Medibank Private Limited (MPL) Earnings Call Transcript & Summary

Good morning and welcome to Medibank's Annual General Meeting for 2020. I'm Mike Wilkins, and I'm honored to be with you today as your new Chairman. Ideally, we'd be meeting in-person, but today, we're gathering together virtually to protect your health and well-being. On behalf of the Board, I'd like to acknowledge the traditional owners of the lands that we're meeting on today. I'm joining you from Gadigal land. And thanks to technology, we have people joining us from many different locations today. So I'd like to acknowledge the traditional owners of these many lands and pay my respects to all elders, past, present and emerging. We recognize the health gap between indigenous and other Australians, and we acknowledge the ongoing commitment of those working within their communities to close this gap. As we have a quorum, I now formally declare the meeting open. I'd like to begin by running through some procedural details. As you're aware, we're holding this year's AGM virtually in light of the COVID-19 pandemic. We've worked hard to ensure that our AGM broadcast runs smoothly. But if you experience any technical difficulties during the meeting, please call the number on the screen. As well, a recording will be available on our website after the meeting. As set out in our notice of meeting, shareholders will be able to vote in real time during the meeting using the Lumi Online platform. To provide shareholders the greatest possible opportunity to vote, I now formally open the polls on all resolutions. I also now formally cast all votes for proxies I hold on all resolutions in accordance with the directions provided by shareholders or are set out in the notice of meeting. For those of you who are entitled to vote and are joining us using the Lumi platform, the voting icon will appear on your navigation bar shortly. Once you click on this icon, you'll see the resolutions on your screen. To cast your vote select one of the options: for, against or abstain for each resolution. Your selection will be highlighted and the vote is automatically recorded, but you have the ability to change your vote at any time until I declare voting closed. I should give you a warning when I'm going to close voting. Shareholders entitled to ask questions may now do so either through the Lumi platform or the teleconference facility provided. Those of you attending the meeting via the Lumi platform may submit questions by clicking on the speech icon on your screen. I'd encourage you to submit your questions early. [Operator Instructions] We'll repeat these instructions when we come to the formal business of the meeting. Questions will be answered during the formal business of the meeting regardless of when they were submitted. As stated in the notice of meeting, we'll endeavor to address as many of the more frequently raised questions as possible, but we may not be possible to answer all questions. We may moderate or amalgamate questions submitted online if there are multiple similar questions. If there are any technical issues with the teleconference or the teleconference files, shareholders participating on the teleconference should join via the Lumi platform. Details on how to access Lumi can be found in the virtual meeting guide on our website. If the AGM needs to be adjourned at any time due to technical or other reasons, we'll provide further instructions and information on our website and the ASX. With me today via video link from Melbourne is our CEO, Craig Drummond. Joining us by phone is the Medibank Board of Directors, nonexecutive directors, Tracey Batten; Anna Bligh; David Fagan; Peter Hodgett; Linda Nicholls; and Christine O'Reilly; and our Company Secretary, Mei Ramsay. We also have the executive leadership team on the phone. Tracey, Anna and I are all standing for reelection today. I'll now give a summary of our performance and then hand over to Craig for his comments, including an update on our FY '21 outlook. 2020 has been an extraordinary year of change, and I'd like to thank you for your ongoing support and the trust that you've shown in the Board and the executive leadership team this year. Just 9 months ago, at the time of our half year results announcement in February, 15 people in Australia had been diagnosed with COVID, and we brought together a team from across the business to monitor and respond to what's become one of the most significant health and economic events in our lifetime. Within 3 weeks, the Prime Minister had activated an emergency response plan and unveiled a $17.6 billion stimulus package to combat what was later deemed a global pandemic. We focused on protecting the health and well-being of our customers and our people. We acted quickly, transitioning into a virtual business model with Medibank employees moving to work from home and announcing the first of our support measures to help our customers through the crisis. To support our people, we introduced paid COVID leave and launched a 24/7 employee mental health support line. In all, our financial support to date has totaled more than $185 million to help our customers, our people and our community through the health and financial impacts of COVID. Medibank has played a key role in the public health response too. Working to support a range of COVID helplines, our telehealth teams have taken more than 320,000 calls to date, and we employed around 680 temporary nurses to help manage the early demand. The Victorian government asked for our support during stage 4 lockdown and our teams have been helping with in-home COVID testing, assisting with contact tracing and providing services to hundreds of residents in aged care homes. We also