nib holdings limited (NHF) Earnings Call Transcript & Summary

Ladies and gentlemen, good afternoon. My name is Steve Crane, Chairman of nib holdings limited. And on behalf of the nib Board, it gives me great pleasure to welcome you to our first ever Virtual Annual General Meeting. Given the changing nature of the COVID-19 pandemic and associated restrictions, we believe that hosting the 2020 AGM virtually is the most responsible and safe way to conduct this year's meeting. You will still be able to vote and ask questions of your Board via the webcast. So please follow the instructions available via the website and as we will discuss today. Before we begin today's meeting, I'd like to acknowledge the traditional custodians of country throughout Australia and recognize their continuing connection to the land, waters and community. I pay my respects to them and their culture and to elders, both past and present. I would also like to acknowledge the traditional custodians of the land on which we meet today and extend my respect to the Aboriginal and Torres Strait Islander peoples who are present today, for they hold the memories, the traditions, the cultures and the hopes of Aboriginal and Torres Strait Islander peoples across the nation. For our New Zealand viewers, [Foreign Language]. It is now gone past 1 p.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. I would now like to introduce the nib representatives who are joining me here in the studio today. Firstly, Independent Non-Executive Directors, Donal O'Dwyer.

Good afternoon.

Anne Loveridge.

Good afternoon.

Lee Ausburn.

Good afternoon.

David Gordon.

Good afternoon.

And Jacqueline Chow.

Good afternoon.

Managing Director, Chief Executive Officer, Mark Fitzgibbon.

Hi, everybody.

And Executive Legal and Chief -- Group Executive Legal and Chief Risk Officer, General Counsel and Company Secretary, Ros Toms.

Good afternoon.

Joining us via webcast from Victoria is Group Chief Financial Officer, Nick Freeman. Unfortunately, Nick could not be with us in person due to the current COVID-19 restrictions. So hello, Nick.

Good afternoon.

