively, you can contact nib via phone on [ 13 16 42 ] or by visiting our website at nib.com.au or by using the nib app on your phone. I now put before the meeting nib's 2025 financial report, directors' report and independent auditor's report. There's no vote on this item, and as such, voting is not yet open. But this is the only item on today's agenda where you have a formal opportunity to ask questions or make comments generally about the performance of nib and its management. Our auditor, [ Caroline Mara ], partner of PricewaterhouseCoopers, is here today and available to respond to questions in relation to the conduct of the audit, the content and preparation of the audit report, the accounting policies adopted by the company in relation to the preparation of the financial statements and the independence of the auditor in relation to the conduct of the audit. Any questions in relation to these reports or any aspect of nib's operations or its management generally will be addressed now. If you have a question about a subsequent item of business, please wait until I address that item of business on the agenda. So if there's a shareholder in the room who'd like to ask a question, please move to the microphone and -- with your attendance card and raise your hand. Wonderful.

Chairman may introduce William Printess.

Welcome, William, thank you very much for coming.

Thank you for inviting me. It's very nice for you, and I enjoyed your address. But was it AI written your address?

It was not. No. Hard slog. No AI. Although we do use AI and lots of things to improve them, but that was not one of them.

Okay, just inquiring. I just wanted to -- I think it was sort of raised by you or maybe by Ed about health care inflation, which is greatly above the CPI. So can I just ask, what are your assumptions going forward in the next year or 2 in relation to the inflation that's going to be in health care as it pays to the CPI? Because I should imagine that will have -- both have sort of an impact on increases in premiums. Anyway, that's my first question. So I was [indiscernible] that. Can I ask another one?

Yes, go ahead.

Okay. I didn't want to hog it.

No, I'm sure [indiscernible].

The company sort of operates in a very regulated environment, which you said. And also one department you didn't mention was the Department of Health. And the government, being as they are politically -- you're in a politically sensitive area, that if your profits go up, everyone jumps up and down. Well, not everyone, but the politicians do.

Well, they jump up and down for different reasons, yes.

And I'm just wondering, because they set your premium increases as well. So just wondering if you could comment on that regulatory environment that basically, in a way, limits your profitability -- ability to do things.

Okay. Well, that's 2 excellent questions.

And can I ask you a third one?

If I can remember it, then go ahead, yes.

The third one is a very simple one, maybe. But when I put the TV on -- and there's another health fund, which I won't name, but you'll know anyway. And they say we're not for profit, come to us. The other ones, and I presume they're referring to nib, have greedy shareholders there that need money and so forth. I'm just wondering how you counteract that type of argument? And anyway, that's it. That's enough.