provided funding for research projects addressing the impact of the pandemic, including an analysis of the effectiveness of screening tools such as questionnaires and temperature checks to identify COVID-positive patients before surgery. As well, Medibank supported research by the Royal Australasian College of Surgeons that developed recommendations for a staged return of elective surgery in a safe and monitored manner. These recommendations were subsequently adopted by the Australian government, and we continue to support our customers through the ongoing challenges. Throughout this crisis, the Board's focus has been to ensure the health and well-being of our customers, our people and the community while overseeing Medibank's response to the impact that COVID has had on our business. And while today is an opportunity to talk with you about that response, it's also a time to reflect upon our results from the 2020 full financial year. Medibank has proven resilient, able to draw upon its increased health care capabilities to better respond to the needs of our customers and adapt to the rapidly changing environment. As a result, we saw our customer and employee advocacy increase, and we delivered a net profit after tax of $315 million for the financial year of 2020. This result reflects the decline in health insurance operating profit and a significant fall in investment income due to the heightened market volatility related to COVID. Our full year ordinary dividend of $0.12 per share fully franked represents a 90% payout ratio of our underlying net profit after tax. This is above our 75% to 85% payout range and reflects our strong capital position, our confidence in the sustainability of future earnings and recognizes the importance of dividends to our shareholders. The 2020 financial year has been challenging due to the need to strengthen the claims provision as a result of expected claims deferrals due to COVID and a lower cash rate. Throughout, we maintained a prudent approach to our capital management. We're conscious of the importance of dividends to our shareholders, and we continue to regularly review our capital buffers and targets and undertake ongoing stress testing to forecast and plan capital levels in line with APRA guidance. The Board hasn't changed the target payout ratio for FY '21, which will remain at 75% to 85%. And in a market in which industry growth has declined, we grew market share modestly over the year to 26.9%. Medibank is well positioned to respond to the current environment, and we'll continue to target increased market share and customer growth. We're very proud of the exceptional performance of all of our people during these unprecedented times and the focus on customers and our communities that they have displayed. In this regard, I particularly want to acknowledge the outstanding role that Craig and the executive leadership team have played in responding to the pandemic and the care that they've shown for our customers, our people, our shareholders and the wider community. No employee has been stood down as a result of COVID, and Medibank has not received any COVID-related government subsidies. But COVID has impacted our financial outcome and required some difficult remuneration decisions, with the Board choosing not to award short-term incentives to the executive leadership team despite the impact of the many external factors being outside of management's control. In coming to this decision, the Board acknowledged the performance of the executive leadership team in steering Medibank through the unprecedented challenges of 2020 to deliver a sound financial and operational performance as highlighted by the final ordinary dividend we delivered to shareholders. The Board also considered the current economic conditions and social, environmental and other conditions created by COVID and the expectations of our customers our shareholders and the community to whom we're ultimately accountable. Our people take real pride in our purpose of better health for better lives and believe we have an important role to play in supporting Australians to live their best quality of life. This is at the heart of our approach to sustainability. It's by working to improve the health and well-being of our customers and our community that we can build a stronger, more sustainable business, one that can deliver longer-term value. This year, the Board endorsed a new sustainability strategy that further strengthens our environmental, social and governance initiatives, focusing on the issues that our customers, shareholder and community representatives and employees identified as most important to our business. It should be no surprise that affordable health care is top of the list. Our work to deliver quality healthcare that's more affordable and offers more choice underpins our transition to becoming a broader health care company. Craig will speak to the inroads that we've made this year, but we continue to focus on preventative health and care outside of the traditional hospital setting and to work with government to deliver ongoing industry reform. Mental health support remains a priority for us, and we've broadened our range of services to cater for a wider spectrum of mental health concerns. At the beginning of the pandemic, we donated $5 million to Beyond Blue to establish a dedicated coronavirus mental health and well-being support service. Many Australians' metal health has suffered as a result of COVID, especially Victorians whose use of Beyond Blue support was 77% higher than the rest of the country between September and October. We're now looking to help address the growing issue of loneliness estimated to affect as many as 5.6 million Australians. After