It's good to see he's got that nib livery up there. Well done. External lawyers, King & Wood Mallesons; our share registry, Computershare; and auditors, PricewaterhouseCoopers. Shortly, I'll present my report on nib's operations for the 2020 financial year before handing over to your Managing Director and CEO, Mark Fitzgibbon, who will give his year-end review and provide an outlook for our business for the 2021 financial year. Following Mark's presentation, I'll then address the items of business as they appear on the Notice of Meeting, which are: consideration of the Financial Report, Directors' Report and Independent Auditor's report of nib for each of the 2020 financial year; consideration of the Remuneration Report; the election of Mr. David Gordon as Non-Executive Director of the company; the reelection of Ms. Lee Ausburn as a Non-Executive Director of the company; and the reelection of Anne Loveridge as a Non-Executive Director of the company; and approval of Mark Fitzgibbon's participation in the long-term incentive plan. Today, we're also bringing a special vote to our meeting, the People's Choice vote. Shareholders joining us online have the chance to vote for one of 3 nib foundation Health Smart Partners to receive a share of $40,000 in funding. Waves of Wellness, Cancer Council Queensland and Life Education New South Wales are the 3 charities you can vote for, who are delivering impactful health promotion and prevention programs for young Australians. Further information on these charities is currently on the platform. Voting is open now on your screen, and we'll close after you hear from our Managing Director, Mark Fitzgibbon. I look forward to sharing the results with you at the end of the meeting. Shareholders will be given the opportunity to ask questions in relation to any aspect of nib, including its management. Responses to such questions or general matters of business will take place under the first item of business. For subsequent agenda items, I will only allow questions and comments specific to those items. A reminder that 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. Questions via the online platform are able to be submitted now. Questions via the telephone line will be answered following completion of online question responses. I will endeavor to answer all relevant questions from shareholders during today's meeting. And if we receive similar questions regarding the same topic, we'll respond to those questions collectively. However, as Chairman, I reserve the right to rule out of order any question or questions I consider to be outside the scope of the meeting. We have also received a number of written questions from shareholders prior to today's meeting, and I confirm that any shareholder who has submitted a written question 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 health cover policy, please contact us on 13 14 63 or by e-mailing us at nib@nib.com.au. After the Financial Report, Directors' Report and Independent Auditor's report have been considered, we will then turn in -- deal in turn with each item of business as set out in the Notice of Meeting. Please note that copies of nib's 2020 Shareholder Review, Annual Report and Notice of Meeting are available on our website, nib.com.au/shareholders. Participants who have logged into the online platform as a shareholder will be able to vote once I have opened the voting. I'll provide further instructions before the business of the meeting. I would now like to present to you my report on nib's performance for the fiscal year 2020. The unprecedented events of fiscal year 2020, which started with the catastrophic drought and bushfires, only to be followed by COVID-19 global health pandemic have caused widespread devastation and despair among the communities in which we operate around the globe. While the nib group hasn't been immune to the challenge, as you would expect, we have remained focused and responding appropriately to the needs of our members, travelers and employees as well as ensuring our own business sustainability. I'm very proud to say that nib has been swift and deliberate in our response to COVID-19. To date, our support package totals more than $45 million and includes 6-month postponement of the April 1, 2020, health insurance premium increase as well as premium waivers and suspensions. We also waived the October 1, 2020, premium increase for 6 months for our arhi members on JobKeeper and JobSeeker. To ensure our members had access to appropriate health cover, we expanded coverage for chest, lung, kidney and bladder or other treatments related to COVID-19 across all levels of our hospital cut at no additional cost. Responding to the frontline health crisis when the pandemic first began and the short supply of PPE, we also sourced and donated 100,000 surgical masks to health care and allied workers. We've also donated more than $1.5 million to community and clinical initiatives in Australia and New Zealand. And over the course of the year, the Board has been committed to keeping our shareholders, particularly our 136,000 retail shareholders, up-to-date on the impact of COVID-19 through communications such as letters to shareholders. Unfortunately, with no real end in sight for the pandemic, it appears for this foreseeable future that we need to live and adapt as best we can to the impact of the coronavirus. I want to assure you that the nib group is in very strong shape and remains as purpose-driven as ever. We won't lose sight of the crucial job we have in helping to protect our members and travelers against the financial risk of disease, sickness and injury and enabling them to quickly access world-class health care. While we understand the health and economic impacts of COVID-19 have caused so much misery and uncertainty around the globe, for our businesses we also see opportunity. The pandemic has clearly heightened the potential risk of disease and need for protection. We've accelerated our plans to better protect disease risk amongst our members and prevent or better manage those risks. As our Managing Director, Mark Fitzgibbon, will touch on later, we took a giant stride in our ambitions to make our value proposition as much about health care prevention as it is about cure with the creation of a joint venture, Honeysuckle Health, with global health care company, Cigna. Honeysuckle Health is a very exciting and significant step in our shift from sick care to well care and being much more about improving members' health and well-being rather than just being there when they get sick or injured. We've also continued to work as hard as possible to improve health insurance affordability