nib holdings limited (NHF) Earnings Call Transcript & Summary

Well, good morning, everybody, and thanks for your time today, I know it's precious. And we've got a fairly fulsome agenda, which hopefully, as part of your pack, you'll see. So feel free, of course, to come in and out of today's session as you please and depending upon what is of most interest to you. We try to make the day as interactive and as comprehensive as possible. We're basically seeking to cover our entire business strategy, best encapsulated by our P2P or Payer to Partner mantra. And we're also going to try and drop in as many examples as we can to make things a little bit more real. Because, certainly, a lot of what we aspire to achieve is, well, in our mind, and I should say this modestly, quite visionary. And it's not going to be done overnight. So thanks for joining us. I think when -- there are 2 big ideas influencing our thinking at the moment, which hopefully will come true today through the presentation. So first big idea is even as significant as private health insurance is across Australia and New Zealand and other markets, including China where we play today, it still represents a relatively small value pool within total health care systems across Australia and New Zealand. We see an opportunity for us to play in those additional value pools and I'll go through those shortly. Assuming we have the right capabilities to do that. And so the day will be very much about explaining how we see those additional pools, those adjacent health care pools to private health insurance and the kind of capabilities we're developing. The second big idea that's got us very excited, and has for the past few years, is that the future of health care is very much about prevention over cure, which sounds a bit cheesy, I know. But in this world of data science, we're able to -- well, increasingly, as a society, we're able to predict with uncanny precision, the risk of disease. And with that prediction, how we might best prevent or manage or more precisely treat that disease. And so this is a kind of technology and futuristic thinking that we're trying to bring to the marketplace. It's a main capability, I suppose you could say, in us -- in our ambitions to move beyond private health insurance as recognizing, of course, private health insurance per se will remain the core economic engine of the business for years to come. The second part of that second idea around technology and its application to health care is the increased investment that we're seeing in society in which we hope to be at the vanguard of in digital engagement, with not only our members and travelers, but particularly, our providers. And as part of our, and you'll hear some more about this today, as part of our recognition of the quadruple aims of health care, we see our role in the health care system as important as our members and travelers are, think of them as patients. We also recognize important role providers of health care have in building a better health care system. We very much see our role as an agency role in the health care system, connecting the buyers and sellers of health care and we'll talk a little bit more about that today, particularly around some new opportunities we see with the NDIS. So there are the 2 big ideas driving our thinking. One, that there is a much bigger health care economy there for us to potentially play in. And secondly, that the core capability, which will enable to us to -- that enables us to have the kind of ambitions we have will be around technology, this ability to apply data science to predict disease, readdress disease and connect people in a virtual digital way. It was remiss of me not to start by acknowledging we're presenting today on the lands of the nation of the Awabakal people in Newcastle. Although just across the river is the lands, the traditional lands of the Worimi people. And naturally, we recognize that for eons, they inhabited this land, well they still inhabit these lands, of course, and we repay our respect to their elders, in particular, both past, present and into the future. So there's today's agenda. Look, we want to emphasize that everything we have to say today should be viewed through the prism of our fundamental purpose or mission of improving the health and wellbeing of our members and travelers, and increasingly, improving the health and wellbeing of the populations within which they reside. None of what we have to -- the investments we are making are not in and they are in themselves. They're designed to improve the health outcomes of people in their communities. So I mentioned at the AGM last week, we presented this slide. Look, it's slightly esoteric, but what we'd do today, you can think of those green bubbles as value pools in the health care economies. So just taking Australia as an example, it's about a $200 billion spend. And what we'll do today and explain how we see a role for ourselves in participating in those particular value pools or markets. And the darker green bubbles here, just the kind of capabilities we'll talk about today, including our important ESG responsibilities. We very much believe we, as a company, have a particular profound role to play in improving a lot of societies. Sure, our carbon footprint is important. We'll talk about that further on. Of course, the warming of the planet has profound health implications. But as a business, the potential for us to make the greatest difference is in improving the health and well-being of individual discrete populations and society as a whole. And we'll talk a little bit further on about performance measurements. What are the actual key targets we plan to achieve as part of our overall plans. And within each of the value pools, too, we'll also spend some time in setting out some specific targets for each of those value pools however, aspirational, they may be. The -- just quickly, the carbon, again, we'll go into detail today. At the hub of all of this, call it, the engine or the heart of what we're trying to do is this nation of personalization. And we'll talk to that in a moment. Ed Close will join. Just go back a slide. Thanks, Renea. So just to explain that north point is our traditional PHI market. It's about a $25 billion market. We're looking to, through new product concepts and the kind of investments that we'll talk about today, expand that market and our presence. It's only half of the population in Australia and 1/3 of the population in New Zealand, who actually participate in PHI. So we see real opportunity in our core traditional market. At 11:00 there is -- we recognize the $35 billion or so that Australians spend on health care on out-of-pocket expenses is one way of expressing it. That's investment, that's spending that we currently don't participate in. We have some -- we have many ideas as to how we might. At 1:00 there, claims cost effectiveness is about capturing value by improving claims efficiency, value which can be passed back to our members in the form of lower premiums, which makes us all the more competitive and helps with our momentum in growing our PHI market, but also which can be invested in the form of improved benefits for members, particularly in reducing their out-of-pocket costs, which we know is a real pain point and a source of lapse in our business, but also the health insurers' business. At 9:00, there's the investment we're making in Honeysuckle Health. This is value that Honeysuckle Health will capture by basically keeping people healthier and out of higher cost settings of care, such as hospitals, with the programs they deliver. 3:00, there's more long term, I suppose, in our thinking. This is a world in which government has no option but to turn to the private sector to help it deliver on its own health care programs. You're talking about $130 billion in spending there. So that's just a rough sketch of how we're conceptualizing P2P, the investments we're making in personalization and the discrete value pools that we're searching for opportunity within and beyond PHI. Next slide, please. So look, Ed and Rob, Ed Close, who runs our Australian Residents Health Insurance business. And Rob Hennin, who runs our New Zealand business will jump in as soon as I finish this with some real-life examples of progress we're making. But as I've already touched upon, this idea is not before its time. It's well within we're able to predict risk through data science. So we know that Mohammed, if he has characteristics, biological, psychological, social, genetic, et cetera, we know from algorithms written from literally millions and millions of records that he's at specific risk of diseases 1, 2, 3, 4, 5. And if so, we know from algorithms written from similar data, that the best way to manage or prevent or treat that condition is X, Y, Z. So this is the kind of data science we're seeking to develop and harness with Honeysuckle Health, the key engine there. It speaks to a future though, our -- of one where we can provide individuals with a very personalized risk profile, provide them and their doctors with that risk profile, of course, put that information on a mobile device, including with an electronic health record. We can connect them to a much broader range of providers, not just the providers of sickness, doctors, hospitals, dentists, et cetera, but dietitians, physiotherapies, psychologists, people that can help them maintain good health. And we can help them choose providers based upon performance and give them a genuine informed choice. And as I touched upon earlier, we're as interested in making life easier and more efficient for providers themselves through the investments we're making in virtual health care, the eTriage systems, which help the doctors and clinicians make choices about the best -- help them with diagnostic decisions and decisions around treatment and also enable them to connect with us and their patient more readily, to bulk transact, et cetera. So first story off the rank today is Ed sharing some thoughts on the electronic health record and our plans and the progress we're making thus far in that respect. Thanks, Ed.

Thanks, Mark, and good morning, everybody. So building on what Mark has just talked about with personalization, really, at the heart of our future Payer to Partner experience, I just wanted to bring to life a little bit what that will look like for our members in the future and even currently now in terms of some of the pilots and initiatives that we have out in the marketplace at the moment. So you'll see on this slide, we're really looking to shift both the support we provide when our members are looking to manage their health or when they get sick or injured and we're there to provide financial protection, but really offer that broader spectrum of services and propositions across the entire health care continuum, particularly around when they're being healthy and getting healthy and looking to make those shifts in their behaviors, and how do we start to unlock and develop capability that will support them on that health journey. So you'll see here, when we look at some of the core customer needs, it all is going to be powered through our digital experience. So we are definitely doubling down on the digital-first strategy here and that we powered through our digital assets. And you'll see here, for Jane, we'll be bringing to life what that experience will look like. So we've recently launched, as part of our digital onboarding activity, a digital membership card, so enabling Australian and international health insurance members to tap and go through their phone on Apple and Android. So that's a huge step forward, and we've also got a range of work happening around in-app payments and digital card experience, which we'll talk to a little bit later in the day. So like digital onboarding, we'll also enable our members to understand the state of their health, so where are they currently at. So we're in pilot in market now with a provider called Snug to give many of our members a digital health record in the palm of their own hand. That's integrated with My Health Record. And it brings together, essentially, a holistic view of the snapshot of their health through that digital app. And that's going to be -- over time, we'll integrate those assets into our core nib digital experiences. As part of that onboarding experience, our members will go through a health risk assessment. It'll be quite intuitive and personalized. And then off the back of that information exchange, good health plan will be presented to each individual. That will be personalized and tailored to the life stage, the health risk assessment data and also anything that we already know about that individual through their claims history. We'll then present a range of recommendations. And in partnership with Honeysuckle, using the data science capability, we'll be able to present the next best action or next best opportunity or conversation that, that member should be having both with nib and also our trusted range of providers. As they move through that health care continuum, they might be going through a specific health episode, and they'll be looking -- just -- ask questions, like, "Help me. I'm feeling unwell." So we'll be connecting with a range of eTriage and symptom checker services, and James Barr will talk about some of that a little bit later this morning. And also wanting to know, are they covered for these things, either through health insurance or some of the range of the other products and propositions in the new market space that Mark talked to a little earlier. So we'll bring that to life a little bit over the coming sessions. Following that, they may be presented a recommendation to connect with a health specialist, and we'll be providing that capability through our digital services to find, book, review, rate and connect and actually consult virtually with providers that you'll see here on the screen around the telehealth offering. We've got a number of pilots in the international and the Australian space happening now around telehealth. And then they'll also be able to unlock a health management program or a pharmacy-to-your-door pack that we'll talk to a little bit later as well. Now as they move through the claims and payment experience back in the health insurance domain, there'll be incentives, discounts and offers that help nudge them towards those healthy behaviors and how can you continue to drive member engagement throughout their life stage. And I talked a little bit about the in-app payments experience that we're working closely with the likes of Whitecoat and a number of other providers to get to market shortly. Personalized recommendation, nudges and reminders will continue to be the norm throughout the experience for members. So that's just a quick snapshot of some of the work that we've already got under the way. As I mentioned, some of this is already in market, and much of this under the Payer to Partner program is launching shortly. Next slide, please. So let's put ourselves in Jane's shoes, who's a member of nib, but a very different type of member to what you would traditionally think of an nib member given the door to the nib relationship until recently required an insurance policy, be that health or travel or life to enter a relationship with nib. So let's take Jane, and I'll just walk you through a quick customer journey here to help bring this to life a little bit more. So Janes sees a YouTube ad for nib while she's searching, actually, for well-being app to track of health activity. As she onboards to the concept of a green pass, which we're building at the moment, and we'll be launching to market in the next 6 months. And this membership actually allows Jane to access all of the health services and propositions that nib currently offers, plus many more, but without the requirement to have an insurance policy. So she can access our first-choice provider network. She'd be able to access our wellness activities, our rewards and incentives and our personalized health content. She undergoes a health risk assessment and is presented with a digital health record that I mentioned around the Snug opportunity that we're working with at the moment, and she works through and is presented with a range of recommendations. So this is the good health plan that she's now engaging with. Jane, then, is presented with an opportunity to find and book a virtual consultation with a dermatologist. So as part of her health risk assessment, it was presented that she had some needs around skincare and also dental, but she's going down the skin care treatment plan, and she connects with a trusted dermatologists that we've procured and connected her with via our telehealth and booking services. Jane then moves forward and prevents -- purchases the preventative skin care pack, which we're working on at the moment. It is very close to launching in market. And that preventative skin care pack is now delivered to Jane's door every single month in partnership with some of our pharmacy providers and that delivery to door concept. So you see here, as Jane's life stage is evolving, she's working through a range of different experiences with nib. As her lifestyle changes, she's getting a little bit older and she's nudged towards private health insurance. So previously, Jane hadn't really seen -- had any awareness or understanding around why health insurance might be right for her when she was just 23, but still not really seeing the benefits. But over time, as she builds that relationship with nib, and we start to learn more about her in her life stage, we are nudging her towards a digital cover review, which does present an opportunity via our next best action of a private health insurance offering. Jane then decides that the time is now right to purchase hospital cover, and she adds that onto her green pass membership along with her recurring skin care treatment pack. So hopefully, that just gives you a brief snapshot of what an nib membership experience will look like over the coming months and years. I'll pass across to James, who leads our International Workers and Students business, just to talk a little bit about the international experience.

Thanks, Ed. Good morning, everyone. Look, yes, core to our purpose of personalization is helping our members make informed decisions about their health care, but also connecting them with our health care systems and providers. And to that end, one of the greatest challenges our international members have is navigating the Australian health care system when they arrive and in-country. To that end, we've -- we're investing heavily in 2 core components embedded in our digital app experience, one being our eTriage or symptom checker; and two, being our virtual GP consults. Later this year or early next year, we plan to launch an AI symptom -- AI-powered eTriage symptom checker, which will really help our students navigate through the health care in Australia. So the options will be, after working through a self-paced interview guide, self-care at home, maybe presented to the pharmacy for nonpharmaceutical prescriptions, consult a doctor, called 000 or present at an emergency department. As we progress through into the journey of the GP, we're seeing significant uptake of virtual GP consults within nib. And in partnership with 24/7 Medicare. We've been able to deliver this service to our students and members throughout COVID. And we've had terrific response to this service with high NPS scores. But importantly, what that does is allows our students to book a next available consult or book a time that suits them to have a consultation with a GP from the comfort of their own home. But more importantly, what it allows us to do is build a close relationship with our GPs and build out our health management strategies that support our members. To that end, we see that 5% of our GP consults are for mental health. We've since launched SilverCloud, our digital health -- digital mental health application. We see that 30% of our consults result in pharmaceutical script being issued. So we're working through pharmacy partnerships.

How many consults, virtual consults we had, James?

We've had about 300 to date. And so the NPS is north of 50. The feedback is brilliant, and we're looking at ways that we can round out and get more of our students through that. So we'll be onboarding our seasonal workers on that program in coming months as well. And I'll pass over to Rob Hennin in New Zealand.

[Foreign Language], everyone, [Foreign Language]. So our purpose is, [ sure ], better health for New Zealanders. So we live in New Zealand. And today, if you look at the chart on the left, we risk-stratify our base and we run programs targeted at the highest risk. So we've got about 250,000 members in nib in New Zealand and about 10,000 of them sit in that kind of higher box. So what we do is, by gathering data, by analyzing the data to identify the highest risk conditions, we then actively offer these members our health intervention programs. And so the aim is to address their needs. The aim is to help them stay out-of-hospital and to recover quickly. Today, we target large segments, 10,000 people at a time. But tomorrow, with the help of Honeysuckle Health, our partner, we intend to personalize care and not just keep them out of hospital, but really focus on helping them to achieve the health outcomes that they really want. And at the end of the day, provide each one of them, we hope in the future, and I'm sure Rhod will talk about this later on today with a good health care or a good health management plan. So just to give you a bit of a flavor of what we do in New Zealand, we run a number of programs, cancer care, healthier heart, healthier joints, bowel screening. I'll talk a little bit more about that later in the day when we talk about what we're doing with specific population groups. But we have about 3,000 members who have been part of these programs in New Zealand so far. The programs cost us a couple of hundred thousand dollars a year to run, but they save nearly $1 million in claims cost. And then when you add our hospital contracting on top of that, there are significant benefits to be had. So at the end of the day, at the bottom of the table, we're doing things like immunizations, we're giving people access to virtual GP and direct-to-home pharmacy and also, wellness and well-being programs. Today, it's about big segments. Today, it's about helping them to get access to the health care they need. Tomorrow, it's definitely about personalization and providing them each with an individual good health plan. So Mark, back to you.

Thanks, Rob. Okay. Well, this section was largely about explaining the kind of capabilities and assets and science that we're developing to support our ambitions in going after these -- well, obviously, differentiating ourselves in the marketplace, including our existing PHI marketplace, but also, again, pursuing some of these additional health care value [ pearls ], which I touched upon earlier, and which we'll come to today as we progress. So I'll pause for any questions.

There are no questions via the online platform.

So we have both an online platform and a telephony platform. Okay. Well, absent any questions, let's keep going. So the 12:00 bubble, which I detailed earlier on is the traditional PHI market in Australia and New Zealand, in particular. And as I've just mentioned, our objective here is to differentiate ourselves in that marketplace and not only grow the marketplace, but our share. And it's pretty clear, from what Ed's covered already, is that we see a number of opportunities to attract particularly younger people to membership without necessarily providing with private health insurance initially, and Ed will detail that a bit more. Now over to you, Ed.

Thanks, Mark. Next slide, please. Did you want to touch on this?

Yes. Look, I should have emphasized at the start of the presentation today. These targets were put in place for fiscal '25, recognizing it's only 3 and a bit -- 3.5 years away now, are aspirational. But they're realistic, and we've spent a lot of time in calibrating the numbers. So on the basis that some information is better than none, we thought we'd take the leap today and share some of these aspirations with you and hopefully give you some confidence that we have the assets and the thinking in place for their achievement. Because even that 800,000 Australian members, by fiscal -- the end of fiscal '25, that's a 23% leap on our current membership. So over to you, Ed.

Thanks, Mark. Next slide, please. So I'm just going to step you through the road map towards 800,000 policyholders for the Australian health insurance business. And just to orient you around the slide, because there's a little bit of detail on it. You'll see on the left-hand side, just the bar graph there that's showing the buildup to 800,000 by FY '25. That's made up of 4 core components. The nib brand in dark blue there, you see is obviously the core part of the business and very much remains fundamental to our growth aspirations and ongoing investment and innovation will continue to drive policyholder growth in that regard, and I'll touch on some of those opportunities in a second. You see P2P, which is only a small sliver there in -- but a very meaningful contribution in '25. And we'll talk a little bit how value proposition within Payer to Partner will unlock both nib and broader portfolio growth across the group. GU Health there in the light blue is, again, a key contributor to our 800,000 target. It has been an outstanding acquisition since we took on that business in 2017 and continues to go to strength to strength as one of the flagship players in the corporate health space. And then you'll see the -- sort of the light green on the top box there is our white label partners and opportunistic M&A as we continue to be active in that market. So that's just showing you the buildup of the trajectory towards 800,000. And then we've laid over -- to arrive at that number, we work through a range of assumptions, market conditions, the Payer to Partner proposition and also our marketing and distribution tactics to continue to push us forward and overachieve in terms of policyholder growth, So some of those assumptions, so we are very active in the white label in the M&A space. We're making an assumption, and we also have some very, very deep relationships with both existing and new white label partners. And as we look around those strategic partnerships, we continue to look for trusted brands that have a strong customer base and marketing presence in the Australian marketplace, and we look to then find where there's great synergies around all the expertise and capability we bring as a leading health insurer and then also the best of what they can bring in the Australian marketplace as well. And that's evidenced by our recent announcement with ING as alongside our existing relationships with Qantas and the Suncorp Group. So we're very active in that space. A big focus around future growth is around reducing our fund lapse rates. So we recognize that we've got strong outperformance in terms of our sales targets, and we continue to -- through our multi-brand and multi distribution strategy, which I'll talk to shortly, overachieve in terms of our sales targets. But a big area of opportunity for us is around member engagement and benefits back to members to ensure that our retention rate can lift towards industry. And we've got a lot of activity initiatives that are progressing us nicely towards a strong improvement in our retention rate. So that, coupled with that multi-brand sales strategy will be fundamental to driving growth. Market conditions. So our forward-looking view around this is around the heightened health awareness and propensity for PHI post COVID-19. We've seen PHI really stand up throughout COVID as a strong value proposition, particularly as pressure builds around the public health system, the value proposition is very much increasing, but also naturally going through a health pandemic has definitely shone a light on the value of private health insurance. And also coupled with that is improving affordability from a premium increase perspective. So a lot of focus around that, and we think market conditions will continue to be buoyant from a growth perspective. Affordability does remain a challenge. We're very cognizant of that. A lot of the work we're doing around our gap arrangements and our provider networks as well as Payer to Partner will look to really put affordability in the spotlight and ensure that we are -- whatever value that we can unlock with -- that we will look to redistribute in terms of affordable premium increases and to keep -- balance that fund's sustainability and also member affordability. COVID-normal is what we're calling it, we are expecting a return to more normal levels of claims profile in terms of both hospital and ancillary treatment. Particularly coming out of lockdowns, we're expecting some reversal to more normal trends there as well in towards FY '25. Talked a bit about P2P earlier, obviously, and we'll spend a lot more time around the new markets piece shortly. But a combination of things we believe will start to become a differentiator in the private health insurance base for the Australian business. So fundamental to the success of the group Payer to Partner strategy is ensuring that we -- the relationships that we unlock in the new markets, we can nurture towards a private health insurance relationship. And I talked about the Jane example before around we are very cognizant of the fact that when all health insurers go-to-market that we are -- have a participation right around 40% to 50%. And so therefore, a large chunk of the population in Australia aren't either ready to purchase private health insurance for a range of reasons or may not see a clear value exchange based on where they're at. So if we can look to acquire at a sustainable rate, a large volume of nonprivate health insurance members, we can start and nurture through a digital experience using that personalization capability. We'll bring them into the Australian health insurance business over time when they're ready and when we can proactively engage.