surveying more than 2,000 people to better understand the impact chronic loneliness can have on mental health, we're working with experts to develop a long-term support program. Our funding for Beyond Blue was part of the $9.5 million we contributed to the community this year through health and medical research, community partnerships, employee volunteering and workplace giving. Our community approach is focused on building strong partnerships to help us deliver better health for better lives. This year, we also celebrated our ninth year working with the Wadeye indigenous community by joining with community elders and Red Dust to co-design a cultural health camp attended by 100 young aboriginal women. We're also applying our purpose and values to the companies we work with. We'll soon publish our first modern slavery statement detailing the steps we've taken to help prevent modern slavery and human trafficking within our supply chain and operations. We've also embedded principles into our procurement policies to build a supply chain that helps deliver better health outcomes, support social enterprises and indigenous businesses and is more environmentally sustainable. Environmental health is a key pillar of our sustainability approach, and we continue to work to reduce our impact this year, launching our new environmental policy, which elevates the environment in our decision-making. We've integrated climate change risk into our organizational risk management approach, and we remain committed to carbon neutrality and playing our part in the transition to a low-carbon economy through our responsible investment approach and our choice of suppliers. Earlier this year, we commissioned an independent review of our practices and climate disclosures to support our first report against the task force on climate-related financial disclosures and we're now working through the recommendations. We also continue to encourage our employees to reduce their environmental impact at work and at home. These are just some of the many initiatives that we're pursuing to build stronger environmental, social and governance accountability and contribute to a more sustainable future for all. Our progress is detailed in our first sustainability report, which is available on our website. When the Board and I look at the work our people are doing every day to support Australians dealing with the many challenges COVID has presented and the pride they feel in the contribution that we're making, we're proud to be part of Medibank and we're confident of our future. Medibank's strong, purpose-led culture and commitment to stakeholders is what's enabled our business to better connect with the needs of our customers and the changing societal demands. Here, I'd like to pay tribute to former Chairman and Board member, Elizabeth Alexander, who was a driving force in building that sense of purpose and guiding Medibank's transformation over the past 12 years. I'd also like to thank Craig and the Medibank team for their hard work this year. Our lives have been changed by COVID and the impact of the virus will continue to be felt for the foreseeable future, especially in regard to our health system. This presents Medibank with both opportunity and challenge which our business is well positioned to meet. And finally, I want to thank you, our shareholders, for your continuing support of Medibank and the purpose that we're pursuing as an organization. We still have much to do, but I'm heartened by our progress to date and the opportunities that remain before us. I'll now ask Craig to give his presentation and to discuss our progress and the outlook for 2021.

Thank you, Mike, and good morning, everyone. I'm joining you today from Wurundjeri country, and respectfully acknowledge the traditional owners and any aboriginal and Torres Strait Islander people joining us today. In a year that started with one of the worst bushfire seasons in history and then seemingly flowed straight into the global COVID pandemic, 2020 has been challenging for every Australian. For Medibank, the focus has been on managing the issues within our control, but also taking this opportunity to demonstrate how we work to our Better Health for Better Lives purpose. Our strong purpose and values were behind the important decision to postpone customers' premium increases for 6 months. It's why we added temporary heart, lung and kidney coverage to the policies of more than 1 million hospital customers. It's why we reached out to thousands of our most vulnerable members to offer additional support through our COVID-19 Health Assist program. And it's why we've recently uplifted our mental health support by giving around 2.1 million customers access to counseling in their extras cover. It's also what has driven our hardship package for customers doing it tough during these extraordinary times. Support ranges from the option for members in financial stress to suspend their cover, access a 50% premium waiver for up to 6 months or a 10% discount for 3 months for those living in an area declared a state of disaster due to COVID and not eligible for government support. While a small number of insurers postponed premium increases for some or all of their customers for a further 6 months, we opted to be more targeted in our approach. This enables us to give the most meaningful relief to customers who need it the most. For example, our 50% premium waiver for customers on government support payments like JobKeeper or JobSeeker saves an average of $800 per policy. This has a much greater impact than extending the premium freeze for all customers, saving an average of $70 per policy regardless of their individual circumstances. In all, our financial