and value. Our 2020 premium increase of 2.9% was well below medical inflation, our lowest in 17 years and the sixth year running that we've been able to deliver a premium change lower than the previous year. Private health insurance reform continues to be a hot topic, and we welcome the recent announcement in the Federal budget to help improve health insurance transparency, efficiency and value. We are especially supportive of the Commonwealth's plans to review current risk equalization arrangements, which discourage young people from taking out private health insurance. We look forward to engaging with industry stakeholders and the government as part of the review process in the months ahead. Our charitable arm, nib foundation, contributed $2.1 million during the year towards various community and health prevention initiatives, consistent with its charter to support the health and well-being of the communities we serve. The foundation's various partnership and grants reached over 740,000 people during the financial year 2020, and since inception in 2008, the foundation has distributed over $21 million in funding, and we're very proud of that. On behalf of the nib Board, I would like to congratulate the nib foundation team for their unwavering commitment and dedication to improving the health and well-being of communities and particularly the vulnerable. While our business strategy and very capable management team have nib well positioned to navigate the health and economic effects of the global pandemic, our financial year '20 results were somewhat mixed with COVID-19 a key factor. In what were tough macro-economic conditions, the group revenue grew 3.4% to $2.5 billion, and group underwriting (sic) [ underlying ] operating profit of $150.1 million was disappointing and down on last year's $201.8 million. It's worth noting the operating profit result has absorbed the impacts of COVID-19. And in addition, we have made a $98.8 million claims provision as an estimate for treatment that was deferred in financial year '20 due to the coronavirus. It is prudent to cover what we best estimate will be a claims catch-up over the course of financial year '21. While COVID-19 created some challenges in terms of our operating environment, pleasingly, our member-first focus saw our member satisfaction measure, or Net Promoter Score, improve to 34.8 from last year's 32.5. I want to thank all of our employees who put the interest and well-being of our members and travelers front and center to deliver on our promise. This is a tremendous reflection of nib's workplace culture, values and organizational capability. Financial year '20 investment income was impacted by volatile equity markets, with net investment income down 54% to $16.6 million, while net profit after tax of $89.2 million was down approximately 40%. The reduction in earnings per share to $0.198 was also down 40% and was disappointing. Clearly, there are hurdles to tackle across the group, most notably our travel insurance and distribution business, nib Travel, which is operating in a very difficult market due to travel restrictions. The full year dividend of $0.14 a share, fully franked, while down on last year, still represents a payout ratio of 71% of the financial year '20 net profit after tax. The final dividend of $0.04 per share was paid to shareholders on October 6, 2020. In arriving at the final dividend, the Board closely considered a number of scenarios and the group's capital position. Acknowledging ongoing COVID-19 uncertainty and shareholder expectations, we believe the final dividend constitutes a prudent and balanced position. During the year, we have continued to enhance our sustainability capability or what is often termed Environmental, Social and Governance, or ESG. Driving our efforts is the genuine belief that what's good for the communities in which we operate is also good for nib and with that, our shareholders. While I've already noted the fantastic work of our nib foundation to help people and communities live long, healthier lives, we've also made great progress in other areas. Just recently, nib was named one of the world's most diverse and inclusive companies as part of Refinitiv 2020 Diversity and Inclusion Index. Overall, nib placed 87th globally in the Refinitiv 2020 Diversity and Inclusion Index and was one of only 9 Australian companies included in the index. And last week, nib published our inaugural Reflect Reconciliation Action Plan, reflecting our commitment to work towards meaningful and effective reconciliation with Aboriginal and Torres Strait Islander peoples in Australia. As a health care business, we especially view population health as the greatest opportunity to make a difference. There's no better example of this than our partnership in New Zealand supporting Maori iwi, Ngati Whatua Orakei, which is designed to improve access to quality health care with the aim of improving health outcomes for their families. This partnership is delivering some great results, and we're looking to expand this capability to include other Maori partnerships and geographies. Succession planning and having the right mix on the Board and among our senior management regarding skills, diversity and experience remains a priority for your Board. In line with this, Non-Executive Director, Christine McLoughlin, recently retired from the Board after almost 10 years. Christine is one of Australia's most respected and astute company directors, and she has made a wonderful contribution to nib's growth and success. And I would really like to personally thank her for her passion, insights, leadership at nib over almost a decade. We also welcome David Gordon to the Board, who you will hear from later in the meeting. David has over 20 years' experience as a director of both public and private companies and more than 30 years in corporate advisory roles to Australian and international organizations and is already making a valuable contribution. To conclude, while our financial and operating results for financial year '20 and into early fiscal '21 continue to be impacted by COVID-19, your Board is very confident nib's business and strategy and very capable management team led by Mark have us well placed to continue to deliver sustainable and strong returns to you, our shareholders. I would like to thank my fellow directors, our executive team and all our wonderful employees across the nib group for their ongoing commitment and sense of purpose to helping deliver another successful year. I would now like to introduce Managing Director, Mark Fitzgibbon, who will provide his summary of the year and outlook for the period ahead. Mark?