You haven't said freemium yet.

I haven't mentioned freemium yet. So we'll get to that a little bit later in terms of -- around how we're looking at this membership model of the future, which basically opens up a range of doors to enter the brand, as I talked about. If we reflect on the Jane experience where she became a member of nib in a very different context and at a very different life stage than when she would typically engage with a health insurer. From a marketing and distribution perspective, a lot of ongoing acquisition investment. We are very, very positive around the average lifetime value of a policy within the Australian health insurance business, and we'll continue to invest from both the brand, creative and media perspective, not only in nib brand, also GU and really supporting our strategic white label partners in ING, Qantas and Suncorp around how they go-to-market to create a unique and differentiated private health insurance value proposition. Affiliate marketing and referral capability is a big area of opportunity for us. And what we're looking to do here and what we've already started work on is taking our sort of Platform as a Service play for private health insurance and the learnings that we've got out of our white label relationships and partnering again with really big brands and big customer bases across the Australian marketplace, who may not want to look at a full stack health insurance offering, but see the benefits of an affiliate marketing strategy, which creates benefits back to their customers as well as private health insurance over at nib. So a lot of work happening in that space and a lot of exciting brands on the horizon there. Voluntary corporate remains fundamental to our success in partnership with GU, and we're doing a lot of work there with a lot of big corporate entities around unlocking the value of that large and growing segment. I talked about white label expansion a little earlier and a lot of ongoing investment around out of pockets and retention. So yes, we will continue to grow from a sales perspective and continue to go-to-market with this multi-branded multi distribution strategy, but addressing some of the remediatory requirements of out-of-pockets and retentions is really the big opportunity to accelerate growth. Just move into the next slide, please. So I thought it would be worthwhile just pausing and reflecting around how does the Australian health insurance business actually go to market. Because as you can see on the slide here, we have definitely evolved over the years from the traditional nib green brand, as we call it internally, and largely playing on that left-hand side around direct-to-consumer through our organic channels. And over time, quite deliberately, with that challenger mindset, have been switching on a range of different channels and brands to complement the core business within the direct-to-consumer business. So just quickly across the slide, you'll see there the nib, D2C and broker propositions complement each other nicely from an age and scale and geographic segmentation perspective, and the go-to-market complementary and really talk to the core value preparation around private health insurance expertise, value for money and digital innovation alongside our Payer to Partner pieces. You'll see GU Health there. I talked about that earlier, largely skewing in that 20 to 50-year-old range. Couples and families are very much fundamental to the success. New South Wales and WA are really the flagship locations and being that corporate specialist in the premium brand is working quite well. Qantas, really attractive from a loyalty and Qantas Frequent Flyer points has had a difficult period, obviously, through the travel restrictions impacted via COVID, but we're seeing a lot of growth return quite quickly to that brand, which has been encouraging, particularly in the last few months as lockdowns ease and borders reopen. So a lot of exciting times ahead for Qantas. Suncorp, Apia and AAMI under the Suncorp brand, really strong in terms of the holistic insurance proposition, and I talked about ING earlier with a digital-first and skewing to that younger demographic. So an exciting partnership that we've just forged. And Priceline is one that we're deep in terms of a co-branded affiliate partnership, and we're currently going to market with them using both the nib and Priceline brands to -- into their Sister Club membership of AUD 9 million, so an exciting opportunity there that we're working with Priceline. So I just thought it would be worth pausing, reflecting and just demonstrating the breadth depth of how we go-to-market for the Australian business.

I think the 3 big takeouts -- well, there are many takeouts, of course, but the 3 big ones for me in thinking about our high and our growth ambitions is firstly, while nobody celebrates COVID-19, for a moment, it has heightened awareness in society of the risk of disease and the need for protection. That's a real tailwind for us. Secondly, that the value proposition as it is and has been for, well, at least in our business for 70 years, it's just not cutting muster with so many consumers, particularly younger people. So we need to enhance the value proposition. My kids will take out a membership of nib, not because of the financial protection, but because they believe that membership is going to help them and their families maintain good health. And thirdly, that the investment decision around organic growth is still very powerful. Basically the lifetime value of a policyholder, by our estimates, is double the cost of acquisition. So our -- we can invest in organic growth with some confidence. The friction, if you like, that's only ever been exerted -- well, existed in organic growth is the artificial regulatory concern about having -- spending too much on organic growth and therefore, having a high MAR, which doesn't look attractive in the eyes of regulators and others. So we approach this growth target with considerable confidence. It will require investment. It will require -- well, not only in terms of marketing and distribution, as Ed has outlined, but also in terms of developing the capabilities and assets and value proposition that we're talking about today. Over to you, James.

Thanks, Mark. International students, we've set ourselves the ambitious target of 220,000 members by the end of FY '25, 190,000 of those bound for Australia and 30,000 of those for New Zealand. You'll see from the chart, the industry -- or the market has taken quite a knock from COVID, so with visas in-country down around 30% year-on-year from 2021. We see the outlook there. We're very optimistic of the outlook. Education in Australia is in high demand. We see the system return to some level of normal by the end of FY '23 and then continue to grow at historical levels of circa 10%. We also see that this industry is on the precipice of change, and we see the potential for deregulation and possibility of a risk rated marketplace similar to our workers' business. I think what that will do will unlock value in the product for our members, but also result in material product innovation across the industry and competition as a result. We think claims will stabilize, but there will be probably a new normal high as our students have become used to claiming on their product. We think our P2P value proposition is our clear differentiation in market, but we see our distribution is really key to this. And most of our penetration today has come through the education, agent channel in offshore markets. We see that continuing, particularly in China, off the back of our JV in China, [ Ahua ] Health. Tough one to pronounce. So we see -- so we're very optimistic around student return. We're seeing some level of return by the end of this calendar year. There's about 1,000 students per fortnight across New South Wales, Victoria and South Australia due to arrive, albeit they will be returning students with first priority, but signs are looking good for return. We should know more by quarter 3 this year. Next slide, please. The workers' business, ourselves, a target for 100,000 workers in Australia. This business is doing tremendously well at the moment. And albeit the stock has come off of the industry, we've grown quite well during this period, largely the result of our preferred provider relationship with a seasonal worker program and Pacific labor facility. So we've seen -- there's currently 16,000 of these members that have been able to enter the country during COVID. That will skip up to 23,000 by the end of March next year. But there's some 55,000 strong ready workers from Pacific nations ready to come and work in rural areas in Australia. We also see that there's strong speculation and commentary in the marketplace around strong returns on skilled migration. So similar to the students' business, we see the workers' business rebounding by the end of '23, but growing at a much faster rate. We see demand in the marketplace for -- across hospitality chefs. And so we think that skilled migration in Australia will be a significant uptick in future years. The market conditions will largely remain the same, albeit there are some new visas in market, potentially -- well, in particular, the new agricultural Visa, which is focused on meat workers in the early part of next year. We think the value proposition will be very similar to students, where we focus on our P2P and distribution, really, is a little bit different, but we'll be focused on strategic partnerships, government agencies and the immigration agent network. Over to you, Rob.

Thank you, James. The New Zealand business is an exciting business. It's been a challenger in the marketplace since we launched here in 2012. And if you remember back to those days, we bought a portfolio that was about 78,000 policies and declining, in fact, declining for a long time. And then it took us a couple of years, but we returned that portfolio to growth. And we've got about 120,000 policies today, and we're very confident that the plans we've got in place will allow us to expand our member base across all channels to about 150,000 by 2025. And so that's the blue bar that you see there in 2025. And then on top of that, and I'll talk about that a little bit later, but we believe that we can add further membership growth through our Maori-Iwi strategy and also through living benefits. When you look at the context that we're working in, in New Zealand. We've weathered that COVID storm pretty well. In fact, if anything, as Mark said, the value proposition for private health insurance has been increased because the demands on the Republic system have been quite severe. And then also, just people have become much more conscious about their own health and well-being. So we've got a fairly stable economy. We've got a growing consumer interest in their own health. And we've got, at nib, as you're seeing through the strategy, some really good strategies and some really exciting platforms that will allow us to increase value to our membership. So from our point of view, the P2P transformation is absolutely key. We think it's a key differentiator. And what we're doing is really seeking to provide greater access, greater personalization of treatments and better care for our members. And so we will move from being primarily a funder today, but we're moving towards being a true health partner. I'd just like to go to the next slide and just talk a little bit about living benefits. And then I'll give you just a little bit of a rationale about the acquisition that we announced yesterday. So our purpose is your better health, and it's going to be delivered in New Zealand by giving members access to a suite of products. First of all and primarily, health, but also living benefits, insurance and also live products and services. And so we'll have an expanded product suite. We'll have a more innovative product suite, but we'll also have greater access to personalized treatment. And we think that, that really does give us a key point of differentiation. The New Zealand market, the living benefits insurance marketplace, which is life, it's IP, it's trauma, critical illness, TPD. It's about twice the size of the health market here. And the products are seen as complementary to our health insurance products. In fact, often, the products are certainly considered together. And during the advice process, people make a decision, health or living benefits. And sometimes, in fact, quite often, they're actually bundled together. So just the same way that you might buy a burger with fries, people buy health with one of the living benefits products. So our P2P strategy is all about offering a broader range of relevant product with greater access to personalized care plans. And we think that this is a really compelling strategy for the market. So underpinning all of this is our relationship with Honeysuckle Health. So we think, again, that being able to provide health navigation, wellness, health management programs that are tailored to the individual will just make us a very different proposition in market through the traditional health and living benefits players. So when you look at us over the next few years, what you'll see is we'll offer, across all channels, more innovative products. Products that are packaged with health and well-being programs are designed to improve the health of individuals. And you'll see that the health management programs, again, are underpinned by the work that Honeysuckle Health has just begun to do for us today, tailored to be much more cost-effective and much more relevant. And at the end of the day, we'll be harnessing the capability to have better disease prediction, to have better prevention and to have better management programs and access for our members. So we think it's a very key and exciting proposition. If you could just go to the next slide, please. I just wanted to just talk a little bit about the acquisition and where does it fit. Because we are -- and you expect us to be pretty excited about being able to announce a broader range of products. So a foundation pillar of our strategy has been to add to our health products and our health management products, the living benefits product range. I mean, Mark has talked about this over the years, and I certainly have. Because we see that this could add considerable extra value to our members. And I'd just like to talk a little bit about that. So you'll see from our announcement yesterday, we will purchase, subject to regulatory approval, Kiwi Insurance. So that's a business currently owned by the Kiwi Group Holdings, which is in its table with things like Kiwi Wealth and, of course, Kiwi Bank. And we're very excited about the fact that we'll be entering a long-term partnership with Kiwi Bank to offer living benefits and help products to Kiwi Bank customers. So there's a really -- as we've been through this process throughout this year, getting to know each other, you know the process better than I do, finding out whether the business fits, assessing the value of the business. One of the things that we've been particularly keen on is the alignment between the 2 businesses. And if you think of it from a value point of view and a mission point of view, we think that there's really strong alignment. Kiwi Bank is about making Kiwis better off and they focus particularly on financial well-being. But increasingly, n these kind of economically challenged and COVID-challenged times. They are also putting their mind to how do they improve the overall well-being of their customers. And of course, that fits specifically with nib's better health strategy about being -- that personalized well-being. So we feel very good about the fit between the 2 companies. Kiwi Bank will refer customers to nib for life and living benefits needs. And we obviously get the opportunity to market back to what is a really significant base nib health products. And then we also -- we bought the company. So the wonderful thing is this company comes with a talented group of people and immediate product suite, which we intend to enhance and improve. But it will give us opportunities to move, at some stage, past the bank product offering into group. They already have a group product. And we think the exciting opportunity is to expand even further into direct-to-consumer living benefits products. So a very exciting opportunity for us all around. Thank you, Mark. I'll just hand back to you.

Okay. Thanks, Rob. And I know we have some questions. Just before we get a question, just some -- just general observations from me. With international workers and students, as James mentioned, workers is performing very well. Its growth profile is good. And as James mentioned, the demand for skilled migrants -- well, skilled and unskilled migrants, I think, will burgeon over the course of the next few years. Neither business has been -- it's been disrupted by COVID-19 but it hasn't -- neither business has been structurally disrupted by COVID-19. Workers will come back. Students will come back. Some question as to whether or not as many will come back, given our slowness in opening borders to foreign students, but the growth profile will be good. It will -- the loss ratio will return to normal. The investment we're making in P2P will help normalize that loss ratio to levels that we have accustomed to. And of course, pricing will also have a role to play there, and James mentioned the fact that we're hopeful of being able to risk rate in students just as we do in workers in the near future. And hopefully, through P2P, we'll present a differentiated offering to both international students and workers. And I suppose the guts of the Kiwi Life acquisition is that we think these businesses are symbiotic, that in combination, we will sell both -- will we sell more health insurance and life insurance and that the capabilities we're developing around P2P will add value to those businesses as well. Okay. So we have some questions. Renea, are you reading the questions?

Yes, Mark, so the first question is from Sean Laaman from Morgan Stanley in regards to GP telehealth consults and e-scripts? Is there anything you can tell us with respect to the rate of GP telehealth consults, the level of e-scripts with such consults and how many of such e-scripts are filled virtually? Secondly, how do you think this may improve medication adherence and ultimately, costly disease progression?

So we're only doing telehealth consultations at this point within our students and workers business. So I think, James, you mentioned a number that is sort of...

Yes, so today. So we went live in about July last year, and there's been around 300 consults. There's been a mix of virtual, so video-based consults and telephonic consults. The -- we've been cautious to roll it out just to measure the impact of making the service more available. But it seems that the cohort that have rolled it out aren't claiming any greater rate than they otherwise would. The challenge you mentioned in e-scripts, the challenge we have with international cohort with e-scripts as they require an individual health identifier to make that process seamless. So that will be the next area of focus for us is how do we enroll our customers, get them on board with IHI, so they're recognized through the program for e-script delivery. But pharmaceutical delivery and delivery to your door is paramount for this cohort, and it's high on the agenda.

The next question is from [ Emma Maslin ]...

Rob -- I'll just see if -- Rob, did you have a comment to make on pharma in New Zealand?

Look, while it's still small, direct-to-consumer pharmacy is -- spurred by COVID growing dramatically. We have a partnership with ZOOM Pharmacy, and they've just been significantly taken equity from the Warehouse Group. I mean, so you can just see that, that -- this area, and we've got a partnership with ZOOM and also with Teams in terms of virtual GP. It's just going to blossom over the next few years.

Yes. So certainly, virtual consultation and home-delivered -- automated home-delivered pharma is a big part of our P2P technologically -- technological platform and infrastructure. And so you can expect, over the course of the next couple of years, we'll be investing heavily in both. In terms of virtual consultation, we'll probably -- our thinking is we need to be Switzerland, that consumers will make their own decision about what platform to use, just like they do ZOOM or Microsoft or Skype. And there's a whole potential, influence of plans to have Australian people, at least, nominated GP, what's called voluntary patient registration. We think that particular policy initiative will have implications for how virtual consultation and scripts are designed. So sorry, Renea.

So the next question is from [ Emma Maslin ]. She mentions the green pass that will allow Jane to access preferred providers that nib policy holders usually access and asks how will this happen.

Yes, I can share a little bit of detail about that. So the green pass membership is -- or a freemium membership, which will either be a low-cost or no-cost way to access nib's products and services without an insurance policy. So essentially, what that experience would look like is that Jane, without a health insurance policy could -- will be -- will receive a digital card that she can connect to the phone, and then she can access the range of our first choice providers. So dental, optical, physio, and as we build out a broader range of health care providers, access that network and receive the discounted rates that our insured members currently receive. So that's really how the benefit will work. So we'll still be able to engage with all of our digital tools and services to help find, book and then actually, in person, present or as telehealth capabilities, which is on virtually consult. We won't be paying a benefit per se on that. But by, I guess, connecting and allowing Jane to access those providers, that's how the benefit will start to unlock for those freemium green pass members.

Yes. So the same experience as for a fully-fledged members, except that we won't pay -- make a contribution towards the fee. They'll get a discounted fee. They may even be able to use reward points. They may even be able to use, "buy now pay later," financing. So -- but hopefully, as Ed has outlined in the forums at time, as they become acquainted with nib and enjoy their membership when circumstances warrant, they'll look to buy a private health insurance to complement that membership.

Next question is from [ Jon ] from Crédit Suisse. How do providers feel about being rated? You mentioned you triage patients partly based on scores.

Well, we've been at this question for some time through our investment in Whitecoat. Some providers don't like it, others do. That's generally correlated with the ratings of their performance. I think, ultimately, consumers win the day here, that this whole area of us reporting patient-reported experience measures as we have -- we do already with Whitecoat. And patient-reported outcome measures will take hold, but it's going to take some time. And consistent with the [ country's full ] aim, we're going have to be sensitive and cognizant of provider concerns to make sure that as this transparency is developed for consumers, that everyone is on board with it. Sorry, Ed, were you trying to...

No, I think the only point I'd add is just that collaboration with the providers is going to be key to ensuring that ultimately, patients and members get the benefit of that increased transparency around reported outcomes and reported experiences. So it's a slow -- there's a number of steps that we'll take working closely with providers to start sharing that data and measuring internally before we start to surface that with members. So a big part of what we're doing within Payer to Partner puts providers very much alongside our members as a group that we want to work closely with, I suppose, the only comment I'd add there.

Yes. As we move to create more and more of these tighter networks, if you like, for want of a better description, their willingness to share their performance results and health outcomes will be part of the deal.

The next question is from [ Maurice ] [indiscernible] from Perpetual. With the personalization health care approach, what percentage of your members have used this/experienced this approach?

Yes. So in terms of where we're at, it's still quite early days. So less than 5% of our members have currently gone through some of the early pilot concepts that I talked to a little about early, so the electronic health record initiative in partnership with Snug is only a matter of weeks in market. Our first nonprivate health insurance health treatment pack, which is a pregnancy -- a noninsurance pregnancy solution, also launched a number of weeks ago. So as you'd expect, given we're very early stages in our Payer to Partner initiative delivery, still gaining traction with the existing member base, but building capability and unlocking capability as we go. So an important first step, as I mentioned, and we'll talk about this in the new market section is around this -- the first nonprivate health insurance product that we launched successfully and now storing that member record in our CRM and has generated our first noninsurance revenue dollar. So important milestones as we tread towards our longer-term 2025 ambition. We're very encouraged by the early signs despite the early tenure of some of these propositions.