support for customers has exceeded $185 million since March. And I would also like to reiterate the Chairman's comments that Medibank itself did not access any taxpayer-funded government relief through this time. We also made the decision to temporarily close our retail store network during the national shutdown and diverted these teams to online customer support channels. I am, however, pleased to say that all of our stores across Australia are now open, including those in Victoria. These decisions were made with the health and well-being of our people and our customers in mind, but also to support the work of Australia's frontline health care workers. I want to take this opportunity to acknowledge the monumental effort of frontline health care workers and all who have and continue to support the national health response. I also want to thank our team here at Medibank who have stepped up to meet the unique challenges of the past year and who have worked incredibly hard to support and provide some certainty to our customers. Our people have not been immune to the consequences of the pandemic either, and yet they have contributed -- they continued to support our customers and each other magnificently. Of all the years we've measured employee engagement and customer advocacy, 2020 is the one we have seen our highest ever results. These outcomes have been driven by how our senior leaders have supported and galvanized their teams and how our people have embraced new ways of working with both flowing through to an empathetic and enhanced experience for our customers. Our strategy to differentiate and grow our private health insurance business through our dual brands and to transform into a broader health care company has guided us well. This past year, we focused on enhancing customer value and recognizing and rewarding customer loyalty. We've also made personalized health and well-being an increasing part of each member's experience with us, delivering around 2 million personalized and proactive health promotions in FY '20. This is an area that sets Medibank apart and will become truly differentiating as the broader community more highly values their own health and well-being as a result of the pandemic. Looking forward, prevention and support are our priority as we look to double the uptake of our Live Better and Health Assist programs by June 2022, while ensuring that every customer has at least one personalized health interaction with us each year. In FY '20, our dual brand strategy continues to provide flexibility and broad coverage across the market, helping us to achieve net resident policyholder growth of 10,600 and an increase -- and to increase our market share modestly. Our digital channels contributed significantly to this result, with both acquisition and retention benefiting substantially from the focus on uplifting our digital capability in recent years. We also looked at how to give customers a better experience and more choice while facilitating change in the health system to make health care more affordable to reduce customer out-of-pocket costs and to create value. One significant shift has been an increase in the use of telehealth services across the country. We saw this demand firsthand, early on in the pandemic, when our telehealth nurses joined the public health response. This growth in telehealth was inevitable with COVID simply speeding up the process through sheer necessity. The federal health minister has reflected on this too, saying how the pandemic brought forward a 10-year plan on telehealth within 10 days. This year, many Australians use telehealth for the first time, and it has demonstrated the benefits of providing care and support in a very flexible and affordable way. I am hopeful that telehealth's expanded role is here to stay, given the choice and convenience it offers and its ability to remove geographic barriers for those in regional and remote areas. To support this change, earlier this year, we gave customers greater access to telehealth by paying benefits for a range of consultations delivered by phone and video. These included services such as psychology, physiotherapy, podiatry and speech therapy. We will continue to fund telehealth for the current range of extra services on an ongoing basis. This year also demonstrated our ongoing strong support for a short-stay care setting, which minimizes the time a patient spends in hospital where clinically appropriate by giving them the option to recover and rehabilitate in the comfort of their own home. Building on our existing partnership with Nexus Hospitals in Melbourne in August, we invested in East Sydney Private Hospital to help the hospital and the doctors scale this model. The traditional approach in Australia for customers having a hip replacement, for example, can see them spending 5 days in an acute hospital ward with around half then going on to spend another 9 days or so in rehab. Out-of-pocket costs can also range between $2,000 to $3,000 and likely more in cities such as Melbourne, Sydney or Canberra. For customers taking part in our no gap joint replacement pilot program, they can be home within a couple of days with no medical out-of-pocket costs with full in-home support by nurses, allied health practitioners and personal carers. This program gives customers more choice in how their care is delivered with the care always led by the patient's doctor. This model of carries widespread, if not routine, in many other countries. The program is also in place at hospitals in Brisbane, Adelaide and shortly in Perth and Canberra. Moreover, we are being approached by hospitals and doctors wanting to take part and seeing interest from hundreds of customers, including those