Thanks, Steve, and good day, everybody. I'd also like to pay my -- acknowledge the traditional owners of the land, from which we're presenting the day and pay our respects. Okay. Look, I'm presenting a lot of information today, some of which will be very familiar to many of you. But having said that, there is some new information to share today. So for those of you who are familiar with this information, I hope that's of some value to you today. I always like to start with this slide because it just highlights the primacy of our mission as a business. This is the way we think about, which is basically to help people -- support people when they're in need of health care. And you can see the massive contribution we make towards health care in this country. Last year, we funded over 350,000 hospital admissions. You can see a little bit of a breakdown of the case mix of that; and over 3.5 million ancillary visits. Having said that, 3 years from now, I'd like to think we're talking as much about how we kept people well in the first place and out of hospital and not needing the sick care that we provide today because of the success we've had in predicting risk in individuals and keeping them healthy and well. And I'll talk a little bit more about that further on when we look forward. Again, numbers which will be very familiar to you. All of these numbers -- and we're not wanting to make excuses, but all these numbers are impacted by COVID-19. So our revenue growth there, which took us to $2.5 billion, still impressive in very difficult market conditions, but would have been higher if not for number of COVID-related factors, including the fact that we gave -- deferred our 1st of April premium increase for all of our 1.2 million arhi members. COVID played out in terms of our profitability as well. Something to note there that, that profitability was impacted by a very large provision, a provision we've made recognizing claims that were avoided around April and May this year at the nadir of COVID-19 we expect will come back in this current financial year. And I'll come back to that point shortly. Steve has already mentioned the fact that our investment income was down, again, impacted by market conditions with COVID-19 having an obvious role to play in that. And you can see how that all played out into the related numbers, our earnings per share, our net profit after tax and, of course, our important dividend. Might be a lot of information on this slide. So I'll just call out a few of the key points. So our core flagship business, arhi, did very well in difficult market conditions. It grew its policyholder base by almost 2%, 1.9%, which doesn't sound like a lot in the scheme of things, but it accounted for more than 40% of the entire industry growth during last year. New Zealand had a similar experience with strong growth and strong margins in the business. And notwithstanding COVID-19's obvious impact on the inflow of international students and workers, our -- those businesses still did pretty well under the circumstances. As I've touched upon, profitability was impacted by the provision, so I won't go into any more depth about that. I'll comment further on that provisioning and what we're right now actually seeing against that provisioning that was made, what, 3 or 4 months ago now. And travel was -- as Steve has already mentioned, was [indiscernible] consequential to COVID-19 and restrictions on international travel. But we're a positive company, we'd like to search for silver linings, and there were quite a few. Steve has already mentioned, the business remains very well capitalized, well beyond -- we're holding a level of capital well beyond our prudential requirements and our own internal targets. There is certainly evidence of heightened awareness of risk, of course, in society and the community of the risk of disease and the need for financial protection, the kind of which we provide, and I'll provide some evidence of that a bit further on. We are seeing some relaxation of the restrictions on foreign travel, some experimentation going on with international students by some universities and some additional migration associated with the needs of the rural workforce such as seasonal fruit pickers. So we are seeing some signs of recovery in international workers and students. Our operating expenses are down and continue to be pushed further and further down as we drive for higher levels of automation and process improvement and efficiency in the business. Honeysuckle Health is the star arising. I'll talk to that a bit further on. And some of the experimentation we're doing in respect of how we pay for hospital and other clinical treatment is showing very good signs of success. So for example, this clinical partners program we have with a network of orthopedic surgeons in Newcastle and now Wollongong is providing a much enhanced experience for our members, particularly in terms of avoiding out-of-pocket costs, which we know are a real bang in the experience of many of our members. Okay. So here's some new information that we thought is worth sharing, particularly given the ongoing uncertainty around COVID-19 and its impact on the marketplace and our own businesses. So these are the first quarter results for this current financial year, so in other words, July, August and September. And they're compared with last year's results. So you can see in arhi, our mainstay business, sales are actually up 9%, again, indicative of the kind of heightened community awareness there is about the risk of disease and the need for cover. And net growth is actually up 60%, quarter-on-quarter. Now one swallow doesn't make a summer, we all appreciate, but it's a decent start to the year. And while macroeconomic factors could yet work against the economy as a whole, we're feeling reasonably comfortable with our start to the year. The international workers and students numbers quarter-on-quarter are down, as you'd expect, because last year, we didn't have the kind of restrictions in the first quarter that we've suffered this year or experienced this year. New Zealand figures look a little bit down, but that's because last year was simply so good. Last year, we picked up a very large corporate account. So put that aside, this year's numbers are still performing very well and not inconsistent with what we're seeing in Australia in respect of the marketplace and consumer sentiment. And of course, travel is way down, given the restrictions on international travel and the fact that people just aren't traveling. So that's the sales front. The next part of that graph shows the claims experience we're having. So this is divided into hospital cover and ancillary cover. You can see from that first segment there that if you take out Victoria, which has continued to experience Stage 4 style lockdowns, the country -- year-on-year claims expense is growing at about 6.1%. Now that's consistent with the provisioning that we allowed for at the 30th of June, maybe a little bit less than the provisioning we allowed for at the 30th of June. So this is the surge in activity which is coming back, which didn't happen in, as I mentioned, April and May last year. If you take into account Victoria and what's really happening there, at a national level, the year-on-year growth is only 3.2%, which is well beneath the kind of provisioning we were contemplating at around June. Now that's -- again, that's not a sign of things to come necessarily, but it's a point of comfort rather than a point of distress when you think about the extent of provisioning we made at 30th of June. Probably a better indicator of what's happening with hospitals and the catch-up of treatment avoided in April and May and still being avoided in parts of Victoria are eligibility checks. This is where people contacted us to establish whether or not they're covered for a certain procedure. So again, consistent with the claims experience, we're seeing growth. If you exclude Victoria, we're about 7%, but including Victoria, growth of only about 2.4%. And the ancillary benefits, similar dichotomy. With Victoria -- without Victoria, we're seeing about 11% growth, again, consistent with our provisioning, but