Yes. Well, let's talk about the deliverables in the hands of the consumer. The electronic health record is in pilot with Snug and how many participation -- participants in the pilot?

So we're looking at 1,000.

So 1,000 participates in the pilot. The personalized good health plan, which takes the individual's risk profile based upon a health risk assessment and produces a good health plan bespoke to their needs, we're close to pilot?

Close to pilot.

Close to pilot. That's really just a survey. And from that survey information and applying the algorithms which Honeysuckle Health are writing, providing that personalized health record, their ability to access providers virtually were the only real progress we made so far, although this will accelerate, as James mentioned, is in workers and students. Their ability to access a preferred provider network is already well established and is growing, particularly in relation to specialists, we've had such networks in place for dentists and optometrists, et cetera, for some time. We now have a network in place for orthopedic surgeons called our Clinical Partners program. So that will evolve fairly quickly from here. The ability to provide personalized content is in pilot. We already have a content platform called the Check-Up, which is already very successful. What stats do we have around that, Ed?

400,000 engagements per month.

Yes. So the deliverables in the hands of -- and of course, at a population level in New Zealand with Ngati Whatua Orakei, we have gone through the process. Oh, and of course, the other big deliverable for consumers is actually then providing them with health management programs relevant to their disease profile through Honeysuckle Health, and Rob will talk more about that later. I'm just going to mention the entire gamut of interventions or support for consumers at a population level, we are well advanced with -- in New Zealand with Ngati Whatua, but we'll talk about Ngati Whatua a bit further on, too, because population health is critical to our ambitions.

The next question is coming from Sid from JPMorgan. The first one is around the green pass. Is there any similar engagement program overseas that people pay for? Or do they rely on WebMD/Google? Can you charge for this? Will it self-fund itself? Or is it a loss leader to get people engaged with nib?

Yes. So a couple of quick points on the green pass. Yes, we've been looking at some examples that aren't identical, but there's some similar business models globally that we're taking some learnings from, particularly in that wellness and engagement layer around -- and maintain the health and well-being profile of individuals. So taking a lot of those learnings, we spent a lot of time internally and with external consultants really distilling what are those core propositions that we want to take to market and how do we unlock the value of the products and services we currently offer and disconnect this concept of policy centricity and the shift towards member centricity. So the first point around -- that's the business model. We are taking some learnings there. From a price point and value exchange perspective, they are all things that we're in the process of testing, what is the optimal price point, everything from freemium through to low value through to a recurring monthly subscription arrangement are all being explored. And we'll work out where that sweet spot is around what we believe is a reasonable value exchange. We do want it to be sustainable in its own right in terms of how that green pass relationship exists since it's alongside private health insurance. But the true value unlock with these sort of where we're looking to broaden the top of the funnel and engage with many more Australians and New Zealanders and international students and workers is around taking them in on a low-value, low-cost relationship at a very low cost per acquisition and nurturing them towards a range of these paid services offering. So yes, insurance will be one paid service offering, but we'll talk shortly about health treatment packs and health management programs, as Mark mentioned. There will also be paid service offerings that sit inside the ecosystem. So if you can sort of get comfortable with the fact that it will be a really broad funnel of a whole range of individuals engaging with our freemium services or our low-cost services. And as their needs change and as we learn more using the data science capability, we will surface up what is that next best proposition that makes sense to Jane, who is 23 and doesn't need health insurance at this point. So hopefully, that answers just a little bit around...

So Sid, I suppose there are similar programs globally, and I'm hugely familiar with what's happening around the world in private health insurance, at least. You can think about the American commercial markets, 70% of which is now self-insured. So really, the main carriers are providing health management around the self-insurance for the corporation. You can think Vitality and its efforts globally. But what we're attempting here with the freemium offer is quite novel. I'm not familiar at all with anyone else globally doing something that we're attempting to do. So it's right out there in terms of our Red Queen Racing approach to the marketplace. And hopefully, it succeeds. But it's -- as I say, it's quite experimental and -- but doing more of the same, those -- half the Australian population didn't buy private health insurance yesterday, they're not buying it today and they're not going to buy it tomorrow unless we come to the market with some side costs.

Yes. And I think one of the thematics that we look beyond the industry is important if you look towards sort of banking or other sectors around capturing a disproportionate share of the younger demographic is obviously inherent to our PHI ambitions, but also our Payer to Partner ambition. So this freemium concept and also recognizing that the $30 billion out-of-pocket value pool is very real, and people are dipping into their own savings and funding to support their health treatment needs. So you are seeing the emergence of a range of digital health care providers today both globally in the U.S., U.K., but also here in Australia, we're moving quite quickly. And it comes back a little bit to the telehealth and the pharmacy to the door capability that was talked about earlier and how does that digital experience stitch together to create a really clear personalized treatment plan for these individuals. So that's an area that we'll be doubling down on.

Yes. And of course, the marginal cost of adding a freemium green pass member is next to 0. Renea?

The second question from Sid is, are all distribution channels equally profitable?

All of them are profitable in their own right. Yes, profitability does differ by brand and channel. But back to the lifetime value piece that we talked about earlier, we do a lot of work around both the acquisition cost of each of those policies for each of those brands and channels. And absolutely, they are all profitable in their own right, but notwithstanding that, nib organic channel is definitely very much core to our future growth. Obviously, owning those assets is important and the Payer to Partner differentiator becomes our ability to innovate beyond just the core product piece. So if you look to nib and how we then differentiate from a Qantas proposition, which is compelling in its own right around loyalty or if it's a Suncorp proposition around a holistic insurance offering, each of them stand on their own 2 feet in terms of value proposition, but importantly, growth aspirations and profitability.

The next question is from Doron from Credit Suisse. He makes a comment that the growth strategy looks very sensible, but targets in M&A and white label look outsized versus the core nib brand. The question is, are you too relied on acquisitions and partnerships versus growth in the core? And could you share what some of the verticals of some of those partnerships could be going forward?

I don't -- I definitely don't think that we've undervalued the role of both the nib organic growth and also the role of white label. I guess core to our strategy is ensuring that we're adequately investing across each of those brands and distribution channels. So we're very confident that, that 800,000 target is achievable. The composition, yes, there may be some fluidity there in around what the buildup will look like, particularly if you look at corporate health and just how well we're traveling there with both GU and nib brands. So we'll continue to scan the market for big brands that have a trusted presence in the market that has synergies with health insurance. We're not going to shy away from us as -- given our 10% market share overall, we've definitely got a lot more to gain in terms of going down that path. And I guess that is evidenced through the relationships that we've acquired and the affiliate partnership that we're building quite quickly with Priceline. So yes, it will be fundamental to the strategy ongoing. It doesn't look outweighted. No, we don't believe so. The Payer to Partner piece is where we think the true value unlock. These things are always difficult in the early stages to try and quantify what the nurture benefit looks like in the private health insurance. So we think there's some upside there. And with M&A, we're continually scanning and engaging a range of insurers and sort of deeply thinking about proactive opportunity there.

Yes. I think that's a good point there, just looking at the graph again. In my own mind, I've attributed nothing to M&A within that growth area, which is not to say that there might be some, but as you know, it's tough. And our approach to M&A has been purely opportunistic. If something comes on the market, we'll have a look at it.

The next question comes from Gerardo from Barrenjoey. There's actually three questions in relation to overseas student health cover. Firstly, we talk about the possibility of market deregulation. Can you talk to what potential deregulation there would be and what the impact to nib would be? Secondly, what sort of product innovation do you see in the market? And the final question is under these aspirational targets, where do you see margins going from the current levels?

Yes. So in terms of deregulation, there's -- all health insurers who play in the OSHC market sign up to the deed, which points back to the Private Health Insurance Act. Under the deed, it's a community-rated product. It's a young cohort. Community rating doesn't make a lot of sense in that regard. It's mandated product design. So the only real differentiator in the marketplace is price. So under the discussion with the Department of Health, there is some reform happening at the industry level. It's early days. The deed is set to expire June 30 next year. So we expect there will be an appetite amongst insurers to look to the international workers insurance business as a prototype of what the student market could look like. And to -- I guess the major advantage is that from an insurance point of view, we'll be able to price based on risk. So in this marketplace, risk differs greatly by country of origin significantly. And there's a heavy reliance on Chinese students and somewhat Indian students to subsidize different cohorts to the market. So I suspect that deregulating the ability to risk rate will allow us to price appropriately, but also maintain and manage margins for some of those more high-risk marketplaces.

Yes. I think that's a key point. Risk rating in students is -- makes a lot of sense. It's difficult to understand why premiums are community rated amongst students. There is no risk equalization, but also I expect we'll be able to more -- we'll be able to price based on risk and with that ability to secure the loss ratio targets we aspire to.

The next question is from Doron from Credit Suisse. How comfortable are health care providers with sharing data on treating patients and being measured on performance as one aspect of how you recommend them to your customers?

It's definitely sort of probably ties back a little bit to the reviews and ratings comment earlier. It's definitely going to be a collaborative approach with providers. So we have our own provider strategy and engagement plan around working through with a range of different networking solutions. So we're in that market now with a program called Clinical Partners working with a range of leading orthopedic surgeons. That relationship has allowed us to start to share data far more seamlessly between provider and patient outcomes and our own member data. And there's been -- definitely been a willingness there. So it really is this broader shift towards value-based health care around how can we look at a bundled offering that creates this willingness to share data, allows transparency for the member. And we've seen some fantastic evidence of that with a really strong provider and member NPS scores coming out of that Clinical Partners program. So that's probably one -- just one example of where we're currently working far more closely with providers than we have historically, and we're continuing to do that. So we're working on an anesthetics out-of-pocket opportunity at the moment, and we'll continue to take these modality-based targeted gap schemes that ensure that there's a mutual benefit between member provider and funder.

Yes. So look, this whole transition away from volume-based provider payments to value-based partner/provider payments is one we'll cover a bit further on, particularly in Honeysuckle Health section of today's presentation.

And the final question from the online platform comes from Nigel Pittaway from Citi. How much of the aspirational growth is expected to come from acquisitions? And how much will be growth in system versus taking market share from others?

Well, also, Nigel, as I mentioned in my own reckoning, at least, I know we characterized it as M&A and white-label partners. But in my own reckoning, that 800,000 includes very little, if any, M&A. So anything we're able to pick up, if it comes our way, will be a bonus. Whether or not APRA's efforts in promoting industry consolidation make a difference over the course of the next few years, well, only time would tell. Although, as I've said many, many times to investors, I think ultimately, the story of industry consolidation in Australia or in New Zealand, for that matter, will be one of mobile consolidation rather than bottom-up domestic consolidation. Not that there won't be any bottom-up domestic consolidation, I just don't see that as the tour de force. The other question -- what's the other part of the question?

Growth in the system.

Yes. Look, I see the system continuing to grow slowly. As I mentioned earlier, I think COVID-19 has been positive for system growth. But I don't expect it to be anywhere near the 70% level of participation that we enjoyed prior to -- [ got with them ], Medibank back in 1973 without fundamentally changing up the value proposition in a way we have described tomorrow and creating pathways, if you like, for younger people to become -- participate in PHI through the green pass and other offerings that we will have out in the marketplace, which we'll talk to in more detail after the -- have we a 15-minute break coming up? Time's up? No?

We'll just -- Mark, we'll just check if there's any questions from the teleconference as well.

We do have phone questions. [Operator Instructions] Our first question comes from Matt Dunger from Bank of America.

Just on the personalization, what impact do you think that the digital shift will have on claims? And is that taken into account in your 83% to 84% claims target?

Yes. It's difficult to predict the future. But there's some research and evidence starting to emerge from around the world because, clearly, COVID-19 has accelerated this kind of activity. On one hand, you would expect -- look, if we're successful with our P2P ambitions and digital engagement is just so intrinsic to that, it will be easier to manage the loss ratio, claims will be more efficient, consultations will be more efficient, keeping people healthier will mean we have more leftover dollar in premium to invest in price competitiveness and better products. On the other hand, there could be some perversities. For example, there's some evidence in the U.S.A. that those who had their first consultation virtually are much more likely to have a second consultation or diagnostic treatment, X-rays, pathology and whatnot. So time would tell. I suppose we just -- we start from the position that, look, if we can build capability on products and services, which more precisely keep our members healthy, only good can flow from that. That's our purpose.

So no impact expected in the current expectations for the claims ratios, Mark?

No. I don't think so. I think into the future, claims efficiency, if I can just use that broad description to describe mitigating unwarranted care and low-value care, mitigating fraud and upcoding and other forms of claims leakage, minimizing overservicing that all of those factors should be supported by the kind of approach we're taking and the investments we're making. Certainly, the investment we're making in P2P will have impacts on our running expenses over the course of the next 3 years. But in terms of actual claims experience and managing the loss ratio, everything looks positive.

Just to build on that. We are currently in market with 2 digital health management programs right now that we have long-term ambitions will improve cost containment. So a mental health solution in partnership with Honeysuckle Health and SilverCloud that we're now testing in market with Australian and international residents. That's early days, but we're seeing some good take-up there that looks to intervene much earlier through both digital and telephonic needs around health -- around mental health with a long-term goal of improved health outcomes and hospital avoidance and a digital physiotherapy solution that we've also launched to market in partnership with Honeysuckle Health and an organization called Limber, that's a musculoskeletal digital program that is, again, looking at joint pain and musculoskeletal issues with the intention to intervene early and put a personalized treatment plan in front of these individuals to put them on a path to better health and importantly, help improve health outcomes. But we are also hopeful that there will be some hospital avoidance there as they flow through, but early days.

One thing is for certain, whether it be physical, analog or digital, the kind of investment that we and others make in what is essentially health risk management will rely upon precision. Whenever you make these investments, you need to make sure that they're properly targeted. And because if you don't, you end up spending a lot of -- you're spending a lot of money on a lot of people who aren't really that much at risk and you never get the type of return on invested capital or control of the loss ratio that you hope for. So I was ahead of me, so the break is not until 11:00. So unless there are any other questions in this particular part of the value pool, which has been the PHI chart...

We have three further questions on the phone.

Okay. Well, look, this is our core business. So we'll stick with the questions on PHI and we might have to short-sheet the new market's value pool. So what are they?

The next question comes from Siddharth Para from JPMorgan.

Just one overriding question just around access to data for things like green pass. Could you just comment on what data are you actually looking to put into this personalization? And would you have access to my health records? Or will it be -- in terms of the decisions you're going to be trying to, I suppose, encourage consumers to make, is it more than coming to your app and saying we've got this issue? And secondly, just around wearables and data on health coming from that, is that being integrated in terms of what you're trying to include? And also just whether you're taking on any liability by trying to provide advice and triage with this and other doctors on board with this? Maybe just some general comments that you could make around the data issue and your ability to access it and the ability to make decisions on it in a regulated form.

Yes. Well, as you imagine, Sid, it will evolve in time as big data and our ability to collect and ingest data grows for us and many other companies. We have a lot of data on our people to start with. We know that -- we know their claims experience, we know their sex, we know where they live, et cetera, et cetera. The main pipelines will -- for the data feed will be through individuals doing a health risk assessment and using these devices through various means. We've done that already in New Zealand with Ngati Whatua, for example. So health risk assessment in 2021, 2022 will be the main data source. Our ability to integrate with My Health Record is certainly on the drawing board. And Ed can speak more authoritatively about this, but...

Yes. As part of the pilot with Snug for those first 1,000 members, that has a direct integration with My Health Record, Sid, so that our members will be able to bring that data into Snug and it has a read and -- read, write and edit access within that. So that's an important first step around bringing in that data set alongside what Mark talked around the claims data and the demographic profiling that we already have on hand. And to your point around the wearables, so as part of our wellness activity and our offering in partnership with an organization called Welltech, we are now ingesting and have connectivity with a range of different wearable devices, so Apple, Garmin, Fitbit, all of those major players, that's bringing it into our digital ecosystem right now. And so those data sets are being brought together and then working with Honeysuckle to run essentially risk -- health risk analysis across those that then we can present back to that member. To your question around advice and where do we draw the line around our role at nib and not looking to then circumvent or substitute clinical advice, the good health plan that we talked about will be powered and I guess underscored by the RACGP Red Book. So it won't be necessarily nib putting our own recommendations that we'll be looking to bring that best in-market capability and clinical expertise, along with all of Honeysuckle's capability and presenting that back. So just to give you some confidence around how that loop is then closed on the data that we're accessing. When there's data exchange between nib and Honeysuckle, that's done so obviously with all the privacy and consent measures that you'd expect in a de-identified and then reidentification process that follows.

So Honeysuckle Health, and Rod can cover this later, has its own well-developed sophisticated clinical governance framework to ensure that any form of clinical advice or guidance being given to people in our programs is appropriate. And of course, in terms of the sharing of data, Ed touched upon it, there's going to be -- there's already a very heavy emphasis on data security, integrity and privacy. Information we send to Honeysuckle Health is de-identified as it will be for any other support services. But ultimately, in the eyes of the consumers, they'll make a judgment based upon the value proposition. But we all take risk in life. We take a risk when we jump in a car, but we do it because we get -- it gets us from A to B. So consumers will ultimately judge whether or not sharing the data that they consent to sharing is of sufficient value to them to warrant the intrinsic risk in sharing that data.

Okay. And just a follow-up just on your workers and students loss ratios. But you said that you were expecting those to eventually return to ratios you had previously enjoyed. But I just wanted to be clear on that because on the contrary, that had been changing over the last few years, even before COVID there was -- you'd identified competition, you'd identified pressures I think in terms of potentially pricing issues, some of the growth you had then have been completely correct. So I mean in terms of that comment about returning to previous loss ratios, I just wanted to be clear which previous year are you referring to?

Yes. No. It's a good question. And you're right, Sid, they have jumped around over the years. Look, in my own mind, I -- and looking around the world and looking at our New Zealand business, for example, the Australian loss ratios, as you well understand, ours at least is confounded by risk globalization. So I generally in my own mine when I think about these businesses think about if it would be fair and reasonable to return $0.60 to $0.65 in the dollar to the insured. So further on in the presentation, we'll talk about our target loss ratios for the combination of workers and students. But look, it's very much a best estimate. And to your point, not necessarily indicative of the kind of loss ratios we've seen over the past 10 years. And of course, those loss ratios have varied sometimes dramatically between workers and students just as we're seeing at the moment. At the moment, the workers business is very profitable, but it's being offset by the students business.

The next question comes from Kieren Chidgey from Jarden.

Most of my questions have been answered, but I just had a couple of follow-up questions for you. Firstly, around the 800,000 policy targets arhi. Just to be clear, are you sort of counting any expectations around this green pass membership initiatives within that? Or are they [ successively to those either ]?

Yes, we are. So that's very small like green box that you can see there on the slide is attributed to the Payer to Partner for the broader proposition, which would include green pass being pushed across into the PHI vertical. Until you get to market with these types of concepts and have some -- obviously, some maturity around how the concept develops, it's always difficult to quantify what that conversion rate will look like. But based on our early thinking, we have attributed some Payer to Partner uplift in the 800,000.

Yes. And the segue into fully blown PHI membership isn't just the green pass, and we'll come to that in a moment. It's also this product concept of selling bundled treatment packages. Once they've purchased, and Ed will talk about this in a moment, they go on our CRM and the consumer comes in play for an ultimate PHI offering.

Yes. And then my second question just going back to an earlier question sort of around the personalization strategy, which is very much digitally enabled, presumably that resonates more with younger members rather than the older members, which drive the majority of declines particularly in hospital. So I'm just wondering sort of what experience you've seen? I know sort of the usage of these initiatives have been pretty low in terms of the trial so far, but what sort of the uptakes are across different demographic sets of your customer base so far and how you think about default personalization strategy? Is it much more aimed as a funnel of attracting younger members and improving your loss rates rather than having a significant impact on claims if those are the cohorts binders after -- in using some of these features.