from areas where the program is not yet available. Furthermore, we continue to work with health care providers to review other partnerships in additional short-stay specialities with the focus on doctor-led high-quality patient outcomes at an affordable rate. We're also a champion of clinical in-home care as a substitute for going to hospital for many patients. COVID has fast-tracked our Medibank at Home program in areas such as rehab, heart health, chemotherapy and dialysis. In fact, we saw an almost 200% increase in the number of Medibank customers taking up these programs and pilots in FY '20 with further meaningful growth post 30 June. The majority of these services have been delivered by our Home Support Services team. One customer that stands out for me is Yvonne who featured in the clip at the beginning of the meeting. With her husband, Yvonne had been making a 6-hour round trip 3 times a week to hospital for dialysis. That was until last year when she joined our Dialysis at Home program and we started coming to her instead. Hearing about her experience and the impact on her quality of life reinforces the practical and emotional benefits of this program. Last month, a joint venture between Medibank and Calvary Health Care was chosen to deliver what is projected to be one of Australia's largest hospital in the home programs on behalf of the South Australian government. My Home Hospital will deliver acute medical care for a range of treatments to public patients across Adelaide in their own home instead of a physical hospital where clinically appropriate. These patients will have a care coordinator working alongside a clinical team and their My Home Hospital doctor to support them through the development of a treatment plan and their ongoing care. We also have the technology capabilities to conduct virtual consultations directly with patients in their own home and to remotely monitor vital signs and observations, such as their pulse, temperature, blood oxygen and blood pressure. We're confident that the combination of service and technological innovation behind My Home Hospital will inform an expanded virtual hospital model across Australia. There is significant scope for this service to be offered to public and private patients as is the case in international markets. Short stay and My Home Hospital signal our willingness to work in partnership with providers who have the same end goal in mind, that is to deliver doctor-led, high-quality, affordable health care. You should expect to see us strike more provider partnerships like these. While the health system has responded incredibly well to the pandemic and demonstrated the strength of Australia's world-class dual public and private system, there has been some disruption. Back in April, all private hospitals and their 100,000-strong workforce were made available to the federal and state governments to support Australia's COVID preparation and response. And as part of a national shutdown, the government paused many elective surgeries and restricted access to allied health providers. On one hand, this ability to mobilize Australia's health services was an example of why our system is the envy of most countries around the world. On the other hand, it meant that many patients across both public and private systems had their care delayed. At Medibank, we saw claims at around 50% of normal levels over the 6-week period. The claims have since bounced back in the majority of states and territories to be in line with our expectations. This rebound was always our expectation just as it was our regulator, APRA's, which outlined to insurers guidance on accounting for deferred claims. And this is why we have accrued a $297 million balance sheet liability in FY '20. So we are in a position to fund those future claims that were deferred. We believe our provisioning remains prudent, but it remains too early to determine if all of these deferred claims will ultimately materialize. While some commentary has suggested insurers are profiting from the pandemic, this has not been the case as demonstrated by all of the recent private health insurance statistics published by APRA. The government's focus on COVID this year has meant progress on private health care reform has slowed. While we worked hard to deliver our lowest average premium increase in 19 years, which we then postponed for 6 months, the pressure on premiums brought about by rising health costs remains, and it will stay that way until systemic changes are made given Australia's aging population. Lowering prostheses prices continues to be at the top of this list. This reform, which would bring prices in the private sector down into line with what the public system pays and what is charged overseas will give up to $400 million in value back annually to customers. Because of this, we welcomed the statement in the October budget that the government will remain focused on prostheses list reform. It's also promising that the government is working with the industry to make home and community-based care more accessible through private health insurance while continuing to consider possible supportive changes to the means tested private health insurance rebate and the Medicare levy surcharge. In the meantime, we will continue to be disciplined on our own costs. Having delivered $20 million of productivity savings in FY '20, we have committed to another $50 million of cost reduction over the next 3 years. This will position Medibank as the most efficient large provider of private health insurance in Australia, an imperative given the likely ongoing challenging environment. Turning now to an update on the outlook we provided to the market at our financial results in August. In