with Victoria, growth is only about 1.5%. So that's -- no one is declaring victory in terms of the accuracy of our provisioning, but certainly, the signs based upon the first quarter give us some level of confidence and comfort. Our business strategy will be familiar to most of you. It's around the personalization of the health care experience for our members. I'll come back to that in a moment. It's certainly around affordability and sustainability, how do we maintain membership, how do we maintain participation in the marketplace across Australia and New Zealand in the face of rising health care costs and rising premiums. And a lot happening in the business and that front in terms of not only efficiency, but better managing utilization, and as I started off by saying, hopefully, keeping people healthy and well and out of hospital in the first place. We're looking to grow our arhi business. We have a portfolio of assets and businesses built around our traditional core business we call arhi, but arhi we recognize is still the economic engine for the company. And I expect we'll be continuing to invest in that core business and continuing to grow that business. Economies of scope is just a fancy terminology to explain the fact that we're taking this core and developing in related businesses, such as international workers and students and New Zealand and travel insurance. Racing the Red Queen is just our characterization of the need for innovation and experimentation. And with experimentation, sometimes -- recognizing sometimes success and sometimes not so much success. So this notion of personalization we have is that we want to transform the business away from being one that's just there for our members they're already sick or injured. That's been our tradition. That's been the tradition of most health care systems, not just private health care systems, but social health care systems like Medicare. And we believe we're able to become more relevant to our members in that respect basically by providing them with insight into their health risk and means to prevent those risks and services and products designed to do I just said. So Honeysuckle Health is a new joint venture we have created with a very large global USA-based company, Cigna Corporation, a $60 billion company located in the U.S.A. And the purpose of our joint venture is twofold as this slide demonstrates. Firstly, it's there to apply data science to take as much information we can gather about individuals, interpret that information and be able to present them and their doctors with a really detailed and reliable insight into the risk of that individual faces. And then as a consequence of that person understanding their risk and how they might avoid or mitigate that risk or prevent the risk of disease, to provide them with a broad range of health care products and services to that end. So this is the future where we're not just about connecting our people with doctors and hospitals and dentists [ once they ] already need attention, this is a well where we're actually hooking them up with doctors and other providers, preventative services, which help them maintain their host based upon their risk profile and, as I've mentioned a couple of times now, keep them healthy and well and out of hospital. Honeysuckle Health will, in some cases, deliver those preventative services directly itself or subcontract to other providers of preventative and management service. So look, I like to think you'll be hearing more and more about Honeysuckle Health into the future and how it's making such an enormous contribution to this vision we have of being as much about the health care of our members rather than just their sick care. This next slide is just an outlook of what -- how we're thinking about the near, medium and longer-term future. We shared that at the time of our annual results back in August, but I might just reflect on them some more. In arhi, as I've touched upon, we are seeing strong sales and retention performance. Again, it's only one quarter, but we welcome the development we're seeing in the market. We're certainly seeing a lot of new to category, people coming back into health care. So that's welcome because it means we're not just churning the same people across the various health insurers, we're actually attracting new members to the system, particularly younger people. We're targeting growth of 2% to 3% for the year and beyond. As I've touched upon, the claims experience remains clouded by COVID-19, especially given the second round of closures we saw in Victoria. That should become clearer by the half year. There continues to be a heavy emphasis on operating expenses, and we target 6% net operating profit in arhi while acknowledging there is some pricing risk around that. So we were able to apply the 1st of April increases on the 1st of October this year. So they were deferred for our members for a period of 6 months. There's another pricing round coming up on the 1st of April next year. I expect that will play out as usual. But also, as usual, we expect there'll be some scrutiny on our price applications and the inevitable media exposure and politics which surround that. And we're certainly on the lookout on an opportunistic basis for any M&A opportunity. Whether or not the industry becomes more worried in the future and, therefore, some health funds start looking around for merger partners, which has often been predicted, only time would tell. In respect of international workers and students, we still are making sales, even though, as I've mentioned, they've been hampered by travel restrictions. Profitability is holding up okay against last year. There is some competitive pressures in the marketplace around the international students. A number of our competitors have caught on to the idea that this is a very lucrative and attractive market and one that's going to grow and grow. But we do expect strong recovery post COVID-19. Not that we celebrate the conditions in Europe and the U.S.A., but there are conditions which will likely encourage more and more students and international workers to see Australia as a safer destination for them. New Zealand is experiencing good sales condition. As I've mentioned, their claims experience with COVID-19 is similar to ours, except they don't have the -- they don't have the consequence of Victoria. So we are seeing claims catch-up around 10% over and above last year. We're making very good progress, Steve touched upon it earlier, in respect of our Maori business, our iwi business. This is where we're actually partnering with New Zealand Maori tribes to improve the health and wellness of their tribal population. So we have one tribe already, who we've been working with for 3 years of about 5,000 people, Ngati Whatua Orakei, but we see opportunities to establish similar partnerships with many additional tribes. nib Travel is an interesting one. Of course, things are very difficult at the moment. We are reacting to that by taking costs out of the business, recognizing that we're receiving very little revenue, but we're not going to take that many costs out of the business that in any way we damage the business because we still see the business and its various brands as being very powerful, particularly the World Nomads brands. So we weather the storm, keep the business on idle, awaiting normal market conditions to return and review the situation when things do improve, maybe in 12 or 18 months' time. China. We're still working our way up. We've been waiting for some time to actually procure a license to sell travel insurance. And although I've mentioned it before, I think we're inching towards it, and I expect we'll have some announcements to make about that in the next 3 to 6 months. In the meantime, the business we have there, which is about 30 people, is already providing health management services to a number of corporations in China and doing very well, generating, okay, only about $2.5 million in income, but from tiny acorns, mighty oaks grow. So I'll leave it at that. And Steve, thanks for the opportunity, and thank you, everyone, today for participating and look forward to taking any questions further on. Cheers.

