Bupa Arabia FY 2018 Earnings Conference Call and Webcast April 9, 2019 Disclaimer This presentation has been prepared by the management of Bupa Arabia (“The Company”). It does not constitute or form part of, and should not be construed as, an offer, solicitation or invitation to subscribe for, underwrite or otherwise acquire, any securities of the Company or any member of its group nor should it or any part of it form the basis of, or be relied on in connection with, any contract to purchase or subscribe for any securities of the Company or any member of its group, nor shall it or any part of it form the basis of or be relied on in connection with any contract or commitment whatsoever. The information included in this presentation has been provided to you solely for your information and background and is subject to updating, completion, revision and amendment and such information may change materially. 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FY 2018 Webcast 2 Agenda • Financial Performance • Market Outlook • Other Highlights • Abbreviations & Glossary FY 2018 Webcast 3 KPIs Full year 2018 reports healthy GWP, contribution and loss ratio SR mn GWP Contribution +10.8% +7.4% 8,567 1,361 7,733 1,267 Combined Ratio +10.5% 96.5% 98.0% 94.9% 95.2% 19.4% 7.3% 9.7% 11.4% 11.9% 1,110 1,226 211 252 Q4 2017 Q4 2018 2017 2018 Q4 2017 Q4 2018 2017 2018 EBT1 & EBT margin Dividends 89.2% 88.3% +4.8% 83.5% 83.3% 2,0 2,0 525 501 1,5 32% -8.5% 6.5% 6.5% 26% Q4 2017 Q4 2018 2017 2018 5.2% 19% 4.3% Expense Loss ratio ratio 101 92 Q4 2017 Q4 2018 2017 2018 2015 2016 2017 EBT margin Dividend payout ratio Dividend per share 1Earnings Before Taxes and Zakat or EBT represent net income attributed to the shareholders FY 2018 Webcast 4 EBT EBT on the rise (+5% YoY) through favorable contribution and investment income SR mn Contribution 93.9m +5.0% 477.9 -384.0 500.6 40.4 1.7 525.4 -111.2 1 2017 Earned Premium Claims Incurred Expenses Investment & PH Surplus Payable 2018 Other Income -13.8 -53.6 -28.5 -15.3 S&M G&A BDP Other Contribution 40.5m -8.6% 193.3 -152.8 101.1 2.0 92.4 -64.8 13.6 1 Q4 2017 Earned Premium Claims Incurred Expenses Investment & PH Surplus Payable Q4 2018 Other Income -21.5 -18.6 -2.5 -22.2 S&M G&A BDP Other 1PH: Policyholders’ share of surplus from insurance operation FY 2018 Webcast 5 Investment Portfolio and Results Improved investment income through further portfolio diversification and local equity performance Investment Income Income Breakdown1 Asset Allocation 6% +16.6% 17% 184 696 551 574 2018 2% 75% 158 19% 51 29% 32% 130 42 2% 15% 44 2% 63 35 81% 2017 81% 45 71% 40 68% 21 11% 39 1% 2% 16 35 44 10 41 2016 4 9 12 86% 2015 2016 2017 2018 2016 2017 2018 Investment Income Q4 Q3 Q2 Q1 Funds Equities Underwriting results Sukuk Deposit 1Income breakdown represents net income attributed to the shareholders and policyholders FY 2018 Webcast 6 Market Share and Positioning Bupa Arabia is leading the Saudi health insurance market Total Insurance Market Share (QoQ) Total Insurance Market Share (YoY) 14% 16% 21% 24% 6% 35% 36% 39% Q4 Q4 7% 40% 2017 7% 2018 2017 2018 6% 36% 9% 8% 33% 23% 22% 9% 9% Health Insurance Market Share (QoQ) Health Insurance Market Share (YoY) 18% 18% 17% 19% 25% 26% 5% 2% 4% 3% Q4 Q4 