the first 4 months of this financial year, we've made very good progress on policyholder numbers with total growth of approximately 41,100 or 2.27%. This includes 33,100 new policyholders and 8,000 policyholders who recommenced their coverage after suspending their policy under our financial hardship program. Pleasingly, approximately 1/3 of new policyholders were in the Medibank brand, in line with our aspiration to grow in FY '21. Our expectation yet to be confirmed is that we did grow market share in quarter 1 FY '21. Our customers continue to utilize our financial hardship options. While a number of customers have resumed coverage, at the end of October, approximately 10,200 policyholders remain suspended as a result of COVID. Given the strong start we have seen thus far in FY '21, we are raising the bar in our aspiration to grow policyholders in FY '21. We now aim to increase market share and achieve total policyholder growth of approximately 2% in a flat market. While this is a pleasing result, there still remains a level of uncertainty in the economy post-COVID. There are no other changes to the outlook provided at our FY '20 financial results, including that we expect our underlying drawing rate growth or increase in annualized average net claims expense per policy unit for FY '21 to be broadly in line with FY '20. Given our strong capital position, we will continue to target modest-sized inorganic growth opportunities for Medibank Health to build further health care capability, and we will review health insurance opportunities in a distressed operating environment as they present. Finally, I want to echo Mike's remarks on Elizabeth Alexander, who, as both a Director and Chairman of Medibank, made an enormous contribution to our company. I want to thank Elizabeth for her expertise and counsel and for the way she guided Medibank to be the company it is today. And having worked alongside Mike and his role on the Board for the past 3 years, the executive leadership team very much looks forward to working even closer with Mike in his new capacity as Medibank Chairman. The challenges in 2020 have been significant, and it's likely that the health and financial impacts of COVID will remain for some time. Despite this uncertainty, I am confident that our strategy, our commitment to customers and our sound financial position will continue to help us successfully navigate the ongoing COVID challenges. Furthermore, this environment will reinforce our important role in the health system, an increasingly important role we have in improving the health and well-being of our customers. There remains considerable opportunity sitting in front of us that we are well placed to deliver on. This includes continuing to deliver differentiated products and services for our customers and hence growing our health insurance business at a faster rate, driving health system change to ensure private health care sustainability and building a more meaningful health care business. Once again, I'd like to thank our people. I couldn't be more proud of them. And finally, to you, our shareholders, thank you for your ongoing support of Medibank now and into the future. I'll now hand it back to Mike.

Thanks, Craig. We've now reached the formal business of our meeting. Given today's virtual format and the differences to previous years, I'll first run through the meeting procedures in some detail. This is a shareholder meeting. And as such, only shareholders, their attorneys, proxies and corporate representatives may vote and ask questions. [Operator Instructions] Thank you to those shareholders who sent us questions in advance of today's meeting. Where relevant, we've contacted the shareholder or addressed the question in either Craig's or my remarks. We'll address the remaining questions during the period for questions later in the meeting. [Operator Instructions] If you have personal matters to discuss about your health insurance, please call 1300-369-968 today or tomorrow until 6:00 p.m. Australian Eastern Daylight Time. I'll now repeat the procedure for voting on the Lumi platform. If you are eligible to vote, a voting icon will appear on your screen's navigation bar. Once you click on this icon, you'll see the resolutions on your screen. To cast your vote, select one of the options: for, against or abstain for each resolution. Your selection will be highlighted and the vote is automatically recorded, but you have the ability to change your vote at any time until I declare the voting closed. There are 6 items of business before the company's Annual General Meeting this morning. These are set out in the notice of meeting, which you would have received. 5 of these are to be voted on and will be determined by a poll. As I indicated earlier, the polls are open. Given we're meeting virtually, and we're using a number of different forms of technologies to take shareholder questions, we'll present all items of business at the same time and then provide an opportunity for questions after all items of business have been introduced so that we can accommodate as many questions as possible. Medibank's share registry, Computershare, has given me a report of the proxy voting instructions received for each item of business. As advised in the notice of meeting, open proxies held by me as chairman of the meeting have been cast in favor of each resolution. The poll will close shortly before the end of this meeting, allowing shareholders and proxy holders present to cast their vote. I'll give you advance notice ahead of closing the voting. We'll now move to the first item of business. This item isn't subject to a vote and therefore, doesn't require you to cast a vote on the Lumi platform. The Medibank financial