Thank you, Mark. Please note, voting for the People's Choice vote is now closed, and the results will be shown at the end of the meeting. So I'm sure those charities will look forward to the benefit of that money. We'll now proceed with the formal business of the meeting. I propose to take the notice convening the meeting as read. And to maintain the flow, I will dispense with the formality of moving or seconding resolutions, as all matters are properly before the meeting. Please note that matters not pertaining to the meeting will not be covered today. The voting procedure for today's meeting will require all resolutions to go to a poll, as it is important that we recognize the voting intentions of all our shareholders. Maybe like I can say, in America, maybe they've got to make sure they get all the votes, I don't know. Participants who have logged -- that might have been too political, but there you go -- participants who have logged in to the online platform as a shareholder will be able to vote once I've opened the voting. When I declare that voting is open, a voting icon will appear on screen and the meeting resolutions will be displayed. To vote, click one of the voting options. Your response will be highlighted. To change your vote, simply click a different option, and that will overwrite it. The number of items you have voted on or are yet to vote on is displayed at the top of the screen, and votes may be changed up to the time voting is closed. Item 1 on the agenda is to receive and consider the Financial Report, Directors' Report and Independent Auditor's report of nib and the entities it controlled for the financial year ended June 30, 2020. These documents were sent to shareholders who are on the nib register on the September 25, 2020. The Notice of Meeting, proxy form and other associated documents were dispatched as required by the Corporations Act on the October 2, 2020. Shareholders have received this information in accordance with their selected nib shareholder communication preferences. And please note that if you haven't notified nib share registry regarding your shareholder communications preferences, the default preference is that you will receive the notice of meeting, proxy form and other associated documents in hard copy. If you would like to discuss or change your nib shareholder communications preferences, please see contact -- please see or contact our share registry provider, Computershare. I now put before the meeting nib's Financial Report, Directors' Report and Independent Auditor's report. And I'd like to remind you that this is the only item on today's agenda where you have a formal opportunity to ask questions or make comments about the performance of nib and its management. I would also like to advise the meeting that Mr. Scott Fergusson, partner at PricewaterhouseCoopers, is here today and available to respond to questions at this time. I remind shareholders that directors are responsible for the preparation and presentation of the financial report. The auditor's responsibility is to conduct an audit and to give an independent opinion on that financial report. I note that the auditor has determined that there have been no valid questions received from shareholders prior to the meeting. Any questions in relation to these reports or any aspect of nib's operations or its management generally will be addressed now. I will now answer any questions or comments relating to this resolution from the online platform first. Ros, are there any questions?