Yes. Look, I think it's reasonable to theorize that younger people will have a great propensity to engage in these type of services. Then again, my mother was 84 last week, a ninja online. So I think we need to be cautious about generalization. I think a channel to Mark will -- and one of the reasons we're so keen to developing a closer relationship with GPs, and Rob will talk about this further on, and we already have -- already have GP that works in place now through our workers and students business as we see them as a reference point. Now primary care probably has its own challenges around the use of technology, but we think we can be part of that solution. And if we can get -- reach a point where our GPs are actively suggesting to people these kind of solutions we think that, that should be a positive development. But Rob will cover that GP utility prospect further on. So anything you wanted to observe, Ed?

I think, yes, there will be broad appeal, and the early indications do suggest that the younger demographic will find the propositions that we talked about, the largely digital-led propositions are really appealing. But notwithstanding that, and we'll spend a bit more time around the health management program offering, which are both digital and phone-based and we've got 6 to 8 of those currently in market that are more targeted at existing insured members, and there is an objective around better health outcomes and therefore, leading to cost containment to that suite of programs. So we are looking at sort of a broad spectrum of offerings that appeal to both the younger demographic from an acquisition and a retention perspective through digital engagement and then having a complementary set of health management programs that are quite targeted at our existing member base more so in that older demographic and giving them some value as well.

Okay. So I might draw a line on the questions because I'm quite determined to get a break at 11:00 for everybody. So we'll move to the next value pool, which is the -- as I touched on earlier, the $35 billion or so that Australian consumers spend on health care in respect to which we simply don't participate at the moment. And you could draw a similar conclusion in New Zealand. Okay. So this concept, new markets. We've entered and grown new markets with a non-PHI membership, that's the green pass we've spoken about as well the treatment packages, which I mentioned just a moment ago, and Ed will talk a little bit about that. We're differentiated and grown our travel product. So we've thrown -- we've placed travel within this particular value pool. Our Chinese business is significant, and we have entered and differentiated and grown our NDIS plan management. Now look, we won't spend too much time today -- on this today because it's still -- our thinking are developing, but we thought it was -- it warranted mentioning today on the basis that -- of the no surprises policy. So over to you, Ed.

Thanks, Mark. So next slide, please. So the purpose of this slide is just to sort of bring to life these additional entry points that I talked to around how members can start to engage with the nib brand more holistic than our traditional health insurance offering. So in addition to the insurance offerings that we currently offer, we'll have 3 new ways to engage with our brand. The first one that we've talked a lot about is the freemium green pass. So we're attributing 120,000 nonprivate health insurance members by 2025 to this category. And just to go a little bit deeper around, well, what does that actually look like? So the simple way of describing it is there's all the benefits of nib without private health insurance. So you'll have a digital access to a range of health tools, rewards, wellness, appointment booking, symptom checkers. And you can simply sign up to this with -- in a very low friction environment and complete your onboarding through this personalized health risk assessment and the good health plan and the digital health record we've talked a lot about, and you'll have access to our First Choice Network. And so we've been stepping back and reflecting on the range of different propositions that we offer insured members today and so how do we make this shift from policy-centric back to member-centricity. And so that's really in a nutshell how this green pass membership will evolve. We think it's going to be a market-leading proposition that will appeal to a broad demographic but will skew younger to the earlier question. And that will be fundamental to our ambitions to be more relevant to more Australians, New Zealand as international students and workers, but also that nurturing opportunity in the private health insurance that we talked about in terms of the buildup around the 800,000 target. The second area of focus around nonprivate health insurance relationships will be looking at how do we go to market with the health management programs that we are currently offering and that we are building for our existing insured members, and actually take them direct to consumers through -- largely through digital. And so these will be clinically effective health management programs at a reduced cost. So again, it will be a paid service offering that all individuals and consumers can engage with and purchase digitally. And then those programs will span -- I talked about mental health before, we'll be looking at weight loss, pre and post-hospital support, musculoskeletal, diabetes management. So we'll be looking to -- nib is really zeroing in on specific health conditions and treatment plans. And we'll be taking those to market over the coming months in partnership with Honeysuckle Health and a range of third-party providers. Health treatment packs is the last area of opportunity. And I talked about the -- this emergence of digital health care clinics or providers in the marketplace that connect telehealth and pharmacy to the door. And we're acutely aware of that shift in some of the global players that are growing very quickly, and we see a huge opportunity to be a part of that to create benefit both in non-PHI and PHI. And so what will these types of packs look like? Well, these will be personalized treatment plans targeting men's health, women's health, skin care, dental, nutrition. You see some of the examples on the slide. We're now in market, as I mentioned earlier, with pregnancy. That was our first foray where we have disconnected the need to have an insurance relationship. So that was a pivotal moment in our Payer to Partner objectives. We're working closely on the skin care and dental packs to be launching in market in FY '22. And what does that experience really look like? So if we take the example around skin care and Jane that we talked to this morning, it's as simple as going through a digital triage experience after you land on our website or some of our partners' websites. And you'll -- through a range of different symptom checking and diagnosis, that information is captured and pass through to an Australian-based GP. That GP will do either an asynchronous or a real-time virtual consult and actually prescribe a treatment plan, which could either be a range of pharmaceuticals, it could be vitamin supplements, it could be content, it could be additional consults. We don't get in the way of what that clinical recommendation looks like. Our role is really to connect and then create that digital experience for these individuals. That then may arrive at pharmaceuticals to the door and then ongoing health supports and consultations as part of that ongoing pack. So that's probably just to try and bring to life a little bit around how health treatment packs come together as we go to market and becomes the third entry point into the brand. If we jump across to the next slide, this just helps to illustrate what does this actually look like in the eyes of the consumer? So you'll see at the top, we talk about it all starts with our green pass membership. So that is that low-cost, early engagement opportunity with nib brand, very different to the construct around health insurance. And then you see a range of different add-on both paid services there, including hospital and extras. So importantly, as we look to go to market with this over the coming months, we are in the process of refreshing the brand as well. So that will help us really evolve from that traditional payer of health insurance to this broader health care partner. So just probably a quick snapshot of how we see this new membership experience look like. And with that, I'm passing across to Rob.

Good afternoon again from New Zealand. I'm going to talk about the travel industry and also our JV in China. And I chair the Boards for both of those businesses and [ I've heard from -- ] who runs the travel businesses in Europe. At the moment, I'm talking to our business partners. So just as a couple of points on this slide in terms of travel. The sector has been through a really turbulent time, but nib travel has actually reacted very swiftly and well to those conditions. I mean cost reductions, business continuity, operational efficiency and we're in a good position while the market is still kind of relatively slow to position for growth for the future. Many countries now are beginning to ease their restrictions and there's a quote on the right-hand side on the chart there from Alan Joyce and also some quotes from some of the industry consultancies just saying there is pent-up demand, and we expect it to come back increasingly from the new year. Europe is already opening up. And obviously, within the U.S., there's still quite a bit of travel going on. nib is really well positioned. We've added COVID coverage into our products. So limited COVID cover related to the disruption. We've got new underwriting arrangements in place in Europe and shortly to announce from Australia and New Zealand. So we're well positioned when the business comes back. And then updating -- we're taking this opportunity to update the digital platforms and processes we've built during the COVID time, white-label capability. We're using it for SuperValu in Ireland, which is a very big grocery chain there, and it's built in such a way that it can expand across the group into other partnerships. And I guess the last point I just wanted to make, if you look at the chart on the bottom right, is we're very well placed for the expected return. It's not coming back fast. I mean different [ hundreds is ] a bit of a range there. But certainly, the end of FY '23 and into '24, we expect there to be significant travel and a significant opportunity for nib travel, particularly given that many countries will mandate travel insurance as being part of your travel package. If I can go to the next slide, please. And just on China, the JV is progressing well. So as you know, we've got a 50-50 JV in China with Tasly. It's a huge Chinese pharmaceutical company. It's got a turnover of about $4 billion. And it's quite diverse. It predominantly was known for traditional Chinese medicines, but it's also come into conventional pharmaceuticals, health care services, rehabilitation, functional foods. And as we found out the other day, they even have a wine business. So they're quite differentiated. So the JV is going well. We operate there in a huge market, $163 million today in terms of health insurance premiums and predicted to be about $400 billion by 2025. So yes, it's a very big market. And so the attractive things for us is the JV with Tasly. They're huge. They've got a great network within their employee base. A pharmacy chain they have online. It gives us a really good platform. We're already in market selling health plans. And now that we have our license and particularly the online license, we just begin to sell health insurance. And so -- and that's going very well. We've got plans to expand. We're currently really only in Tianjin, which is where Tasly is based in Beijing, but we've got plans to expand with brokers into other 4 main cities. And so our aspiration, we're about a $10 million revenue business today. We're going to be $50 million by 2025. And at that stage, we should break even and grow there on in. So just a quick snapshot, but progressing well. And I'll hand on to NDIS.

Is this me? I can't remember. Okay. Well, look, I touched on this earlier. We're very excited about the NDIS opportunity. You've all seen statistics, almost 500,000 Australians are clients of the NDIS today, $30 billion or thereabout in spending. Our forecast more than double in the years ahead. We see -- we're conceptualizing the NDIS as similar to health care in as much as we play an agency role in health care and connecting the buyers and sellers of health care services. Similarly, there's an opportunity for us to play a role in connecting the buyers and sellers of disability services. And we rather suspected our P2P investment and its focused upon individualizing needs and the responses to that need and requirement would make us -- gives us even greater potential to do well -- well, not only in this marketplace, but for the various NDIS clients. So look, I won't spend any more time in the NDIS, except to say, watch this space. Questions?

There's no questions on the online platform, but I believe we have one question on the teleconference.

Correct. We have one question from Andrew Buncombe at Macquarie.

I might go in reverse and start with the travel questions. Apologies if you've covered this somewhere, but can you just give us some color on when you expect to get the capacity back up and running for the Australian and New Zealand routes?

Before Christmas.

Okay.

You mean the underwriting arrangement, Andrew?

Correct.

Yes.

Yes. And then the second question again on travel insurance. Can you give us a bit of color on how margins compare to the Australian versus international businesses?

The margins are very similar. Recognizing that we don't ensure the risk, we are a distributor and an MGA. So I wouldn't be trying to differentiate on that basis. Yes, I've been in and out of love. We've travel since we acquired the business, what, 6 or 7 years ago now. I'm back in love with it. I think I'm back in love with it because I think it will bounce back quickly. I know Alan Joyce think so, but he's got his own book to talk just like me. I think the health risk will be all the more pronounced in the reckoning of -- on consumers. And I think there's a level of personalization and digitization that we can bring to that. For example, I was speaking to the global head of our prospective new underwriter for Australia and New Zealand, who mentioned that in their analysis, dehydration was a key risk factor in travel. So why are we giving people water bottles when they leave and nudging them with reminders to have a liter of water while they're away, et cetera, et cetera? I just say this because that sounds -- that's such a simple example of where we can apply our personalization thinking to travel. And importantly, we've taken advantage of the hiatus during COVID-19 to build capability in the business and merge business operations with the mother ship, nib. So our cost base will be significantly reduced when we return to a fuller marketplace. So the original investment thesis for travel for us was we wanted to have our members back wherever they were in the world, that still stands today. We had already proven prior to the acquisition we could sell travel insurance, nothing's changed there. And something like 40% of the exposure in travel insurance is actually health related. So the opportunity for us to better manage that risk I think is even more pronounced today than it was even at the time of acquiring the business.

And then just a final one from me, apologies for jumping around a bit, it goes back to the residence business and specifically the growth aspirations for the white-label partnerships. Can you give us a bit of color on maybe how you're using data? Or how you're going to avoid cannibalization across the brands?

Yes. So yes, we have a range of different mechanisms in place to ensure each of those brands can complement the nib brand when we go to market. They include everything from database marketing, exclusions, washes, contractual requirements, and I won't go into all of the detail there. But I just give everybody some confidence that there's mutual benefit for both the brands, all of those brands around when they go to market. So we sort of overlay from a strategic perspective around geographic targeting, segmentation from a scale and life stage perspective around age, and then we start to move in some of those contractual principles that I talked to. And then we've got our marketing -- our go-to-market strategy to ensure that there's good consistency and mutual benefit to mitigate any cannibalization risk. So we're really confident in how those principles are laid down. That's definitely -- we've got a proven track record there by being able to continue to grow the nib brand, but also break out growth with the likes of Qantas and Suncorp, and we'll look to do the same with ING and Priceline.

Yes. So we have those guardrails, Andrew, but at a higher level, cannibalization was always going -- would be less an issue for us when we built this capability, which has gone enormously well. There was always going to be a less an issue for us with less than 10% of the marketplace compared to, say, BUPA and Medibank Private's 27%. I think we have a couple of more questions, Renea?

Yes. We've got three questions at the moment on the online platform. First one from Sid from JPMorgan. In terms of travel, when do you think the business will break even? And are you going to provide insurance for COVID-related travel difficulties going forward in our product design?

I'd like to think the travel business will break even by fiscal '23. But again, so much depends upon what happens in the marketplace, but that's our goal. Sorry, the second question was?

In regards to insurance, the COVID-related travel difficulties in our product design, will we provide for that?

Yes. Yes. So that's been priced in.

The next question is from Doron. Can you provide more color on the comments on travel insurance becoming mandatory? Is this in relation to COVID cover?

Well, I wish. But certainly, there's speculation that some countries will require travel insurance as a condition of entry. So let's hope so.

The next question is from Sid. For NDIS, do you need to make acquisitions to enter the market? Or does plan management use existing skills that we have?

Now the acquisition, I think one of the things we've learned over the years, if you look at kind of the Red Queen Racing experimentation, we've done in new marketplaces, you need to start with a level of critical mass on -- of customers -- of revenue. And so with that in mind, our thinking is to look at an acquisition to get us started and then build upon that.

And the final question is from Doron at Credit Suisse. Are most carriers providing COVID cover for travel insurance? Or is this a differentiator for nib?

I think most are. So let's be clear with COVID, all it's -- it's not protecting you in an event of a sovereign declaration around restrictions on travel. So it will protect you if you get COVID or somebody in your family gets COVID, which prevents you from traveling, and it will protect you in the event that you get COVID in a foreign country and require health care treatment. But as far as I'm aware, and I just see Rob Hennin nodding his head, most carriers are offering it. So it won't be a point of differentiation per se, but I rather suspect it will become a table stakes in the sector.

And one final question before break comes from Karyn from UBS. What level of increases do you expect in average travel insurance premiums post-COVID? And does your revenue benefit proportionately?

Look, I'm not sure if we're at liberty to disclose that kind of commercial information. I'm sorry, Karyn. But look, we're not talking about -- it's not side C liability cover. It's -- my memory is it's in the order of 10% to 20%. So it's not going to be -- it's going to turn people off from traveling. They're not going to be that price sensitive. Probably the thing that make consumers most price sensitive at least for the time being is the cost for being tested on arrival. Okay. There are no more questions? Okay, look, gee, we made it, 11:00. So we're going to take a 15-minute break, everybody, and we'll be back at 11:15 to go to our next value pool. [Break]

Hi, everybody. Welcome back. Okay. Look, with the prevalence of unwarranted variation in Australia, your chances of having a major joint replaced can vary [ fivefold ] depending upon where you live in Australia. And the fact that we had something like 700,000 potentially preventable hospital admission each year, there's the opportunity to capture value here is self-evident. But the way we're thinking about it is any efficiency you can think of it in those terms that we're able to achieve through our P2P and personalization effort, they'll be passed through to consumers in the form of more competitive prices. As I mentioned earlier, that helps drive our competitiveness in the PHI marketplace or in the form of improved benefits, which similarly improves our competitiveness, reduces the incidence of out-of-pocket experience and hopefully makes for a more satisfactory consumer experience. So within this value pool, whatever value we can capture, we intend to pass through to the consumers in that manner and form. So Nick, over to you.

Thank you. Let's go to the next slide, if we could, please. Thank you. So I think we've talked a bit before around the sustainable margin structure in our Australian residents business. And you all have heard about the 6% margin. And typically, what we do is we look, when we come to the annual pricing round, we look towards that 6% margin, price at that 6% and then try over the coming 18 months to then improve it a bit, either through claims cost effectiveness or through lower expenses. And the top left table is just designed to show you how that margin comes about and where the 83% to 84% claims target comes from, then you've got the reinvestment in our marketing, then the administration expenses down to that net margin. And that's been around for quite a while in terms of that's what we see as the sustainable margin that provides a good return to shareholders and good benefits to our members. So you can see here that as we improve our claims cost effectiveness, and we'll talk to you about some of the things that occur in that in the coming slides, we then cycle that back into value for members, either through lower pricing or through additional benefits. Or we can look to look towards marketing in terms of the growth in the MER there. When it comes to the benefits, we are conscious around the NPS. We did get the feedback on our NPS results over the last year and around its reduction, so we're focused on enhancing that as well as MediGap, which is one of the, again, the feedback that members provide for us. You can see at the moment that our margins have been above our target margin. That's not surprising, given COVID. So again, we do have some consideration around that balance between our sustainable margin and the COVID savings, and we'll be considering that in the future. I might just go to the next slide. What this is just trying to do is to show you that on the left, we have been successful in being able to price in the increase in claims per policy. So the left-hand graph, the top line with the trend just shows the average revenue per policy, and then the bottom trend line is the average claims per policy. You can see that, that gap has just widened ever so little again, that's just highlighting the cycling the effectiveness and the pricing. And then of course, right at the very end, goes way off the trend line, which is the impacts of COVID. But what we're just trying to demonstrate is over a long period, the pricing strategy appears to be successfully pricing in the inflation. And then on the right-hand side, I thought it was just worth highlighting, over the last 20 years that in fact, the average price increases are declining quite dramatically. We've got the upcoming pricing round coming up over the next month or so. So we'll be looking towards that and giving that good consideration. But just worth highlighting the low pricing that's occurred over the last few years. And while that's the nib number, it's been reflected in the industry. I might hand across to Ed, who'll just provide a bit more about the claims effectiveness of Gold claims management.

Thanks, Nick. So we definitely take a holistic view around claims containtment for the arhi business, and we're looking to always address claims inflation through a combination of predictive analysis, preventative activities and also remediation around product design and pricing where required, with the objective of mitigating adverse selection and really, reducing that unwarranted claims exposure to ensure that we've got fund sustainability, as Nick has touched on earlier. So you see on this slide here, to draw your attention to the bottom left. We look primarily from a product design, and competitive positioning lens is our first way of ensuring sustainable claims inflation, making sure the product inclusions and the price points are in line with our objectives around balancing growth and profitability. We've had a number different experiences over the years where we've learned quite quickly where we've either been underpriced or may be too inclusive in certain product ranges, and that has then led to adverse selection with remediation required quite quickly. So we're taking all those learnings continually, we continually scan to ensure that our market competitiveness is on point, in line with our pricing objectives and our product design across all of our brands and channels is fit for purpose. We also take a holistic view around our marketing and distribution strategy. So it's definitely not a one-size-fits-all approach to which products go into which channels and under which brands. So we're very careful and deliberate around the decisions we make around which products, for example, are displayed through brokers and available for sale, given that there's a higher propensity for switching and also people looking for higher cost and event planned health procedures. So a lot of work goes into ensuring our marketing tactics, and our distribution profile is taking a claims containment view. Financial forecasting and pricing adjustment is obviously critical, so we take that forward-looking view based on the historical learnings around what is likely to happen on a range of these products. And the great benefit now of having a really broad coverage of brands and product designs gives us very quick learnings around what's working and where do we need to make adjustments. Premium adjustments are, of course, an obvious lever that we can pull. And sometimes, you need to pull that in conjunction with either a product closure or the removal of certain services, where we are seeing adverse selection. And so we continue to scan and work very closely across the organization and brands to make sure that we're making those decisions on an ongoing basis. From a broader perspective, beyond product design and marketing, we also look at provider contracting and funding model to ensure that the rates and contracts that we have with a range of providers are fit for purpose. We talked earlier this morning around value-based health care and the shift towards bundling of payments and funding models. So looking at a range of different tactics there to ensure that we can deliver benefit to the providers, but also containing costs along the way. We've spoken in depth this morning around our health management strategy and program delivery, and we'll go into a lot more detail with the Honeysuckle Health session shortly. But in essence, largely targeting those existing insured members with a suite of health management strategies to look at everything from chronic conditions to hospital discharge support, weight loss so that we are using that data science capability that we're quickly building, being able to identify and then personalize with deep precision, which members are right for a health management program, look to then deliver that either through digital or phone-based means in partnership with providers, with the benefit of improving those health outcomes, but importantly, down the line, improving commercial outcomes through effective claims containment. So that just probably helps you understand a little bit around the Royal Health management strategy plays in this. And then finally, we have a lot of work and investment happening within payment integrity and audit processes. So Mark touched on the automation of claims rules earlier this morning. What we are looking to do and what we have already done is implemented a range of different preventative and predictive rules that look at provider behaviors, that look at billing practices, look for fraudulent billing where it is, or look for anomalies within the payment rules that are coming through, and we can quickly then deploy a range of rules that either prevent or predict, and then we can take through our audit processes, remediative action around addressing where we think there's been some claims exposure. So that probably just helps you better understand around how we take a holistic view around claims inflation more broadly. And I think from here, we'll open up for questions.