statements for the year ended 30 June 2020, the directors' report and the auditors' report were released to the ASX and published in the annual report and on the company's website. As previously mentioned, we'll take questions on this item following the introduction of all items of business. In addition, the company's auditor, PricewaterhouseCoopers, is represented here today by Colin Heath and Kerrie Murray, who are available to respond to questions about the audit of the accounts. We'll now move on to items 2, 3 and 4, which are the reelections of 3 of our directors, Tracey Batten, Anna Bligh and me. Ordinarily, our directors standing for reelection would briefly address the meeting to detail the knowledge and experience they bring to Medibank. This year, given the virtual format of the meeting, the directors will not personally deliver speeches but will be available on teleconference to answer questions during the discussion period later in the meeting. Biographies of the directors standing for reelection can be found in the notice of meeting. Your Board, with each director standing for reelection abstaining, recommends unanimously that you vote for the reelection of each director on the basis of their skills, qualifications and experience and their significant contributions to the activities of the Board. Now moving to item 5 of the items of business. Item 5 relates to the remuneration report, which is put to the meeting in accordance with the Corporations Act. The resolution is to adopt the remuneration report for the year ended 30 June 2020. Medibank aims to reward executives fairly for delivering the company's strategy in a manner that meets community and customer expectations and delivers sustainable shareholder returns. The remuneration report provides extensive disclosure of director and executive remuneration and is set out on Pages 48 to 72 of the annual report. Under the Corporations Act, this vote is advisory only. However, as directors, we give serious consideration to the voting results and comments made upon this item when we review the company's remuneration policies. The Board recommends that you vote to adopt the remuneration report. Linda Nicholls, the Chair of the Board's People and Remuneration Committee, is attending via teleconference. Linda will be available to respond to your questions during the discussion period. We now turn to item 6, the final item of business. The resolution is to approve the granting of performance rights to Craig Drummond, Chief Executive Officer, to be issued in accordance with Medibank's 2021 long-term incentive plan. Medibank's long-term incentive plan is detailed in the remuneration report. It's designed to align the interest of the Chief Executive Officer with the interest of shareholders and to this end, put a significant proportion of his remuneration at risk. The rights to be granted are detailed in the notice of meeting, along with the vesting conditions. It's important to understand that the performance rights only vest in shares for the Chief Executive Officer on the achievement of performance hurdles, which are aligned to shareholder interests. If the performance hurdles are not achieved, then the Chief Executive Officer will receive no shares. If the performance hurdles are met, then the rights will convert to shares, which the Chief Executive Officer will receive. The outcome of the performance rights will be detailed in the remuneration report following the conclusion of the performance period on 30th of June 2023. Your Board, other than Craig Drummond, recommends that you vote in favor of this resolution. We've now completed our introduction of all items of business. Before moving to questions, we'll first display results of the proxies received on resolutions 2 to 6. I'd also like to remind you that the polls remain open, and you can cast vote at any time until I close the polls. We're now ready to respond to questions, and we'll begin with those on the phone.

Operator, are there any questions on the telephone?

Thank you, Chairman. There are no questions at this time.

Thank you. As there are no questions at this time, I'll now move to questions on the Lumi platform.

Chairman, we have received pre-submitted questions from Mrs. [ Helena Miranda Feder ] and Mr. [ Peter Hamilton ], who asked, do you have a share reinvestment plan? And if not, when will you have one?

Mrs. Feder and Mr. Hamilton, thank you for your question. We do not have a share reinvestment plan at this stage, although it's something that we continue to review on an annual basis. At the moment, we do not have a plan to introduce a dividend reinvestment plan during the 2021 financial year. Can I have the next question, please?

Chairman, we have received a question related to Item 1. It comes from [ Peter Ed ] from the Australian Shareholders' Association, which represents retail shareholders. "Today, I represent 557 shareholders holding 3.36 million shares. Given that a substantial proportion of the $143 million reduction in net profit after tax can be related to the $100 million reduction in investment income and historic low interest rates, are you considering a review of current settings for your investment portfolio?"

Mr. Ed, thank you for your question, and thank you also to the Australian Shareholders' Association for the engagement that you've had with our company over many years. We regularly review our investment portfolio and the strategy that we follow. However, at this stage, we feel that it is appropriate for the long term. A lot of those losses were mark-to-market losses, a number of which have been recovered subsequent to 30th of June. But Craig, I don't know whether you want to add anything further to that.