Yes, Chairman. I have one question from Colfam Superannuation. Mr. Chairman, on behalf of Team Invest members, I'd like your assurance that COVID-19 restrictions permitting, you will be reverting to a physical AGM in 2021. Our first preference would be a hybrid AGM so shareholders could attend in-person or virtually.

Yes. Thanks very much. Look, I think -- I expect this is going to become the norm. Yes, I'm absolutely certain that, provided we can, we will definitely have an in-person meeting, but we will also provide the opportunity for people to come in via video link as we've done this time because I think that's the way people want to operate now. So -- but we will definitely have an in-person meeting. I think it's much more engaging. I'm standing here reading screens and looking at my directors, it's pretty impersonal. So to be quite honest, I actually enjoy being in front of people who are interested in the company myself. So I'm sure that's what we'll do. Thanks, Ros. Any other questions?

There are no further questions in relation to item 1 from the webcast.

Thanks, Ros. I'll now answer any questions or comments relating to this resolution from the telephone line. The operator on the telephone line, if you can tell me if there are any questions, please?

There's no further questions from the telephone lines.

Okay. The other thing is I think it results in less questions, but there you go. Now that we have considered the reports, we will deal in turn with each of the resolutions set out in the Notice of Meeting. The voting procedure is as follows. I will open all resolutions to a poll. Voting will remain open until the end of the meeting. I'll explain each resolution, then there will be an opportunity for questions regarding the resolution. At this time, I will inform the meeting whether any proxy votes have been received and how the proxy votes are to be cast. Voting, to pass a resolution, will be determined by a full poll resulting -- results showing the combination of those votes cast on the webcast and the proxies received prior to this meeting -- or prior to the meeting, I should say. Poll results for all resolutions will be shown at the end of the meeting after voting is closed. I declare that voting for all resolutions is now open. [Voting]

Item 2 on the agenda relates to the Remuneration Report contained within the Financial Report for the 2020 financial year. In accordance with the Corporations Act, this vote is advisory only, and the outcome will not be binding on the Board. In the Remuneration Report, we have endeavored to provide shareholders with clear and comprehensive information on the terms of and rationale behind nib's remuneration reward framework. Nib's approach to remuneration is simple and underpinned by a strong governance framework. Our philosophy needs to be fit for purpose, aligned to our organizational strategy. We need to ensure it keeps pace with our growth aspirations and allows us to continue to attract, motivate, develop and retain the right people to lead the nib group. Consistent with our approach in previous years, we are actively engaged and seek regular feedback on our remuneration framework from key interest groups, including shareholders, proxy advisers and other shareholder representative groups, including the Australian Shareholders' Association. The Board believes that nib's remuneration structure creates an incentive for exceptional performance from our executives, delivers financial reward to them when you invest in nib -- when your investment in nib has increased in value and that it is competitive and reflective of comparable roles in the market. The directors unanimously recommend that shareholders vote in favor of adopting the Remuneration Report of nib for the financial year ended June 30, 2020, as set out in the Directors' Report. I will now answer any questions or comments relating to this resolution from the online platform. And Ros, do we have any questions?