Yes, just an observation. Can we go back to slide, please, Renea or Amber? Now go one before. I get really, really annoyed when I hear this suggestion about PHI and the jaws of death. What a nonsense. That graph on the left is not a jaw of death, not by any stretch. We've been successfully able to price in underlying claims inflation for a long time now. And you'll actually see on the right-hand side, and we're doing a good job improving affordability, including inflation, including and keeping inflation low. Look, if you're looking at real jaws of death, you look on the public financing side of health care, where a growing dependency ratio is absolutely knocking taxation revenues for [ 6 ], and I won't go into details there, except to say that we sail on a sea, which is positive for the private -- in the long run for the private financing of health care. This is not thermal coal. This is an industry which is going to continue to grow. And our relevance and that of the entire private system within that health care landscape will only accelerate from here. So questions? I think we have a few.

Correct. So the first few questions are from Andrew Buncombe from Macquarie. Will the Chinese JV require you to allocate further capital anytime soon?

No. Not unless there's an acquisition.

There's more sufficient working capital in the business to get us through to a point where we're cash flow positive.

The next question is, can you give us a pro forma earnings figure for the Kiwi acquisition, please?

We haven't provided that yet. We're happy for you to look back at the Kiwi bank accounts, and that's got some financials for Kiwi Insurance.

The next question is, can you give us some color around earnings expectations for Honeysuckle?

We'll come to that later today. I don't expect it to be profitable this year or next year. But beyond that, most likely, I think though -- again, we'll cover this later in the day. Honeysuckle Health will arguably look at very different business again 2 years from now. So looking too far out into the future with a start-up, which hopes to become a unicorn is problematic.

The next question is regards to Slide 31, which is the arhi sustainable margin structure. Andrew asks, is that a medium-term target or effective for next premium rate rounds?

So Andrew, it's -- I think we had this sort of discussion at the full year as well. I think it would be fair to say that we're above the 6% margin currently and that wouldn't be a surprise to anyone. So really, when we come to talking about the balancing of that margin, we have discussed around needing to think about the impacts of students and workers business as well as other impacts across that. So we look to balance that across the medium term. So I'd call it the medium-term target.

The next question is from Kieren from UBS. Nib's approved premium rate rise was above industry in April '21. Are we targeting a more in-line outcome for April '22, given margins are trending strongly?

Well, nobody knows what the industry application is going to be. So it's difficult to say. Sufficient to say, our proposed increase for next year will be modest relative to previous years because of the state of the market. But how it compares to the industry as a whole, well, only time we tell.

The next question is from Sid from JPMorgan. The 6% to 7% margin target is new. It used to originally be around 3% or so on listing, then increased to 5% to 6%. How does this work with the premium filing process with government? Are they okay with this level of creep? And in a COVID environment where we made a promise not to profit from COVID, how does that view include travel and international? And what is our approach to making sure we live up to that commitment, given the 9.7% arhi margins last year?

Well, Sid, your memory may be better than mine, but most likely it is, but I don't ever recall the 3% target market -- margin. I certainly recall 5% to 6%. I recall that so vividly because we've done some calculations at the time, which suggested that our return on invested capital would be around 15% if we met that margin at the growth rate we aspire to have. So we're not too far away from where we originally were. 6% is more today our target, which is simply at the top end of that original rate. And we -- our philosophy is, whenever we are competitive in the marketplace and continue to outgrow the marketplace with our pricing, we will maintain the margins as high in sustainability as we possibly can. Sorry, the second part of your question was?

In regards to the commitment not to profit from COVID and whether we include in that view, the travel and international and whether our approach is making sure that we're living up to that commitment, given the margins from last year.

Sure. So to Nick's earlier observation, it's pretty clear we're happy to entertain elevated margins whenever our loss-making in other parts of the insurance business is happening. So we will reduce that margin to coincide with the recovery of those businesses. That's our -- pretty much our plan. I don't think there's any political risk associated with that. We're being quite aggressive in compensating members, for lack of cover. We've calculated total compensation in the order of $60 million already. We released another $15 million just recently by way of a premium rebate, and we'll look to further compensation as circumstances warrant it. One thing we won't be doing is racing out making compensation decisions until things are a little bit clearer about the COVID-19 impact and its consequences on our margins as you'd expect we would be.

The next question is from Andrew from Macquarie. How much fraud do you think remains in the system?

Fraud?

Yes.

Well, things we did define as fraud, I suppose, I don't know the academics have it typically in health insurance systems of between 0.5% and 1.5%. So it's not -- in the scheme of things, fraud is obviously important, something we need to mitigate. But really, the biggest challenge is about keeping people who -- where it's possible to maintain their good health and keeping them out of hospital. Now that's not fraud. It's simply about risk management.

And the final online question is from Nigel from Citi. Do you see any increased risk of adverse selection in the recent increase in industry participation?

Well, the industry will always encounter a level of adverse selection. Obviously, people who self identified as not as well as others, will have a greater proclivity to take out health insurance. Our job as a company is to ensure that through our product design and pricing that we're not particularly attractive to those people. So I don't see COVID -- I think COVID-19 has had, as a consequence, sicker people rushing to take our health insurance. I'm sure there's an element of that, but I think that will be more than offset by the fact that a lot of healthy people will take our health insurance because of similar concerns. But, look, our ultimate job is to provide -- a fundamental theme today is we want to be in the business of helping people, with their doctors, stay healthy, not just be there for them once they're already sick or injured. That's the investment we're making and that's the focus we have. And hopefully, that focus will be as attractive as a value proposition to young and healthy people as much as it is, typically, older and sicker people. I'm saying that I'm 62 now, so I'm not disrespecting older people.

There are no further questions on the online platform. We'll just check the teleconference.

We have no phone questions at this time. [Operator Instructions]

Okay. With this -- with that in mind, we may -- we'll move to our Honeysuckle Health value pool. So by 2025, the Honey Stack Health portfolio of business lines has helped nib improve health outcomes and contain our claims exposure. We've just discussed that. Significantly, there's growing revenue and earnings across a wider client base, emphasis on wider, and Rhod will talk about this further on. But while nib is the -- preeminent and inaugural client of Honeysuckle Health, it is already winning over new clients, and with the revenues that come with that, but I'll leave that to Rhod to talk about. So ultimately, in this value pool, as a 50% shareholder in the business, we capture part of that profitability value that can be attributed in whatever form we choose. But most importantly, we're keeping our members and travelers all the more healthy and safe. I'm not sure we were -- we just wait for Rhod now. We have nothing really in the way.

That, we're just going to pass to Rhod at the Honeysuckle Health section.

Yes. Something -- just as an overview, while we have the time, something we learned when we're going through the process of establishing this business that -- was that we learned this from the Americans and the Optums of the world and the interpreters of the world, that investments like the investments we're making in P2P, the real value creation was really in substituting for what would otherwise be expensive care, think hospital care. So if you're able to deliver -- so you'll make some money on a consulting basis from providing advice through data science and helping clients risk profile their population and determine what programs might have the greatest efficacy in improving health outcomes. But what we learned is that where the monetization really occurs, as I say, in preventing hospitalization without compromising clinical outcomes, of course, or providing for hospital substitution. And so our view about Honeysuckle Health is that the real monetization occurs through the delivery of those actual programs, the margins that are made through delivering those programs. Payment systems will eventually morph into value share, risk sharing, I suspect, with Honeysuckle Health. And the dividend distributions, we as a company get from that endeavor. So this is a longer-term objective. And I'm cautious to mention too much about U.S.A. approaches to this. But obviously, governments around the world, particularly in the U.S.A., are turning to the private sector to basically take themselves off risk, so they still fund the social insurance programs they deliver. But they take themselves off risk and turn to the private sector to actually deliver the programs. And this is what is Medicaid across the U.S.A. now, it's what is Medicare Advantage across the U.S.A. But aside just the U.S.A. phenomenon, there are any other countries and jurisdictions applying a similar approach to managing discrete sets of population. So with Medicaid in U.S.A., for example, it's populations of lower socioeconomic means. So in our thinking, we see a similar opportunity for us into the future. We suspect the only way we're going to bring about that shift in policy thinking in government, notwithstanding the pressures they're under fiscally, is to demonstrate how we can do it. And we're demonstrating that already in New Zealand with Ngati Whatua Orakei. We see opportunities to grow that business. And we've planned -- and we'll talk a bit more about this shortly, we're planning to replicate the population health management approach we have taken in New Zealand in 3 regional Australian communities, where health outcomes are troubled and there is especially egregious gaps in outcomes and access to care amongst indigenous populations. So this is enormous value pool also in Australia alone, government accounts for about $130 billion of the total $200 billion we spend. But it is going to take some efficacy, but most importantly, some proof of concept. And I inadvertently stole the thunder of this next slide. So I've mentioned this is -- is this my slide?

Yes.

So I've mentioned some of those numbers already, and I've made the point already, that the growing dependency ratio in Australia and New Zealand is making taxation-funded health care less and less sustainable. There are already examples of government taking this approach and outsourcing to the private sector its health care programs in Garrison Health, which is now delivered by BUPA. They won that business from Medibank Private just a couple of years ago, although I think it is up for renewal soon, isn't it guys? Yes? And the Department of Health immigration checking process, which is also conducted by BUPA. And of course, we've seen -- well, that hasn't surged as I expected it might have just a few years ago, but it will happen, the incidents of hospital public-private partnerships, best example of that other than in West Australia, is probably Healthscope's partnership with the New South Wales government in the Northern Beaches in Sydney. I've touched upon the fact that we are developing a sophisticated population health management capability and framework. And Rob earlier in the presentation showed the risk hierarchy, the pyramid that we use to identify -- to restratify the population, identify what programs, interventions, products and services are most likely to be appropriate and cost-effective. And there are a range of other partnership possibilities. And again, Rob will talk about this a bit further along with other health care players, because it's not just private health insurers and government who are involved in paying doctors and hospitals and the like, but a range of other parties, including general insurers. And as we have emphasized already today, and again, we'll come back to this, none of this makes sense unless we have the precision of that our investment in Honeysuckle Health and data analytics is intended to provide. So they're the specific value pools within the health insure -- within the health care marketplace and adjacent marketplaces like Travel and the NDIS we discern and the approach we're taking in seeking to participate in those marketplaces, those value pools. Now, obviously, underneath all of that requires a lot of organizational capability. So these next couple of sections are focused to find those particular capability, starting with our important responsibilities under our important social environmental responsibilities. And look, I made the point earlier, I'll just restate it that we're not doing ESG because we -- it's trendy or of course, we think that's what investors expect. To us, ESG is intrinsic to our business, we exist to keep people healthier and the populations within which they reside within. So for us, and Ros will talk about this in a moment, but for us, we see a fantastic opportunity for us to demonstrate our social license, just doing what we're meant to be doing as a business that is improving the health and well-being of people in their communities. So over to you, Ros.

Thanks, Mark. And as Mark has alluded to, nib is really committed to sustainability. And over the past couple of years, we've certainly increased our investment and stood up a separate business unit that's dedicated to sustainability. I've just set out, there are 5 pillars of sustainability, and population health is one that we'll talk to shortly on the next slide. But community and cohesion, economic development and employment, natural environment and leadership and governance all form part of our sustainability pillars. And for the first time this year, we've actually released target. So if you have a look at our sustainability report on the website, you'll see the targets that nib has set. And I might just talk to a couple -- the high level ones and then you can go and have a look at the sustainability report yourself. But for population health, and we will talk to that in more detail, we're looking to launch a digital health record, risk profile and good health plan. And we're also looking to enroll [ 11,500 ] members to participate in health management programs, and that's compared to 6,500 for FY '21. So we're certainly focused on that. For natural environment, as many of you who would have listened to the AGM, we're committed to being carbon neutral by the end of FY '22. And we're also in the process of developing our science-based targets so that we can be carbon net zero by at least 2050, but we're revisiting that time frame as we do that work, and we've kicked that off notably for nib. Most of our emissions fit in Scope 3, so we need to work with third-party vendors in that space. In terms of economic development and employment, we are looking for 40-40-20 gender mix, both at a Board level and management, and nib has done quite well in that space over the past few years. For community spirit and cohesion, we're committed to 1,200 hours of volunteering to support our community partners. And very importantly for nib is the launch of our Reflect RAP, and we're committed to achieving 100% of those deliverables. It's a really big commitment for nib and one that we take very seriously and sincerely. And our final pillar is leadership and governance. And we're looking there for zero breaches of our code of conduct and zero cybersecurity material control values. And Brendan and his team have invested quite heavily over the past few years in cybersecurity in that space. We'll have the next slide, thank you. So look, Mark has spoken about population health. And shortly, I'll hand to Rob Hennin, who will give you some examples of the work that we're doing in this space in New Zealand. But the objective of population for health for us is to improve the health of our individuals within defined populations. And this is key, not only to our sustainability pillars but also to nib's overarching strategy and P2P. So there's been a lot of work done, not just within nib but obviously with Honeysuckle Health in this space. But I guess, at a high level, what I'd highlight is that this is no easy feat. nib is very aware of the challenges that face the more remote communities, not only in New Zealand, but within Australia and the fragmentation that sits within not just the funding model, but the servicing model within those communities. But it's a task that we're really committed to taking on and really helping to achieve people to be in line with our purpose of your better health. So Rob, I might hand to you just to talk through the example of what we've done in Ngati Whatua in New Zealand and what we're hoping to do in Australia as well.

Thank you, Ros. I might just start with the Maori proverb. And so it goes like this [Foreign Language]. And basically, the proverb says, if you want to know what the most important thing is in the world, it is people, people, people. And I always say to people that we're a people business, right? I mean we look after our members, we look after our advisers and, of course, our team members look after both of those groups and our business partners. And that so aligns that proverb with our purpose, which is your better health. So when it came time -- and a few years ago, we had the opportunity to co-create a program with Ngati Whatua, it was all just very natural for us. It was all about looking after the tribe, if you like, Ngati Whatua Orakei, and their people. And so what Ngati Whatua have done with nib is focused on improving the long-term health and well-being of their iwi, of their tribe. And so they brought a comprehensive health insurance program. It's preexisting conditions fully covered, and they're funding the program. And of course, we are bringing to that program all of the things that we kind of talked about earlier today. We bring them product, we bring them services, we bring them access. And of course, we help them to achieve their health outcomes. And importantly, again, when you look at the work that Honeysuckle is doing, we analyze the data, we gather the data. They've been participating in the health risk assessments, and it helps us to predict the risk and then mitigate it in the future. The success of the program, and I think this slide, we had a lot of words today, but I thought the success of the Ngati Whatua program is about engagement. And we've really taken the program to Ngati Whatua. They've really taken it to their people. And so it's very positive engagement. They're thrilled with the increase in access their people get to health care services by removing the kind of traditional barriers, particularly cost and culturally appropriate treatment. It's all about increased interest in education and having people take responsibility for their own health. And when they get a good outcome because we've removed the barriers it's -- it shouldn't be surprising, but people get really interested in looking after themselves and their families. And it's about targeted health care and targeted well-being programs. And so the programs we've embarked on in the last 3 years, it's about screening, it's about different packages, it's GPs, it's about events. So fitness events, health events, education events. And in particular, codesigning with Ngati Whatua, programs that really suit their people. And the one we just launched this year is called the Body Warrant of Fitness. And it's based on the clinical practices that your GP has access through when you go in and see them behind that screen, it's got a little thing and it puts your -- the results of your blood tests and then some of your questions. And it comes up with, I guess, a personalized health plan of what you need to be checked for and when. Well, what we've done with Ngati Whatua has created a Body Warrant of Fitness. It's based on the principle that you get your car checked at least once a year, hopefully more often than that, and you wouldn't think about not doing that and yet so often, you don't go to the doctor until you're really ill. And so again, it's all about their engagement, it's all about co-creation and about measuring the results as we go and adapting the program as we go. So we're pretty excited about that. The future we see with this program is to take it to other iwi. We have an iwi that signed up to start with us on a pilot starting in December. We have about a pipeline of 5 or 6 others that are really interested and will go down this route, and we're having some very fertile discussions because of all the changes in the public system created by the government's announcement about changing the DHB and the public health structure. We've been having some very fertile discussions between Ngati Whatua, the DHBs and other tribes about a program where we become an active part, the DHB commissions, the tribe gives them funding and they commission us as their agent to go and source the services that suit the tribes' needs going forward. And so when we talk about -- this is a pilot, not just for New Zealand, but also for Australia and other regions. It's all about how can we support the health and well-being of communities and how can we work in partnership with the public system and with other providers to deliver health care services. And so as we talk later on this afternoon on what Honeysuckle can bring, they're a key part of this in helping us to do that in a very informed, a very targeted and very efficient way. Thank you. And Ros, back to you.

And Rob, the addressable market of iwi in New Zealand is about 750,000?

Yes, it is. Yes. And we've got a very good prospect pool that's a reasonable chunk of that.

Thanks, Rob. I think now we'll open for any questions. There's one question via the online platform from Sid at JPMorgan. Is there any evidence you can point to in the U.S. or in New Zealand Healthscope Northern Beaches or Garrison, where the private health insurance system can provide better clinical outcomes at a lower cost than the public system? The U.S. in particular seems to have a very expensive health care system by global standards.

Look, there's evidence everywhere of improved health outcomes amongst Medicaid populations in U.S.A., something like 1 in 5 Americans are now eligible for Medicaid and courtesy of Obamacare. So I won't try and cite the various research that supports that. But you can look beyond the U.S.A., Ribera Salud in Spain is another good example of public-private partnerships, where the evidence is quite compelling as to improved health outcomes. Even the programs that we're having in the marketplace, and Rob will talk more about this further on, are showing clear signs of improved clinical outcomes for people. So I don't think there's any doubt as to the attraction of actually identifying people who are at risk and then intervening with them and their doctors. We're not trying to displace the doctors with services and products and support to improve our outcome. I don't think anyone is having that debate. It's just really a question of who's most capable of doing it and how do you actually finance it.

Mark, can I just make a comment here as well? If I look at Ngati Whatua, 2 really good examples in the last 18 months, where because of targeting and because of access and engagement, the screening rates for both breast cancer and bowel cancer compared to the national average have been -- the breast screening rate of the cohort that's due to be tested is 90%. And the bowel screening testing rates are double the national average. And traditionally, Maori have been behind for a whole -- access one, culturally appropriate engagement the other. And so that's got to lead to earlier detection and to better outcomes, long term.