41% 43% 2017 2018 5% 2017 2018 8% 30% 29% 43% 48% 9% 7% Bupa Arabia Medgulf Tawuniya Al Rajhi Takaful Others Source: respective insurance companies’ filings, and Bupa Arabia estimates FY 2018 Webcast 7 Insurance Market Comparative Figures Bupa Arabia realized more than half of total health insurance market contribution SR mn Health Insurance Market Total Insurance Market GWP Contribution Investment income Net profit +5.2% -17.8% -12.8% -56.3% 20,041 2,255 1,004 1,101 19,056 158 875 501 1,854 8,567 43% 184 21% 7,733 1,267 183 482 448 1,362 73% 246 525 109% 67 71 952 5,747 5,757 24 18 80 44 185 33 190 1,020 1,719 1,434 694 -147 -213 450 578 336 341 3,407 3,589 -388 -205 -80 -170 -39 2017 2018 2017 2018 2017 2018 2017 2018 Bupa Arabia Tawuniya Medgulf Al Rajhi Takaful Others Source: respective insurance companies’ filings, and Bupa Arabia estimates FY 2018 Webcast 8 Loss Ratio and Technical Reserves Bupa Arabia reports favorable loss ratios and consistent reserving profile Loss Ratio – Health Insurance Market 103% 101% 103% 97% 94% 91% 87% 81% 84% 83% 86% 79% 77% 81% 77% 80% 76% 79% 68% 72% Bupa Arabia Tawuniya Medgulf Al Rajhi Takaful 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 OCP (reserves)/TTM Claims – Health Insurance Market 39% 37% 32% 33% 31% 31% 26% 28% 27% 26% 24% 25% 25% 24% 22% 20% 21% 21% 22% 22% Bupa Arabia Tawuniya MedGulf AlRajhi Takaful 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 Source: respective insurance companies’ filings, and Bupa Arabia estimates FY 2018 Webcast 9 Bad debt provision (BDP) Analysis The growth in receivables as % GWP overtime suggests weaker collection, yet it wasn’t accompanied with growth in BDP for some companies in the insurance market ∆ BDP % Rec (16-18) 40 Enaya 35 30 Sabb Takaful AIG-ANB Metlife 25 Alinma Tokio M 20 Medgulf 15 AMANA Insurance AXA-Cooperative Trade Union CHUBB Ace 10 SAICO Gulf General Wataniya AICC Al Alamiya Tawuniyah 5 Buruj ACIG ALLIANZ SF Bupa Walaa Insurance U C A 0 -22 -20 -18 -16 -14 -12 -10 -8 -6 -4 -2 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 Gulf Union -5 Al-Ahlia Saudi Re SALAMA ATC (Alahli) ∆ Rec % GWP (16-18) AlJazira Takaful Al Rajhi Takaful Malath Insurance -10 -15 Arabian Shield -20 Solidarity -25 Sagr Insurance -30 Source: respective insurance companies’ filings FY 2018 Webcast 10 Agenda • Financial Performance • Market Outlook • Other Highlights • Abbreviations & Glossary FY 2018 Webcast 11 Saudi Health Insurance Market Trends (1/2) Total insured lives declined by 8% over 12 months period driven by expats departure +14% -8% -15% 12,012 3,130 9,278 11,034 2,734 7,904 2017 2018 2017 2018 2017 2018 Total Insured Lives Saudi - Total Expat - Total -20% -5% +15% -10% +14% -13% 7,959 1,946 6,923 7,198 1,698 6,014 1,184 4,053 3,836 1,036 2,355 1,890 2017 2018 2017 2018 2017 2018 Total - Primary Saudi - Primary Expat - Primary Total - Dependents Saudi - Dependents Expat - Dependents Source: Stats.gov.sa, GOSI, MoL, CCHI, and Bupa Arabia estimates FY 2018 Webcast 12 Saudi Health Insurance Market Trends (2/2) Expats departure has slowed down in the second half of 2018, Saudi enforcement expected to officially kick off in April 2019 Expats -550K -1.3M 9,828 9,744 9,577 9,411 9,323 9,278 9,278 9,230 9,060 8,852 8,745