Chairman, there are no questions in relation to Item 2.

Okay. Thank you. I'll now answer any questions or comments relating to this resolution from the telephone line. Operator, are there any questions?

There are no further questions at this time.

Thank you. Okay. Well, there being no further discussion, I will now reveal the proxies received prior to the meeting in relation to this resolution, which will now be displayed on the platform. As the Chairman of the meeting -- and I'll just remind people that we'll close these at the end of the meeting so that there's still time to vote. As the Chairman of the meeting, I have been appointed proxy by some shareholders to vote on this resolution. I intend to vote undirected proxies that can be voted on this resolution in favor of Item 2. And please note, once again, under the Corporations Act, this resolution is advisory only and does not bind the directors or the company. I would like to note that there are voting exclusions for this resolution. These exclusions are outlined in detail on Page 2 of the Notice of Meeting and are now displayed on the platform. I know it's quite a thing. I'll put to a poll the resolution that the Remuneration Report of the company for the financial year ended June 30, 2020, as set out in the Directors' Report is adopted. To vote, click one of the voting options as shown on the platform. I'll just give you a moment to make sure you've -- that everybody is comfortable with that. I usually sit here and I've got a little screen that tells me everybody is voting, but unfortunately, in this process, I don't have that. So I'm just going to talk for a second so you've got time to make sure you've got your vote organized. [Voting]

Okay. I'll now move to Item 3, just remembering that if you've missed or want to change something, you can still do that up until the end of the meeting when I'll say that the voting is closed. Item 3 on the agenda is the election of Mr. David Gordon as a Non-Executive Director of nib. Mr. David Gordon was appointed to the Board as an Independent Non-Executive Director of the company in May 2020, pursuant to the constitution, which allows the Board to appoint a director to fill a casual vacancy or appointed Director as an additional director on the board. In accordance with the ASX listing rules and nib's constitution, David retires and, being eligible, offers himself for reelection -- for election as an Independent Non-Executive Director. The Notice of Meeting provides an overview of Mr. Gordon's professional experience, and I will now invite David to address the meeting regarding his election. David?

Thank you, Steve. Good morning, ladies -- good afternoon, I should say, ladies and gentlemen. As the Chairman has mentioned, today, I offer myself for reelection -- for election as an Independent Non-Executive Director to the Board of nib, following my appointment by the Board in May this year. As this is my first nib AGM and the first time that I'm officially speaking to you, I thought I would tell you a little bit about myself over and above what is described in the notice paper. I'm a lawyer by training, having been a solicitor and partner of the firm now known as Herbert Smith Freehills, and my area of practice was mergers and acquisitions, capital raisings, reconstructions and general corporate law. I retired as a partner in the mid-'90s and have since that time advised companies and their boards and acted on companies -- acted on boards, both private and public. Over the last 20 years or so, I have founded and invested in businesses, particularly businesses in -- with a technology, media or telecommunications focus and typically acted as a director or chairman on the boards of those businesses. So I do not come from a health care sector or from the insurance sector. I believe that I bring to the nib Board and, if elected, will continue to bring considerable commercial experience, a growth focus and a perspective on the technology and digital opportunities and challenges that will form a key part of nib's future. I also bring my professional background in corporate law and board experience in governance matters as well as a very clear shareholder focus and results-oriented outlook. I very much enjoyed the short time that I've had on the Board to date and have been highly impressed by the intellect, dedication and innovative thinking of the nib management team. The company has achieved considerable growth and success over a long period. And if I'm elected today, I look forward to working with my fellow directors and the management team to continue that success for its shareholders and members and for its wider stakeholders.

Thank you, David. The directors, with Mr. Gordon abstaining, recommend that you vote in favor of the election of Mr. Gordon as a Non-Executive Director of nib. I'll now answer any questions or comments relating to this resolution from the online platform. Ros, are there any questions?

There are no question, Mr. Chairman.

Thank you. There are no questions. So I will now answer any questions or comments regarding this resolution from the telephone line. Operator, any questions?