Yes. And look, just to make a point about precision, I think it was Norway, it was one of the Scandinavian countries who, after several years of providing free aortic aneurysm checks, stopped it a couple of years ago. And they weren't worried about the cost of the checks, they're worried about the cost and harm being done by false positives. So most people, just like for men -- most people will probably die with some sort of aneurysm in their heart, but they won't die of it, a bit like men with prostate cancer. So it's really important that where you do intervene, it's on a risk-based approach. It's precise, that you know it's warranted, it's necessary and that, physically, there's going -- it's going to be sustainable, that the money you invest in removing the aneurysm or the prostate cancer actually makes sense because there's a real risk of the patient being harmed.

There are no further questions on the online platform, but we'll just check for the teleconference.

We have no questions on the phone.

Okay, which takes us to organizational capabilities. So our plan is -- as is written here, we continue to develop talent and advance technology across our peers -- group calling out distributed working, which I think is probably an area we're being quite progressive in. I'm quite certain 3 years from now, we'll look back and wonder what we're thinking in certain elements. But so far, it's proving very successful for the business and our people. And of course, technology is acknowledged as our key competitive advantage in a way we're illustrating today. We have ideas that ultimately, if we become sophisticated enough, we provide services, business services to other clients, especially smaller health insurance. So I wouldn't call it a Trojan horse approach because we know what the Greeks did to the Trojans, but I think you get my gist that if we -- a lot of these small funds simply haven't got the capacity to invest the way we have in member services and travel services and technology and data science, that they will ultimately require for their members. So I'm going to hand pass to Marty for some comments.

Thanks very much, Mark. For all its challenges, COVID-19 has presented a unique opportunity to us to rethink old world practices and also design principles, and ultimately, redefine the way we work at nib. We spent time planning and consulting with our people to better understand how they like to work and how we can best support them do that in a safe, effective and productive manner. So we've introduced a new flexible way of working called Life at nib. It encourages our 1,200 strong workforce to work from home primarily and only come together in person at local office hubs for a purpose, such as meetings or social events. To help facilitate this, our employees are also supported by a $1,200 annual distributed work allowance to contribute to the reasonable ongoing costs of working remotely. Life at nib, as we've tagged it, is a direct reflection of what our people have asked for, providing the flexibility they need to be their best selves at home and at work, serving our members and travelers based on their personal preferences. We intend to maintain a smaller physical presence with office hubs across our core locations, where our people can attend for designated purposes like training, team meetings or social events, for example. We're very conscious, however, the past 18 months is not reflective of the norm with varying lockdown and restrictions across our key operating locations, and it has impacted our employees' ability to come together regularly. We'll be constantly tweaking our approach to this to ensure it is fit for purpose as restrictions are easing across our locations. Life at nib has also provided our employees with flexibility and choice about when and where they perform their work. And this has also helped us attract new talent to the business. For example, our employees can come to an agreement with their leader on what works best for them in terms of hours and location. For example, one person might like to start work earlier so they can do the school pickup. For another, it might be to suit to work later so that they can be active in the morning. We've also implemented various health and well-being initiatives to ensure that nib employees continue to keep on top of their health at home. In the past 12 months, we've learned that just having mental health and ergonomics resources available isn't enough and creating proactive internal campaigns that leverage a range of communication channels and formats has the most impact. So we're focused and continue to focus on delivering experience that foster connections and camaraderie across the nib group like physical challenges, panel discussions, town hall and body programs. But to maybe best bring this to life, we've asked some of our employees to share their experience in the video, which I'll ask to be played now. Thank you. [Presentation]

Thanks, Mike.

Over to you, Brendan.

Thanks, Marty. And that's a good segue in terms of some of the digital pieces there. So Matt and I are going to tick tack a little bit through this section, sort of partners in crime as it relates to digital enablement through the business, having formed the business services function within the group, I guess, 18 months ago or so now. So I'll kick us off, and then I'll hand over to Matt. So I guess this slide here, really -- well, really endeavors, I guess, to bring together some of the pieces that Edward covered with you earlier. Really, in terms of -- I guess we're moving away from a primarily FSI or PHI related tech strategy. And obviously, the business strategy evolves, and tech strategy evolves with that. And this slide really is just intended to bring to life this ecosystem that we're building. Rest assured, we have no intention of trying to build all this. So it would be very easy for a technologist to sit here and sort of say, well, let's build this component, that component whatever, where we do see ourselves spending a lot of energies on the interoperability and bringing together a collection of services or this ecosystem as we define it to really bring to life our P2P ambition. So I won't go into each of the boxes because I think Ed's covered that with you earlier. But interoperability is certainly a key piece of how we see this playing out. And of course, I'll cover our underlying tech strategy as it relates to the dominant part of the PHI business in a sec. If we can go to the next slide. Sorry, back one. Sorry. Thank you. So really what we're trying to just bring to life here is around some of the investments we've made in digitizing payments. It might be a bit cliche to say, but certainly, we don't see ourselves as competing from a customer or a member-centric experience point of view with our competitors. So yes, it's a large industry. It's obviously a dynamic industry in terms of offers, products and services and that sort of thing. But where we see our investment in digital is really bringing to life what customers or consumers expect outside of our industry, and this is no different to that. So here, we have a couple of examples of some of the work we've been doing recently around land pay, on pharmacy and pathology. I wont go through the dot points because you've got the slides in front of you, really, looking then into Apple digital health insurance card. So this was a big win for the business. In New South Wales, at least, unlike Victoria, which Nick reminded us yesterday, but you can pretty much carry just your digital wallet now, if you like. So being able to get that health insurance card along with your license along with everything else that a member or a customer may have with us into your digital wallet has been a huge win for the business. And so you can see there are already 106,000 cards installed digitally. We would see that number grow exponentially, I would think, over the next 12 months, particularly post lockdowns and that sort of thing. Future of Whitecoat. Most of the people on the call would be well aware of our journey with Whitecoat. So we sold CBA in May. That business will, we think, go from strength to strength now in CBA's hands. There's obviously a huge network, in fact, an opportunity to build scale from an industry point of view. We're still actively involved in the business as are a number of other PHI insurers. And you can see on the right-hand side there some pieces where we think, ultimately, that helps bring to life for consumers, what the book process will look like. So it is a life cycle. We've talked for a long time about sort of that find or search, book, pay, review, and we want to continue to provide that life cycle as part of the member's experience through the health system as they navigate it. If we can just go to the next slide. I could spend all day on this, but I'll tell you I won't. But look, it would be remiss to being not have cybersecurity at the top of this. It is one of the highest rated risks in the organization. We're growing our spend or our investment in this area as the slide says about 22% year-on-year. At the moment, I see that continuing. The bar is rising at a phenomenal rate. We're seeing across various aspects around cyber insurance and around the regulatory bar. Yes, CPS234 in our case, but it doesn't matter what jurisdiction you're operating in, that continues to rise. So huge focus on that. And I know we covered this morning the interoperability between ourselves and Honeysuckle Health and how we do identify the data and that sort of thing, so that's quite a big focus on that piece as well. If we just jump through the next piece. Cloud transformation, we've been pretty early adopters. And I think we've shared with investors previously around how we've been early adopters from 2015 onwards. We still have some physical footprint. But the agility and the -- I guess the financial return, but also the dynamic nature of this business and allowing us to really leverage cloud and our investment in Software as a Service and that sort of thing has put us at the forefront of the vanguard of where we want to be on the technology front. We wouldn't have certainly been able to do some of the pieces we've done had it not been for our investment in cloud, and I think that's served us very, very well. If we just jump through -- look, the main point here, I think, on Technology to Transact around our core strategy here is that we're not going to be the PHI in this industry that has legacy platforms that's going to go and spend $200 million or $300 million or $400 million on transforming them. Our hollow out strategy or digitizing the core, as we call it, has really been quite successful in avoiding the need to spend those big lots of capital to go through those 2-, 3-, 4-year transformation programs that sometimes don't see the light of the day but sometimes do. But that certainly bogs the organization down in a sort of a time morph for those 2 or 3 years, 4 years, whatever it is, that they go through those programs. So we're hollowing out. We're bringing capability around the core and looking at investment in payment platforms and other member-centric activities, our digital assets, mobile and the like. Can we just keep jumping through. Mental covered a little bit as well, but with a big focus on CRM, really moving from a policy-centric organization to a customer-centric organization. We've grown up as an insurer. Therefore, we're quite policy-centric. Obviously, our values and our beliefs in the way in which we hold ourselves with our customers is that we want to be customer or member-centric, which is reorientating the tech strategy to support that through the rollout of things like CRM. Mobile. Huge focus on mobile. We're investing quite heavily in that space. Our engagement in mobile is up about 40% year-on-year, which we're very, very pleased with. And if we just jump on the Workplace of the Future. Marty has covered a bit of this, so I won't spend too much time here. We are looking at some tech to support Marty and the team and the leadership team generally around how we -- I guess how we bring to life this hybrid working. How do we provide some tech to provide this employee pane of glass into the organization so that we can create opportunities for people to collaborate and connect and how they interact in a more distributed model. So watch this space on that. And I guess the other part of the point here is that when COVID did it, it wasn't a massive issue for nib. We did see obviously some adjustments, some pivots, but generally speaking, the tech strategy was quite contemporary, and so it allowed us to get out of offices quite quickly, including our call centers and outsourcing. Last point there is the war for talent. You certainly don't have to be Einstein to realize that we are in a huge war for talent in the tech market at the moment. It doesn't know who you talk to. Everyone is in the same boat, coupled obviously with the lack of international workers. But when that ends, I'm not too sure, I'm liking a little bit the property market at the moment. We're doing everything we can to attract and retain, including leveraging the distributor working and what we call life at nib to really look at where we can attract and sort of base our talent in areas where certainly we wouldn't have had people in the past, so we're looking at all options. Okay. I'll hand over to Matt.

Thanks, Brendan. Just building on what Brendan said, we brought together all of our operations there is about 18 months ago and created the new division, the Business Services division. So that has largely been stabilized now. So we've integrated all of our contact centers, claims, digital and our customer experience functions. And at the quarter that was to create a more standardized operating model, manage costs in a much more efficient way. But at the heart of that, as Brendan is talking to is a very sharp focus on digital and automation. So I won't read through each of the 5 pillars there. You'll see some overlap with what we've been talking to you about just that Brendan and Marty have. But clearly, the workplace of the future, I've now got frontline employees that are able to work in a much more distributed way, in a much more flexible way, really, building on that life at nib and leveraging the model that we've got there. Our employee engagement and productivity, we've seen working exceptionally well throughout the COVID life at nib and then ongoing. We expect that to continue to be able to attract and retain the talent at all levels of the business. Brendan talked about some of the payment platforms and automation capability, and I'll touch on it a little bit more shortly. But our ambition is to continue to invest very heavily and focus on automating all the simple transactions so the customer effort is quite seamless. So the investment in the benefit management platform and our shield rules for claims, Brendan mentioned our core CRM through Salesforce, so we're midway through rolling that out across the business, and that will create a single view of customer integrated desktop for all of our frontline agents to be able to look after customers in a much more proactive way and be able to preempt what they are doing in each of our core channels as they go forward, whether they're switching from an online channel or having to call our contact center. We're also investing quite heavily in robotics and machine learning, and I'll touch on an example shortly. At the heart of that, though, we do have an ambition to be #1 in market NPS across the PHIs. And thankfully now, I've actually got teams that are quite scalable, so we're able to pivot quite quickly. So in the 18 months, we've been able to manage peaks in demand through lockdown and travel restrictions in our travel business. I've been able to then pivot those frontline employees to support health and vice versa. So having that integrated model has certainly benefited. Overall, we're continuing to focus on operational excellence and a lot of lean focus to take out waste. And we've seen some really good results over recent times. And Mark mentioned one of our core ambitions into the future is not just to look after nib members and customers but to actually start to grow the capabilities outside of nib. So now that we've got the integrated model, we really see that that's a good opportunity into the future. I'll just touch on one example of automation on the next slide. This is our chatbot and voicebot, a real deep focus on automation and robotics. We partnered with both AWS and Rasa. You see there, on the right, an example of our chatbot in action. So we actually launched our chatbot in 2017, and it's been the fastest-growing channel year-on-year, so 33% improvement. And most of those interactions that customers come through, 65% of them are actually resolved on the spot and it's the highest NPS of all channels. So we're looking at leveraging and growing that channel. Customers want to deal with us via this channel rather than our contact centers. And we also have transitioned our retail network out now. But recently, we've also have launched a 24/7 voicebot. So rather than contacting us through traditional means and hitting an IVR in our contact center, you actually are able to talk to an automated voicebot 24/7 when you contact nib. So the first interaction is a digital interaction. And then if the voicebot can't solve it, it will move you to either self-service or into a -- a human into the contact center. And the results sort of speak for themselves, you can see them on the screen. So I'm pretty proud of just those recent examples, and we're continuing to invest in that ongoing. So you can see more and more of that. With that, I might hand back to Mark.

Thanks, Brendan, and thanks, Matt. Hopefully, a few of those slides just are evidence of what could be a compelling proposition for a number of the smaller funds. I don't want to overstate it, but in almost 20 years of talking to these smaller funds, money doesn't get the job done, [indiscernible] doesn't seem to be able to get the job done. Self-interest is just so powerful. Perhaps seeing a comparison between what their members are able to source as a small health fund without the sophistication and the technology that we have and what we could potentially deliver for them may yet make a difference. Time will tell. Questions?

There are no questions on the online portal. We will just check with the teleconference.

There are no phone questions.

Okay. Well, we'll finish off on this slide just before the lunch break. So look, what gets measured gets done, and it's part of our Credo. Our mission, our purpose in life is your better health. So we believe it's important to set ourselves some health outcome targets and measures as it is for commercial indicators. I'm not going to try and calibrate these, and we're currently recalibrating a lot of the commercial performance indicators in light of our fiscal '25 vision. So expect to hear more about that at the half year results, and thus, putting some more definitive numbers in place. In respect to the purpose performance indicators, we've had a lot of long discussion and debate about what's most appropriate. Obviously, we want to keep the scoreboard to a sensible size. So you'll see we have 5 commercial performance indicators and 5 purpose-led indicators. A few of these are still under development. So if you take the top and bottom ones, which are really measuring sentiment and behavior, we're relying on a couple of international recognized survey platforms to produce some numbers and targets, their platforms, which allow us to -- because it's scalable, the data is reliable and meaningful. But importantly, they will also allow us to compare our performance against other health care providers or health care systems. Prevalence of chronic conditions for 1,000 members speaks for itself. Obviously, we hope to improve on whatever that number looks like, recognizing as we get better and better at identifying disease that could jump up in the early stages. Member engagement with health care management services is just a pure quantitative number. We'll talk more about that when we get to Honeysuckle Health. Obviously, under our P2P strategy, we want more and more intervention across our membership based upon the risk profile of those members. And of course, hospital admissions per 1,000 members also speaks forwards. So there the performance indicators that we have landed upon, very much supported by Board. And as I mentioned at the half year results presentation, I guess, in February, is it Ross, we will flesh this out a little bit more. So unless there are some questions or no?

Yes, we've got one question on the online platform from Nigel Pittaway. How much is the increased war on tech talent increasing cost pressures?

Nigel, I mean it is. There's no doubt. So I mean, depending on which journal or online story you read, salaries are up somewhere between 20% and 30% for some roles, and I think that's the important thing. There's definitely some parts of the industry that are up. In our business, I guess, we're probably up somewhere between probably 5% and 10% on salaries and wages within my cohort. But the other thing I'd say is that we have been fortunate through our distributed working policy in life that we touched on earlier, to be able to tap into some markets where perhaps ordinarily, we wouldn't have been able to see that workforce will afford an opportunity for that particular individual or employee. And yes, sometimes that means because those people are individuals aren't in the metro market, they're happy to join. They've got great skills. They've got great talent, but they're rural in New South Wales or they are somewhere down in the bordering between New South Wales and Victoria or something like that, don't want to travel, but happy to come on at a more measured or median salary, if you like, rather than a top end metro. So yes, it's up but we're trying to manage it as best we can. And Nick keeps to be honest on the financials as well.

To be a bit like what will I put in expense growth in my model-type question. I think what we've got offsetting is also, as Matt has touched upon, the benefits from the centralization of the Business Services group. So we do have benefits flowing through from that. And also, we do have benefits of our distributed workplace strategy in terms of property savings and so forth. And what we found with that is we've been able to, I guess, not only assist our staff, pass some of those benefits back to our staff but also some of those have been recycled against the pressures that have occurred in Brendan's area and also in projects area, in general.

Yes. And I guess, while there are limits to our tourism, I think there's a vision and purpose element here, too, Nigel. Like, he cares about building the metaverse, if you can have the rate of diabetes in a regional outback communities. So certainly, it suggests to me we need to communicate our purpose to prospective employees and engage them with them, hopefully, get them excited about the possibilities for them to make a contribution.

There are no further questions on the online platform or the teleconference.

Okay. That being the case, we'll break for lunch, and we'll be back here. Hope you can join us in 30 minutes. Thanks. [Break]

Hi, everybody, again. Thanks for sticking with us, for those of you who are still there. When we started thinking about this Strategy Day, it was really just about to inform investors about Honeysuckle Health and what it's about and everything we're doing. But then we realized well, look, it needs context, and that context is everything we covered this morning around personalization, P2P and technology. And as I explained this morning, Honeysuckle Health is the investment we've made to try and bring that to life. Probably the thing that most influenced us is that in order to embark on the transformation of the significance that we're attempting, we really did need to set up a separate outfit, put the best people we could find in the business and find a partner who had -- who's been there, done that, so to speak, and that, of course, was Cigna. So the rest of those is about Honeysuckle Health. The role it's playing in helping us in our ambitions and transforming the company. But importantly, its a genre in terms of having a much broader role across the health care system, starting with nib, but hopefully, already with additional clients. So we have here today, Rhod McKensey, who used to run Australian Residents Health Insurance business for many years. Rhod's been in the role now for coming up 2 years, I want to say, Rhod. And I'll have Rhod take you through his presentation, introduce some of his key people here today.

Thanks, Matt. I'll start with introducing my team who are all sitting with me. So I think the camera can pan with me, but I've got Katharine Barrett, Head of Commercial and Partnerships; Misael Valdes Triana, that's with my best Spanish accent, our Head of Health; Felipe Flores, Head of Data and Technology; and David du Plessis, who is our Head of Health Services contracting. I'll do the majority of the speaking, but any of the questions that we get at the end of the presentation, then I might throw to some of my team to help answer them. So if we just go to the next slide, so I can kick off. Thanks, Rose. The strategic rationale for the business is, I think, pretty evident to our investors or nib's investors, and we've been through this before that the Australian and New Zealand health care markets are both much larger than just the health insurance components of those markets. So our best estimates are Australia spends about $200 billion annually on health care, New Zealand, about $26 billion. And so there's a big opportunity to play a more significant role in both of those markets. Both of the markets are rife with a significant level of inefficiencies that you've heard Mark talk many times about before. Those efficiencies take lots of different forms, but they can be preventable hospitalizations, high prevalence of low-value care, variations in costs and variation in treatments, and we'll come to some of those later on the presentation. And as we've spoken about before, we're starting to see this beginning of the transformation of health care from one-size-fits-all to much more personalized and precise forms of delivery of health care, and we're very much looking to play a part in that. And that transition has been enabled by the use of data science. So data science is being used in many, many different industries. And we're now starting to see the power that it can play in health care, and we'll also talk about that later on. So next slide, please. Our vision for the company, Honeysuckle Health, is ambitious. This slide talks about that vision, and I've found that is best presented as a clock. So the division for Honeysuckle Health started off at 9:00 as a data analytics company. And the original vision was that Honeysuckle Health would support nib in its pay to partner, Quest, and specifically help with personalizing the services that nib could provide to its members. So the idea began that we would have a business that specialized in analyzing data and using best practice data analytics and big data to provide that service. But as the thinking emerged, and we learned that we were going to need a partner to support us in that quest and that partner led us to Cigna. We expanded the division to then include what's at 3:00 and 4:00 around care delivery and care support -- so probably care support and post care was the next step, and that was in the form of telephonic health management programs that we saw as the second part of the capability. And then from there, we expanded again to 3:00, which is around care delivery, which has taken more of the form of health services contracting, which is a function that David leaves, where we're now contracting on behalf of nib with hospitals, with medical providers and with allied health providers. And we're looking, of course, to offer that service to other health care payers. From there, though, we've also expanded the vision to include 1:00 and 2:00 pre-disease and well-being in lifestyle. We see services such as digital health programs that help people stay healthy like all these other services that help diagnose and there to maintain their condition, the digital health record as well as what we're calling as smart health risk assessment and good health plan sit within the prioritization well-being of all those sectors. And then as we've developed the business, we've learned that we also need to provide other services that are the 11:00 and 12:00 advisory and business processes. So we've learned that we need to help businesses with their own health management strategy providing consulting -- health consulting as a service. And in business process, we've learned that we need to get good at activating, engaging members to -- in improving engagement on their own health and that's largely process-based as well as building our own capability in -- particular in [indiscernible] health cloud and in other digital capability. And the one that I haven't mentioned that's still unclear for us is pharmacy. Ed spoke before about the emerging markets for pharmacy home delivery, which is a big trend around the world and no doubt will happen in Australia and what role nib and Honeysuckle Health play in that, we're still working out. And medication adherence will also be a very big opportunity to improve [indiscernible] that we're working where Honeysuckle Health and nib play a role. So next slide, please.