Thank you. That's 3 excellent questions. Let me see if -- I might just do the last one first, then we'll come back to the other 2. So the concept of not-for-profit is -- it's an interesting one because every business requires capital in order to function. And that capital can either be capital retained on its balance sheet, that has ultimately come from either contribution from people in the past or from ongoing profits, or it can come from new capital issued and taken up by shareholders such as yourselves. And one of the great benefits that we have as a listed business is that we have the ability, where we need it, to add to our capital reserves by raising capital in the markets. And in a market and in an industry which is changing so much, that's huge flexibility. As far as not-for-profits versus those that make profit, I think it's a little misleading because every business should make a profit. It's a question of what you then do with it. Some of that profit gets reinvested into expansion or into existing businesses. Some of that profit needs to go to compensate the source of the capital. Now in the case of nib, the source of that capital is you, our shareholders, and that's why we pay dividends. And the discipline of paying dividends is, in my opinion, a very good one. It means that we focus even more on the efficiency and productivity of our business to make sure that we can generate a profit to pay shareholders for the use of their capital. Now in nib's case, you made the point that our pricing is set by the government, and it's true. Every year, every health fund in Australia seeks to -- seeks the approval of the government for a price increase and -- including ourselves. And the guidance that we give about our profitability and the guidance that we give to the government in terms of our price increases is very simple. We continue and have for a long time, look to achieve an underlying profit ratio of between 6% to 7%. And that is a target which we are very keen to continue to follow. Now with health inflation that you mentioned in your first question, that becomes more challenging. And there are 2 components to health inflation. There's the actual cost of a particular procedure or a prosthetic, and those costs are going up. The wage costs of -- in hospitals are going up as is the cost of products, whether it be sutures or pacemakers in the example that I gave in my address. And both components of that go to increase the costs of the health system, the costs that we pay out to hospitals for the procedures that our members get done. And so when you look at health inflation, the cost that we need to cover is a cost to ensure that we can continue to meet the obligations that our members incur when they have health procedures in hospitals as those costs go up, and the number of claims that they make if the number of people who need procedures increases. And both components of health inflation have increased in recent times. COVID was a bit of a complicating factor in all of that because during COVID, many people who needed procedures put them off or couldn't have them done because there were other things being done within our health care system. And one of the challenges is trying to work out what sort of additional demand there may be on our hospital system post-COVID as some of those procedures flow through the system. At the same time, as prices have increased, it's a bit of a double whammy. And that's what's going on at the moment. How do we factor that into our planning? It's a very good question, and it requires us to be highly focused on trends that are taking place, not just in aggregate, but in every type of procedure across public and private hospitals. And to ensure that we are tracking the claims by our members in those areas and what's going on with health care costs, the cost of going to a doctor, the cost of needing a particular piece of equipment in an operation. And that's why I said earlier in my address that the challenges that are being faced by the health care system are not challenges that we alone can solve. They need to be done in the private sector in partnership between private health insurers and private hospitals. It's one of the reasons why we are very keen for there to be greater transparency in how hospital costs are being incurred. We are completely transparent in the way in which we operate. We're a listed business. We publish our accounts every year. Our accounts are audited by a highly reputable organization. And every dollar that we spend is allocated and checked, and we publicize how we spend everything we do. We ask for the same level of transparency from the private hospital sector because we want to ensure there is productivity gains across the system in order to be able to cater for the growth that's taking place, in the number of procedures that people are asking for, in the increased cost of those procedures. So that we can moderate the increases that we pass on to our members and at the same time, adequately compensate the capital that's involved in our business, and ensure the ongoing sustainability and viability of the private health insurance sector. And that's a challenge, which I referred to in my address in terms of the hotly contested agreements that we enter into with private hospitals because part of those agreements are to address exactly the thing that you raised. We formed these -- we enter into these contracts for periods of time, 2, 3 years. And hospital costs go up, the number of claims go up, we need to factor all of those things in. So we've taken a shared partnership approach with private hospitals to how those things are managed. So we all have the same outcome in mind, that we want our private health care system and our public health care system to be as efficient as possible, to be as productive as possible so that we can pass on the smallest possible increases to our members, but ensure that their health care is well catered for in terms of access to health care and in terms of equality for health care and the cost of health care. And that's a challenge which the management team is faced with day in, day out, and has been for years and done a great job. So I hope that, that answers the 3 questions that you asked of me. Please go ahead. Go from there. I can hear you. We've got a microphone actually, we might pass it to you and.

You don't have to answer this question, but...

You ask it, I'll answer it.

Sorry. Well, that's okay. Thanks for that explanation. I thought it was excellent. The -- going forward with health care inflation, I presume you have a set of assumptions on what you expect that inflation to be. And secondly, with premium increases, I guess there's politics involved in there. And can you sort of give an idea of what you think may be politically okay for the increases coming up? That's why I said you don't have to answer this question.

I'm not sure that the question is capable of being answered accurately because I can't predict the future. What I can say is that the entire health care system works with the government to ensure the sustainability of the system. It's one of the fundamental elements of our society, that we can look after our sick and those in need. And we are an important part of that process. No one part, ourselves included, can control the outcomes, but we can all work together to try and get the best outcome possible. Inflation is a fact. The CPI inflation, I mean, general inflation. The inflation taking place within the health care system is a fact. And the fact of the matter is that both across the public sector and the private sector, we need to be able to provide high-quality and enduring health care. We take that role very seriously. And so yes, we have -- we do estimate what sort of increases in inflation rate and in participation rate, the number of claims that people are going to make, and we monitor that in order to ensure that we're covering things. And we wish to make the smallest increases possible in private health insurance costs so that we can make our insurance and indeed the sector's insurance, as affordable for the population as possible. And it's an ongoing challenge, but it's a challenge which we enter into arm-in-arm with private hospital operators and with the government. And is there anything you'd like to add to that?

Thanks, David. Thanks William for the question. Well, let's come on. A couple of quick additional points on inflation. So you'll recall in the investor results presentation, we talked about our 12 months rolling inflation, which sits around 4.9%. And so I think you can get a good guide around our projections moving forward. Long-term inflation is, for health care generally, trends at around CPI plus 2%, with a combination of aging and technology investment driving that above CPI piece. And so I think if you look at history as a guide, is always a general way to take a look at that. And then as it relates to the premium round, again, if you look at history, then ensuring that there's that sustainable sector profile around the ability to price in that inflation, history would generally support that ability to price in inflation.

Great. Thanks for the questions. Does anyone else on the floor have a question? We love questions. Please.

I would like to. My name is [ Peter Castein ].

Sorry, your name is?

[ Peter Castein ].

Peter, welcome.