Feels more like a ricocheting bullet in the clock.

Right. Thanks. So our principles. The principles on which Honeysuckle Health's been established. The first is that we believe very strongly in making greater investments in prevention and primary care. And the evidence all around the world that if you want to significantly improve the health outcomes for any particular population, you need to invest in both of those. And that will mean putting practitioners -- general practitioners at the center of care delivery. So there's been some commentary around what does nib and Honeysuckle Health see as the role for general practitioners. But very clearly, our principles and strategy is to work more closely with GPs, to help them invest more in preventative care, provide better tools and services to enable them to provide better overall care to their patients and keep people out of hospital. So we're looking very actively to partner with the GP community. We're focusing on value-based health care, which if you've read any of my commentary around ACCC submission and more broadly in the media that attached to that, we -- this is not a new concept, but it's emerging in its application around the world and moving beyond paying for activity but actually paying for value is a big focus of our business. And across all of those, we're focusing very much on using data science to inform decision-making. And I'll talk to each of those principles and how we've applied in the business later on in the presentation. So next slide, please. So the business lines that we have align with our business functions and the ricocheting bullet that Mark teased about before. So we have 3 broad capabilities in the business. The first is in health care analytics and artificial intelligence. So we're applying that at the moment in health program measurement and evaluation, in provider benchmarking and in health care consulting. But of course, it's a broad skill that has broad application. Our second capability is in health care programs or health programs. So I'll talk about later on the programs that we deliver in-house, but we also then manage on behalf of our clients. Obviously, our foundation client nib, but we hope other significant clients in the future. And the third level of capability that we have is in health services contracting. So David's team contract with hospital providers, medical providers and allied health providers on behalf of nib. We've been very vocal and proactive in our strategy of becoming a buying group for other health care payers. And we have one client that we're working with in the workers' compensation space, who is our second client beyond nib. Of course, we're very intentional to building that and becoming a broader buying group. Next slide, please. So I'll talk about each of those functions in more detail now. So health care analytics and artificial intelligence, as it is on the slide, as I've hopefully already made clear, this function is both the service that we offer in and of itself, but it's also an enabler for our other business functions. The team is currently 12 in size. On that team, we've got 2 medical doctors. They've done their medicine degrees. They're looking now to specialize in various specialties. They've realized that for them personally, they both have backgrounds in technology, that there's an opportunity for them to use their skills to impact health care for many people rather than one-on-one, which is the traditional process in medicine. And both of them are trying to have a dual career where they're working both on the clinical side as well as the data scientists within our data science team. As I've written on the slide, the team is doing genuine data science work, and hopefully, that's not cryptic. But what I've learned is that there are plenty of analytical companies or analyst departments who are doing pure analytics, presenting nice dashboards and using Excel, which is distinct from what I've learned from really applying data science and big data and machine learning in practice to make better predictions and create better insights and have those insights and predictions become a virtuous cycle. So I'm very confident that under Felipe's leadership, we're doing real data science work that's proving valuable, which I'll hopefully demonstrate in a moment. The key capabilities across the team, data management and preparation. For those of you who've been around data, that's data wrangling still, the heavy lifting that has to occur in any data science or analytics area and having strong capability in that area is essential. Health program targeting and health program evaluation have been where we've applied Felipe's team very directly and actively over the last 12 months, and I'll talk more about that later. And provide a benchmarking, we also see as a capability that supports the health services contracting function, but also as a capability that we're looking to offer to other health care payers and providers as a value-add service. Next slide, please. So I'll talk a bit more about health program targeting and evaluation. So I'm not sure how we're going for time, but I can slide in a bit of it, I think. The health insurance industry has been offering chronic disease management programs and other forms of health management programs since about 2007 when the legislation changes code for the health card were introduced. Since then, lots of health funds, including nib but certainly all the major health funds, Medibank, Bupa, HCF, HBF and pretty much all the industry have invested in those programs. The issue has been that there's been a lack of confidence as to whether those programs are effective. And that has led to a lack of scaling up of those programs over time. So the investment in health management programs in the health insurance industry has been relatively stable and arguably at a low level for the last 10 years.

And the risk equalization is why as well?

Yes, absolutely. There's other reasons that have hindered that growth, including risk equalization and kind of a bleeding or leakage of the benefits for those programs to other health care funders, particularly the public sector. But one of the key capabilities and key activities that we've done since first launching the business has been to apply the data science capability to evaluating the impact of the health management programs that nib historically invested in. So to do that, we've invested significantly in building the IP to do that, using a data science technique called coarsened exact matching. We have invented that technique, but there is a nuance in how it's applied and certainly some experience that has to be built up to ensure it's applied effectively and accurately. Once -- this exact matching technique can be used to create a retrospective control group to any population or any group that you'll then applied an intervention to. So once you've established a retrospective control group, you can then evaluate outcomes between the 2 groups. And so we can evaluate health outcomes, we can evaluate member experience outcomes, commercial outcomes and member retention outcomes, but equally, you could evaluate any other outcome between the 2 groups. And that's allowed us with confidence, and I'll talk about this a bit more later, to understand which health management programs that nib have invested in have been effective and which programs have not been effective, but more importantly, how those programs can be more effectively targeted. Please -- I think the last section on the slide, we can then use that capability to assist any of our partners, starting with nib, to selectively target, better target programs and target members who would suit programs, inform future program selection, understand the overall impact on the population and measure the overall performance of the program. And we can talk some more about that in the later slides. Next slide, please, Rose. Provider specialist and specialist benchmarking. We also see as a capability I mentioned before, that we are building for -- to support our health services contracting function, but we also want to offer as a service to payers and providers. There's certainly opportunity to work as a broader industry to share outcomes data as well as other benchmarking data to improve the focus on quality. So we've -- I'll demonstrate some of this capability in a moment, but we certainly see that capability being used to inform negotiations, to allow data to be compared across different purchases for differences in behavior from providers and payers. I think Mark's long talked about, and I've long been a passionate advocate for collecting patient-reported outcome measures and then using those to direct or help members ultimately choose providers who achieve better outcomes. And we'll talk more about the maturity journey that we need to go through to get there. I think there's been a question on that previously. And certainly, our vision, along with nib is to collect patient-reported outcome measures much more holistically and engage with any other health care payer or provider who also participate or shares that vision. So on the next slide, we've got a detailed slide showing just one example of the capability that we've built. Credit actually goes to David, who heads up our health services contracting team, who are actually building this dashboard. But I mentioned that, a, to get credit to David; but b, to show the capability that we've built within our data science work bench that enables anyone in the business, well, not to say I don't think anyone is probably a bit of a stretch, but someone with David's level of skill to build a dashboard that enables high-quality analysis. So if I quickly walk through this dashboard, the focus of this dashboard is to show the variation in ICU conversion by hospital and hospital group. Now one of the key points of difference that we see as a buying group gives a focus on value-based contract and the use of data science as opposed to just focusing on price. You can go into a hospital and just negotiate a price for an ICU stay per day for a fee on accommodation to support a knee replacement, which will [ have a particular fee then ]. And that's a good and valid exercise. But the behavior that exists beneath the surface is also important to make more transparent. And one of those behaviors is the use of ICU. And the hospital will earn much more revenue from an ICU stay. Of course, it's appropriate in some cases, but as I spoke about at the very start, there can be significant variation in the use of ICU and other behaviors. It's difficult to explain by underlying acuity. So that's the -- probably to the slide. What the slide actually shows down the left-hand side is you can't read all of it, but it's nib Charlson, and that's a measure of acuity, which is the Charlson index. Then the column just to the right of that is for an individual hospital group that we've selected that they identified. And so the first comparison is the nib Charlson score of 2.30 versus the group Charlson score of 2.26, which basically says that the hospital group we're looking at is slightly lower acuity than the nib average. And so you wouldn't expect to see any difference in ICU conversion based on that difference in acuity. But if I jump down to the second from the bottom, the nib conversion to ICU of 3.2% means that for every 100 members who go to hospital, 3.2% of those end up in ICU compared to this particular hospital group, where 6% of members who go to hospital and hospital group end up in ICU, and that's quite significant. And I won't get to the whole slide in every box, but the middle group of charts on the bottom of -- it says critical care conversion, shows individual ICU conversion by hospital within that hospital group. And there's one hospital at the far left-hand side, it has an ICU conversion of 20%. So for every 100 nib members who go to the hospital, 20 of them will end up in ICU compared to the nib average of 3. So the proof of this -- bench of this dashboard is to have a conversation with the hospital group about that to better understand the behavior, to see if it can be explained by other factors other than hospital behavior and hopefully work to bring that conversion more back to the norm. Probably stressed the point too much, Dave. Anything you want to add on that?

Look, probably the only thing I'd add to that is that sort of the really good useful analytics in the provider space is directionally where is the outlier behavior, and I think being able to take it from a group level and be able to see this particular group obviously has behavior that just doesn't match obviously as normal. Being able to drill through, then look at the distribution across the group in regards to individual hospital behavior then allows us to sort of target that a little bit more. But fundamentally, then bringing that down and having to look at things like the procedural level and understanding where that's being driven just allows you to have really targeted focused conversations with providers and be able to drive then changes in behavior. There isn't always a categoric outcome of this being bad provider behavior. But when we tend to look at behaviors around things like low value care, what we tend to see is that you have significant variance. And if we were to use this type of information to look at something like a major joint replacement or knee replacement as an example, you'd expect about 4 people in 100 to go through to ICU. That's sort of based on international literature, what we see international averages through the group. And we've got some providers and some hospitals that will have 75% conversion through to ICU. That's a really big question mark as to why that's occurring. And one of the major challenges we have in the space is that funding does inform the behavior. And if you've got the funding mechanisms wrong, then you can have behaviors that are not necessarily causally linked to clinical care but more associated with revenue generation. So this allows us to have the types of conversations to start really moderating those behaviors, understanding the underlying intent behind putting contracts in place that allow us to work with the provider to remediate that over time.

Yes. Thanks, David. And the last point I'll add is part of our vision is to be able to offer this kind of capability as a service to both other payers and other providers to be able to compare variation in outcomes and behavior by payer and by provider and then hopefully work as a coalition of the willing to improve the overall value of the care that's being delivered. Next slide, please, Rose. I have for you this complex slide but equally important. I touched on some of this before, but this -- we're trying to demonstrate here the feedback loops that we're using to improve outcomes. So for any health care funder and we started with nib, we think the right place to start if you want to improve the health of a public population is with an overall health management strategy. So we used our data analytics and consulting capability to construct that along with nib in the first quarter of calendar year 2020. From there, we developed a suite of recommendations, which included which kind of health management programs nib should bring to its members to improve their overall health and to improve the overall -- that reduce the benefit outlays that nib was incurring. Importantly, we started to introduce then data science to target those programs at the people who are the most likely to benefit from them. That targeting was informed by historical work that we've done on evaluating prior programs, but we built within Felipe's team, a number of different algorithms to then more effectively and more specifically target the members from nib who would benefit from those programs. We then start delivering the program. And of course, we're monitoring and measuring just as -- with just as much scrutiny of the outcomes that those members are achieving, both from a health and cost perspective, which is the program measurement piece. But importantly, this is where the feedback loops come in. Now with machine learning, we can then continually, based on the outcomes that members are experiencing, update the algorithms to improve the targeting of those programs so we can get more and more specific and more and more accurate as to who's likely to benefit from those programs. But that will also inform through the evaluation, whether our health management strategy was right in the first place and whether the list of programs that we have recommended and are managing on behalf of the funders who are working with us are appropriate. So we think it's a really key value-add that we can create for payer clients, and a capability that doesn't exist at the moment. It's no fault of an existing health management program provider that they aren't providing the service. At the moment, an existing provider who might offer an osteoarthritis program is saying we think this program will benefit someone who has osteoarthritis of the knee and has a BMI over 30. And that is the very broad selection criteria that they will recommend to the payer to apply. There's no criticism event because they don't have the downstream information to be able to evaluate their program and understand whether those criteria were the right criteria. So with our closed-loop access to de-identified nib data, we're able to ensure we do have that closed-loop process and apply that evaluation ability to improve the program targeting and have much more specific and detailed selection criteria that's done at a very personalized level, which is absolutely aligned with the nib vision. Hope that makes sense. It's difficult to judge in a Zoom meeting whether people are getting my point, but I'm happy to take questions on that later on. Next slide. So I'll dive now into some of the health management programs that we have built under Misael's leadership. So Misael is ex Cigna, has worked in a number of different environments in the U.S. where health management programs are much more mature. And so we've been leveraging the expertise from Cigna's primarily U.S. business, but internationally as well, and of course, using Misael's personal expertise to establish these programs. So we now offer -- well, 4 arguably 5 health management programs, telephonic programs in-house that we have built and are staffed by our own registered nurses who are employed by Honeysuckle Health, and they have deployed on our own technology using Salesforce Health Cloud and Amazon Connect as the main applications to provide the program. So those programs, a hospital support program focused on people who've just been to hospital or about to go to hospital with the goal of helping them to recover as effectively as possible, and in particular, avoid being readmitted due to complications from the surgery. A mental health derivative of that program, which is staffed by specialized mental health clinicians. I think most informed investors of nib would know that mental health is a particularly sensitive and acute area where readmission rates are very high and providing support for members who've just been discharged from an admission is really important. The last 2 programs are care support program and mental health care support program, both longer term in nature and focused on members or health fund members or other population members who've got a number of chronic diseases and who we believe based on our data science would benefit from clinical coaching to, first, in some cases, develop a care plan and then more importantly, to adhere to that care plan and improve their overall risk factors to hopefully avoid downstream complications and admissions to hospital. So there's the main program around -- on care support, which focuses on all chronic diseases other than mental health as a primary diagnosis. Although I think it's important to note that many of the -- I think the majority of participants in that care support program do have a mental health diagnosis as a secondary diagnosis for their other chronic diseases, but we also have mental health-specific care coordination program. I'd say 4, maybe 5 because we also now offer an injury support program that we're piloting with a workers' compensation client, which is focused on helping injured workers recover from their injury as quickly and as quickly as possible and then get back to work as quickly as possible. We are -- I think the important nuance of that program is it's providing a separation between the normal role played by a claims administrator who works for the workers' compensation insurer and there are nurse who's representing the interests of -- the clinical interest of the patient, and that program is working really well, albeit still a very small scale. So I think the other point on the slide, all of our programs are delivered by registered nurses. They're all designed to accompany and complement the care provided by the GP in no way means designed to be substitutional. All of our programs recommend that our participants have a care plan that's coordinated by the GP, and if there's been -- just had an episode of being back to see the GP within 2 weeks of discharge. They're all, of course, very compliant with everything we need to be compliant within the health insurance space, chronic disease management programs is the particular requirement. Importantly though, we're now also offering the access to health management programs provided by third parties beyond Honeysuckle Health as an additional service. And so we've seen the data science capability from targeting an evaluation but also activation as well as selection of best practice programs as a value-add that we know is important to nib and expect to be valuable to other payers. So we've launched -- we've been quite public about a digital pilot with a company called Limber, which is a digital physical therapy provider. The second part that we've launched with nib is a pilot with SilverCloud, which is a digital mental health provider that provides digital CBT or cognitive behavioral therapy. And both of those programs are still early stage, but we're seeing emerging evidence of their clinical effectiveness. And the real challenge will be around activation and getting members to engage in those programs. And if we have time, I'll talk more about that later. Next slide, please. So a little bit of evidence, I guess, on our health management programs to date. So as I said before, we are bringing our data science capability to bear, to evaluate the impact of our own programs across a whole range of metrics, including clinical outcomes, including cost outcomes and member experience outcomes, particularly through NPS. So the Hospital Support Program was the first program we launched in April 2020, so it's the most mature and longer-standing program. It's also the highest volume program and the shortest duration. So we have the most data on that program. The -- as the slide says, we've had close to 5,500 nib members go through that program. The Net Promoter Score is positive 66, which we're really pleased about. But we're also seeing strong evidence that the program is clinically and commercially effective for the right cohorts. So we are very confident that we can deploy that program to be commercially effective. nib is our foundation client and significant investor, has given us a fair bit of flexibility around the targeting criteria and allowed us to adopt breakeven in the short-term mindset, which has given us the liberty to have the program targeted quite broadly and allow us to learn which kinds of nib members would be most likely and do benefit the most from the program and refine the offering as well. Over time, of course, we intend to narrow the targeting to improve the ROI for nib. But as the slide says, there's a significant cohort of the mental health program to where we're very confident we can see a powerful ROI of up to AUD 266 growth of risk equalization program costs. As Mark mentioned before, there's a lot of leakage in the benefits of this program to other parts of the system, risk equalization, which is effectively leakage to the rest of the industry is one major source of leakage. The other major source of leakage from a commercial perspective is to the public system. So if we keep someone out of hospital and healthier, then they will be going to see their GP less, they'll be going to see their specialists less, they'll hopefully be going to ED less, they'll hopefully be having less public -- admissions to public facilities. The majority of all those costs are borne by the public system, which we're not capturing as a benefit on behalf of our funders of the programs. But our vision over time is to work collaboratively with all the funders, including the public sector to try and internalize a lot of those costs and make the programs more commercially effective and offer them to a broader group. What else did we cover on this slide? So quickly, the Hospital Support Program, I think I've already covered, longer-standing program. It's a -- short in duration. We've got the most confidence given those factors around this performance. The mental health delivered, that program was launched in September last year. The volumes for that program are smaller, probably not unexpected. Activation and having nib members willing to engage in that program is more of a challenge than the Hospital Support Program for probably obvious reasons, even contracting that cohort can be difficult. But the members that we do get into the program find it really valuable as evidenced by the Net Promoter Score of over 80. And then the 2 care support programs we've launched this calendar year, we do see them as having the most significant potential to bend the cost curve in the medium to long term. And as I mentioned before, the real challenge is going to be around activation and engagement and getting people to engage in those programs. Next slide, please. Moving on now to our third area of capability, which is health services contracting. So we took over responsibility for contracting with hospitals, medical specialists and all of health providers on behalf of nib on the 1st of October. We've very deliberately gone down the path of seeking to establish ourselves as a buying group for other funders, including competitors to nib. So we've -- as you're no doubt aware, being through an extensive ACCC authorization process which is continuing, and I'll come to that in a moment, nib remains our foundation client. And of course, we're focused on delivering value to them as that client at the same time as engaging conversations to discuss working with other health care payers. So it's probably obvious to most people on this call, but the areas of activity within David's team are contracting with hospitals. That's probably the majority of activity. There's close to 500 contracts that David's team would manage. They're called hospital purchaser provider agreements or HPPAs. We also contract with medical specialists who'll run no gap schemes and well, no gap schemes for the time being on behalf of nib. And the other 2 areas, well, [ how at health ], we run nib's first choice network which is a less intensive activity to engage with a group of extras providers or allied health providers who agree to charge members a relatively modest fee in return for receiving promotion and extra volume from nib members. The Broad Clinical Partners Program, I'll come to in a moment, but it's one of the most exciting areas that we see within the health services contracting space. And contracting more actively with medical specialists to ensure a better experience for the patients, both in terms of out-of-pocket costs and in terms of confidence around the best practice pathway and a good outcome as a significant area -- we see as a significant area that we want to invest in, in the future. I've got a slide on that in a moment. But before we get there, what do we see as our points of difference? We get asked this question a lot. We -- the 2 key callouts are our focus on value-based care. Very, very big focus in our business on driving to value, not driving to price or driving just to outcomes, but balancing all of those and making the value outcome as transparent as possible. That's not easy in health care, but it's very much a focus for our business. And of course, the use of data science to inform that decision making. Who do we see as our target clients? A broad group of health care funders that are covered at the start. The -- in the short term, competitors to nib, particularly the smaller and midsized funds who already purchased through existing buying groups, particularly the AHSA. But equally, other health care payers, particularly workers' comp and CTP insurers, we're engaging with that group very actively. I've learned over the last couple of years that they are relatively unsophisticated purchasers of health care certainly compared to health insurers, and we see a big opportunity to bring some of the value-based care principles to that industry. Next slide, please. ACCC authorization. So this has been a long road. I'm smiling more to mask the surprise in the level of pushback we've had from provider groups around maybe naively, we didn't expect the significant level of pushback from provider groups in particular that we've had in this process. So as no doubt you're aware, we were granted authorization by the ACCC on the 21st of September, subject to a number of conditions. The condition largely was that we couldn't act as a buying group for any of the major PHIs, and they were defined as the 4 largest funds: Medibank, Bupa, HCF and HBF in WA. HBF is a nuance because they do their own contracting in WA, and they do contract into the AHSA for other states. So we were obviously pleased to get that authorization. So that was written on the slide. The authorization is now subject to 2 applications to the Australian Competition Tribunal by the National Association of Practicing Psychiatrists and the Rehabilitation Medicine Society of Australia and New Zealand, which is also a psychiatry group. So that action has yet to be heard. There's a preliminary hearing in early December. And of course, we will go through that process, and I'll be reluctant to comment further given it's subject to that appeal of sorts, albeit we -- our strategy remains the same and that we remain very much of the mind that we want to continue down this path. Next slide, please. Talking specifically about the Clinical Partners Program because we do see this as an area that we want to significantly invest in going forward, and we do see it as a service that we think will be particularly relevant to other payers and other health insurers. So I can seek application. This is referred to as the Broad Clinical Partners Program. Within our circles, we just call it the Clinical Partners Program. This program started, what, probably 2 years ago in orthopedic surgery and it remains so far only in orthopedic surgery. But the value proposition to date is that we have a small group of atopic surgeons who agree never to charge an nib member an out-of-pocket cost for a hip or knee replacement. They agreed to work with anesthetist who also will not have a charge in nib member in out-of-pocket cost for hip or knee replacement. In return, we pay both the anesthetist and the orthopedic surgeon slightly more than the nib normal Medigap rate. We also work with those surgeons to collect outcome measures to ensure that the outcomes that patients are going through that their treatment is -- are at least as good at the outcomes from any other provider. And we also work with those surgeons to offer them a broader range of post-surgery rehabilitation options, including an at-home model if the surgeon believes and the patient believes that particular model is appropriate to them. So that program has been going particularly well. We are seeing that more and more members use the program. They are getting good outcomes and, of course, appreciate not having any out-of-pocket costs to pay. We are looking to scale that program geographically throughout Australia, of course, in areas that are relevant to nib. But we also see the opportunity to broaden the range of specialties in which this program is offered as well as to expanding orthopedics to offer more conservative options to the patient and ultimately, the surgeon. So we're really excited by this program. Of course, we're looking to work with surgeons who share in our vision and other specialists who share in our vision. We have targeted heart treatment and mental health as the next 2 areas of focus beyond orthopedic surgery. And David's mission, along with some members of this team, is to expand that program and hopefully offer it to other health care payers beyond nib. And David, I think we've got time. Is there anything else you want to talk to on that?

Yes. I think probably just one of the successes of that program is the Australian health care system is a little bit antiquated in the way that it pays medical specialists and doctors. They really are paid for the procedural application of care in the hospital. And what's been really exciting about the Clinical Partners Program is that it shows that health funds can partner with orthopedic surgeons in this instance very successfully and can enable and create the right models of reimbursement to be able to encourage them to be more productively engaged with postoperative care. So that program broadly over the last 2 years, when we first started that with these surgeons, the in-patient rehabilitation conversion after a major joint replacement was 43%, and that's now sitting at around about 16%. So it's exciting to see that change in behavior. And at the same time, nib members have had access to services that they would not otherwise have received, rehabilitation in the home assisted transport and some other technologies and services that the surgeons want to apply to their patients. And it's really about trying to take that vision of allowing the funding to encourage the surgeons to apply care the way that they see best. At the same time, drive system efficiencies and opportunities to make sure that the health care is affordable in this instance by making sure that members don't have any out of pockets. So really exciting area of work, and we just see greater and greater opportunity and more and more interest for medical specialists in this type of service.

Thanks, David. So I think this is my last slide, which is the clients we see beyond nib, we won't be successful as a business if nib remains our only client or our only major client. And so we are very focused on building capability and then working to build trust and confidence with other health care payers that they should access our services and that we can provide value back to them. So the list, hopefully, is self-evident. But of course, health insurers that are competitors to nib, I've already talked about. I've also mentioned workers' compensation and compulsory third-party insurers. If you followed those industries, all of them -- every state is experiencing deteriorating return-to-work outcomes and escalating medical costs in those schemes, which is putting pressure on premiums and the financial viability of the schemes. We think the timing is good for us to be engaging with them because there's emerging appetite to look at innovation in those sectors. And as I said before, from what we're learning, they're relatively unsophisticated payers of health care. The client who we've developed a good relationship with, who operates in the subspace refers to themselves as a [ done payer ]. So their language, and we really think we want to help make them a smarter purchaser of health care. They are genuinely interested in, number one, improving return-to-work outcomes and improving the health of their engine claimants and that very much aligns with our business purpose and mission of building better pathways to better health. Life insurers also suffer some of the same issues, and we begin engaging in that sector to -- began engaging in that sector, too. And of course, we see state governments and federal governments who are, and will remain for quite some time, the largest funds at health care in Australia, has potential clients. They're harder to engage with and probably will take longer to build trust and confidence that we have services that are relevant to them, but we're very focused on going down that path. And last dot point, I mean, other government agencies, Department of Veterans Affairs. They run a very significant, effectively private health insurance scheme and have many of the same issues that other health care funders and other health insurers have. So we see them as very relevant and potential client for us. So Mark, I think that's the end of my formal presentation.

Well, I'm expecting some questions, Rhod. That's all? So you're not off the hook yet.

We have a question from Andrew from Macquarie. How are competing funds interpreting the perceived conflicts of Honeysuckle Health regarding partnering from hospital contracting at greater scale? Alternatively, how many competing funds have partnered in this offering so far?

So we haven't got any partners so far in terms of competing funds, but we are actively engaging in preliminary conversations with a number of funds. The -- in terms of potential conflicts, arguably, there are no real conflicts. We're all trying to purchase better value of health care. But some of the concerns that we hear include just focusing on nib's interests rather than the buying group as a whole. And that could play through with a geographic difference in opinion or difference in focus, but we think that's definitely manageable. nib is -- has a national footprint, and most of the hospital groups that we work with have a national footprint. And so when we negotiate and hold discussions with them, they're at a national level. The other potential conflict is at a risk appetite level. And I think this has been a historic issue for some of the other buying groups where within a buying group, there can be a difference in risk appetite as to how hard the funds are prepared to negotiate and what outcomes they view as acceptable. So that is a real concern that we are looking to manage. And I don't think it's completely curable, but there are some techniques that we're proposing, including having every participant having a very transparent and upfront statement of risk appetite in terms of what outcomes they expect and what level of negotiation they're prepared to go to, to better inform the contracting team and the overall work that we're doing.

As co-chief, I've had a number of discussions with CEOs of health funds, and that's fairly evident looking at early days, but it's fairly evident as to Rhod's point, they're still very much focused upon the price, the price of activity. When we explain -- look, price will always be important, of course, but at least as important as behavior, because now you're getting a cheaper ICU, it would be cut 4x as many as you're showing. So behavior and outcomes again become more and more important in terms of negotiation process. And then you can see them nodding. So we've only just received our approval authorization by the ACCC, frustratingly subject to this crazy appeal, like these industry associations have to justify their existence in the eyes of their members. So I'm surprised but not surprised at the same time. But I'm very confident that what Honeysuckle Health has to offer -- well, not only in terms of provider network contracting, but everything that goes around it, is going to be quite compelling. And it's a bit like I was saying when we're discussing the idea of our BPO to offer a smaller health funds. Hopefully, if we get it right, the proposition will be compelling.

The next question is from Kieren. What other clients does Honeysuckle Health have today? And what are the medium-term financial aspirations of the business?

I'm not going to disclose. We haven't got permission to disclose our other clients at this stage. We have 2 non-nib clients. I won't disclose their names. Medium term -- that was the second part of the question, right, Renea? Hopefully, I've been clear on that already, but I'll restate it. The 2 main areas of focus for us as far as offering services to other payers are in health management programs and in health services contracting. So we are actively exploring clients for both of those services. And in health services contracting, the short-term or medium-term clients would be medium-sized health insurers as well as workers' compensation and CTP insurers. And arguably, the same clients for health management programs that we're offering, and they're quite distinct offerings. You don't -- they're separable and health management programs are a much easier implementation. We would view particularly our Hospital Support Program, but programs also like SilverCloud and Limber as no-brainers. We're seeing them very effectively deployed, getting good outcomes, good member experience. So our medium-term aspiration is to be offering and providing those programs to health insurers and workers' compensation insurers.

Yes. Look, I think it's difficult to foreshadow where Honeysuckle Health is in -- I mentioned this earlier. It's difficult to foreshadow where Honeysuckle Health may or may not be 1 or 2, 3 years from there on the basis of what it looks like today. I can't speak for Cigna, but sufficient to say like us, they have an appetite to continue to invest in this business. They have an appetite scale of the business. Cigna made an enormous investment, of course, in Evernorth, their repurposed Express Scripts business. Well, I shouldn't say it's just repurposed, Express Scripts, it is a health management company and they very much see Honeysuckle as part of that. So how long it takes Honeysuckle Health to become a unicorn, a $1 billion company, it's difficult to say. Will really depend upon the investment frontier, I suspect from here.

The next question is from Sid from JPMorgan. And just building on your comment from Cigna. What is Cigna's involvement in this venture apart from funding? And how are you encouraging your members to be nudged to choose your clinical partners as opposed to them being guided by GPs?

Yes, they're 2 quite distinct questions. So I'll take the Cigna question first. The -- well, obviously, Cigna, a 50% investor. We've got -- we've had great support from Cigna in terms of access to capability. The team that we work through is it's part of the international division. So I call out to Ned who's probably up late on the East Coast of the U.S. watching me. And he has been our main conduit into the Cigna business, which you can imagine has enormous capability. They've done, coarsened exact matching 10 different times in 10 different ways within their business. And often, the trick is finding the best person who's done it the best way, and that can take a while. We -- they're, of course, actively interested in our development, but they've given us a fair bit of leeway. So they're not -- we're not on calls every day, but they are actively interested in the business, and we have access to whatever capability they think can help us, and it's up to us to then pull that capability into the business. Misael is ex Cigna and now Honeysuckle Health. But of course, he has strong relationships throughout the business that help us access capability as well. When we first launched the business, we did have Misael along with 3 other Cigna employees seconded into the business for a period of about 6 months. We've got one other clinical resource who remains on secondment on a part-time basis as to help build our clinical capability. Hopefully that answers your question.

Yes. I'll just add to that. And just to repeat the point, in my mind, Cigna see Honeysuckle Health as a beachhead in this part of the world for Evernorth and an important one. There are 2 Cigna directors on the company Board of Directors. David Cordani, the CEO of Cigna, has often called out Honeysuckle Health in his investor presentations as a real priority for the company. So I would characterize their level of engagement as very high.

And sorry, Renea, remind me the second question?

The second part of the question was, how are you encouraging your members to be nudged to choose your clinical partners as opposed to being guided by GPs?

Yes. So that's the question for nib, which I can, I think, I have got answer on. The -- well, the intention is to have the nib members being guided to clinical partners offered the option of using clinical partner in a number of different channels, including through direct nib channels on their website when an nib member calls and speaks to a consultant at nib. We also intend to engage directly with GPs to build and give them access to tools that let them understand whether their patient has health insurance, get access to a list of specialists to participate in not only nibs, but other health insurers' medical gap schemes, including no added profit schemes like the Clinical Partners Program and also allow GPs to see which kinds of health management programs are offered by a particular insurer and refer directly into those programs. So the goal will be to have multiple different channels by which a patient can inform themselves of the availability of a clinical partner or other in network provider. And there'll always be a choice. So one of the criticisms that the provider groups have made through our ACCC application process is that we're going to be reducing choice. That's absolutely not the case. We believe we're enhancing choice and providing a more transparent choice. Patients, nib members will always be able to choose any provider they want. But they will, in the future, have better information to enable them to choose a provider where they can have a guaranteed no out-of-pocket experience as well as have access to more confidence that the provider participates in collecting outcomes and hopefully gets better outcomes than average.

The next question comes from Nigel Pittaway from Citi. What are the main road blocks or sources of resistance to overcome if you aren't to be successful in building scale in the Clinical Partners Program?

Yes. I'll throw it to David. I don't have got an answer to that question. There's a number. The -- we're overcoming specialists suspicion is one challenge. So scaling the program is intense. It requires in one-on-one conversations between our team and individual specialists. It also requires cooperation between the specialists and the anesthetists. And I don't think we're giving in any way trade secrets that nib is not perceived as the best paying fund by anesthetists. So we're working to address that issue. So the -- it's an intense process to build those relationships, and that is time consuming, is probably the biggest challenge. David, do you want to add to that?

Yes. I think there's a few things around this. This is probably far more tactical program than what you'd see with the general application of networks, the gap schemes are broad, terms and conditions, subscription opting-out part where this is far more labor-intensive and directive in how we have to build these. So finding the right specialist is probably key to that, being able to find specialists and anesthetists that want a partner that are seeking alternative ways of being able to apply their care is really key. So the ability to source those, have those conversations and then be able to work out model of care is probably one of the biggest challenges, particularly as we look to sort of scale it out. That being said, we are seeing now, because the program has been in place for a number of years and getting great outcomes, that there's a lot of self-initiation. We are getting proactive reach-outs from surgeons in various areas and multiple modalities now as well that are calling to try and understand where we're up to in regards to expansion of those programs and how we want to go about doing that into that particular group. So I think the ability to roll that out is going to probably be a little bit dependent on how fast we want to move and how fast we can partner with. And we want to be proactive in building the programs the right way, which means particularly as we venture into these new areas is working with medical specialists, with the craft groups, the associations and the colleges to make sure that we are doing it in the right way. And that's probably going to be some of the limiting factor on it.

Yes. That's such an important question. I'm very confident 10 years from now, that will seem quite ridiculous that once upon a time we would separately build for the hospital, the ICU, the prosthetic device, the anesthetists, the junior doctor would be as crazy as going to a smash repair and being separately built by the electrician, the mechanic, the spray painter, et cetera. So beyond the behavioral changes that Rhod and David have mentioned, there's a whole world of automation and administrative capability we're going to have to build. Because if a doctor is going to take the responsibility for the entire cost of the episode of care, as we would like, to avoid some of the moral hazard which currently exists in the system, think prosthetics, this whole debate about prosthetics are nonsense. We put the responsibility back on the doctor and they'll get the best price because anything they pay over the odds comes out of their pocket. So it's an enormous challenge. Just think about what we've done with clinical partners for orthopedic surgeons in just a couple of regions. Applying that across the entire case mix across Australia and New Zealand is going to be an awesome challenge, but yes, one we're up for.

The next question is from Rhett Kessler from Pengana. How do you price your services?

Yes, that's a good question. The -- with -- I'll give a high-level answer. The -- we have focused on value-based health care. And so our focus is to purchase health care based on the value that it's delivering. And we're looking to price our services based on the value that we're delivering for the payers. That's -- and certainly, this is a big push for health care payers around the world and Cigna, notably very actively and strategically pushing down a value-based health care purchasing path. So part of the capability they're bringing to us is helping on that journey. They stress there's a maturity that needs to be worked through. And you can't jump straight from a fee-for-service-based contracting at one end of the spectrum to a capitated-based contracting at the very end of the other end of the spectrum, but work through the necessary stages. So to start with, we'll probably have a simple mechanism for pricing of services based on an access fee and a percentage of the revenue that goes through the network. But in the medium term, we aim to be pricing our services based on the value that we're delivering to the payer, which we need to jointly invest in discovering. That's probably the best I can answer at a high level.

There are no further questions via the online platform. Just checking via the teleconference.

We have no phone questions. [Operator Instructions]

Okay. Looks like we're off the hook, Rhod, off the hook. Thanks for joining us today, and which just leaves us with a wrap up, correct? Okay. Look, I'll just wrap up by thanking everyone for their perseverance today and interest in our presentation. I hope you found it worthwhile, and more than interested to hear any feedback. I think we've only done 2 of these since our listing way back in 2007, but I'd like to think they're worthwhile particularly in such uncertain times, as we have confronted the COVID now and then, and particularly given the massive nature of some of the initiatives we're investing in from P2P through the Honeysuckle Health. I'd just like in the conclusion maybe to finish with 5 points about the future. It's hopefully fairly evident from our -- what we've described today in our P2P approach that we see a world in which people become members of nib in Australia and New Zealand or even China for that matter because they believe that they'll be healthier as from being a member. So we'll still be there for their financial protection once they're sick or injured, but their better health, our purpose is fundamental in their minds and our approach. Secondly, that they'll meet nib through a number of different distribution channels, be it directly through with nib or through our various white-label partnerships or even population health initiatives such as Ngati Whatua Orakei in New Zealand. And they also made through some new product concept, be that a green pass, a freemium offering, which Ed spoke about smiling or a treatment package, a bundled noninsurance package for some particular condition, whether it be pregnancy or the I shouldn't call pregnancy, the condition or the skin -- the condition of the skin or whatever the case would be. And expect we're talking to a lot of partners about this idea of putting bundled package products out in the marketplace to help people address health conditions that they may have. So they've made us in that way, too. They go on our Salesforce CRM and all of a sudden, we get to know them a lot better. Third point is that most of our engagement will be of a digital form. People are but hopefully, in the next -- certainly within the next 10 years, people are actually engaging with us and shopping on Mark Zuckerberg's metaverse. A long way to go to building that out, but we regard digital engagement, virtual engagement with our members and travelers as very much the future. And even if it's years away, we need to start investing and thinking about it now. Fourthly, that the value we do capture in our health care system, be it in the form of claims efficiency or even the dividends we get from Honeysuckle Health. We recycled back to our members and their providers in the form of better benefits for providers as well, again, the quadruple aim. And also that efficiency and that value creation helps us protect our margins within our various businesses. And fifthly and finally, that our success and actually improving our health outcomes and being able to manage health outcomes at a population level becomes a compelling case for other payers, be they government payers or as Rhod has discussed today, third-party payers like general insurers. So the whole notion of population health as a longer-term objective and the role we can play in being at the vanguard of that shift is very much at the forefront of our thinking. So thanks again for your time today and stay well. Cheers.