Good morning, everybody. I think that video, I hope you agree, neatly captures pretty much what we're on about as a company today, and that is a integrated end-to-end experience and total solution for people's healthcare needs, which, of course, features private health insurance, but contains so much more. I want to start this morning by acknowledging we're presenting today from Newcastle, the traditional lands of the Awabakal people and the Worimi people just over the harbour there. We acknowledge their stewardship of the land for literally tens and tens of thousands of years and pay respect to their elders, past and present. Normal approach today, I'll start off with a brief overview. Nick will go into some of the more detailed financial analysis.
Ros will follow with her report on sustainability and related matters, and I'll come back towards the end and talk, look a little bit more forward in terms of our business strategy. Again, what we're trying to do with our P2P strategy and finish with an outlook, but allowing you to draw your own conclusions. A lot of slides here this morning. We won't go through every one, of course, there's simply too many, but try and highlight some of the key and more salient points. This is our purpose today. Redefining ourselves as not just somebody who's here for your financial protection and security and access to private hospitals.
That will remain important in the future, as I started off by describing this morning, being here to help you stay healthy and well in the first place and provide you with a much greater universe of healthcare products and services. You know, how you stitch that all together into the seamless experience I mentioned is one of the great challenges of the company. We're becoming more and more accustomed to talking about purpose, not that it's new to the company, but making it more a highlight in our narrative because, you know, that's why we're here. You know, we acknowledge measuring purpose is problematic. I think Microsoft's perfect purpose is helping people and organizations achieve everything they need to achieve in making the world a better place.
I'm not sure how you, you measure that, but you can certainly try and focus on some of the outcomes that are consistent with this, with that, with that vision. Again, we're working methodically through what's the best way to measure our progress, or, or lack, lack thereof. We've landed on these 5 measures. We can talk more about this into the future. Today is not about going through all of this. Maybe if I just highlight that one in the middle there at the top, around our hospital support program, which is being delivered by Honeysuckle Health, where, you know, almost 60% of participants report that they've achieved their health goals as a result of the kind of support we're delivering them, mainly through nurse based telephonic service.
As we've previously mentioned, we've reduced the rate of unplanned hospital admission by almost 30% since the program first kicked off just two years ago. As a company, very focused on our purpose and very determined to ensure that everyone in the company, the 2,000 people or so we have, are aware of that purpose and as we hope our stakeholders at large are. Lots to highlight in these results. Our core Australian residents health insurance business, what we affectionately known as ARHI, had another fantastic year, growing more than double what we expect will be the industry average. The net margin was strong in the business. It's moving back towards our target of 6%-7%. We think that is a more sustainable target to aspire to.
I think it was 8.9% last year, down from 10.2% the previous year, and Nick will talk more about that. We paid a lot of money out in claims, notwithstanding COVID and the compensation we delivered to our members. Claims totals AUD 2.2 billion, up 6.6% on the previous year. Our international insurance for workers and students roared back to life last year, grew 15.7%, and most importantly, with our travel business, sharply reversed the loss-making of the previous two years, which I think, Nick, amounted to, what? AUD 80 million or thereabout.
It's been quite a dramatic turnaround in the fortunes of particularly international students and, and, and travel, and our international workers business continues the power on, driven by some, you know, major thematics and government initiatives such as the Pacific Labourers Employment Scheme. Another strong result in New Zealand, fairly typical of New Zealand, it just continues its steady growth and progress as, as a company. Travel recorded its largest gross written premium revenue in its history, and certainly since our ownership and underlying profitability. Obviously, it's returning on the back of travel revenge. nib Thrive is going strongly. We'll, we'll talk more about that further on, as we will our pay to payer strategy and ecosystem. Look, attribution, as I've noted here, is difficult.
Yet if you ask yourself: Well, why is nib continuing to grow at such a rate compared to the industry average? No doubt, the offering we have in the marketplace today, our P2P strategy and ecosystem, is having some impact. Honeysuckle Health, likewise, continues to gather momentum and support our membership, but also other people in other sectors of the insurance industry. Only in June, nib was displaced as the largest client measured by revenue in that month by the general insurers and the support that Honeysuckle Health is providing around injury support management. The group NPS was very positive, up 4%.
We had great employer engagement last year, and that was particularly important given the challenges associated with COVID and our own, what we believe, progressive approach to hybrid working. Of course, we're now in a very strong capital position, and Nick will talk more about that further on. Again, just some headline numbers here. We'll go through this in more detail as we progress this morning. Nick?
Okay. Thanks very much, Mark. Go through a few of these quite quickly. I'm sure there'll be the, the questions at, at the end. We might zip through these. A few key things in the overall group result. Good, strong revenue growth. We've, we've given you the growth rate adjusted for givebacks. There are obviously givebacks in, in both, both years. Also on the claims, you'll see that we did release the, the entire DCL. I think the whole industry's been, been reducing. From our perspective, we, we looked at it and, and tried to come up with the reasons why the DCL should be retained, on balance, on balance, released, released the DCL. In terms of underwriting expenses, they have increased, we've acknowledged they've increased.
To some degree, there's, there's investment in marketing and also IT capability, but there's also we've highlighted an almost AUD 15 million of asset impairments, mainly around software, but also building leases as well, as we've moved to our distributed work strategy. You can see again, the net income and expense, you know, very, very large, or other income and expense, very, very large increases, and that's the travel rebound. Just want to also highlight, and we have in the investor pack, let you know what the Midnight Health impact is, because we now consolidate Midnight Health fully into our results, and then it comes out as a, or some comes out as a minority interest. Just that's one to, to look to.
Quickly on the, on the finance costs, increase, which has occurred across the reporting season, no different to us, in regard to the base rates, and then the effective tax rate, is because currently we're not deducting the Midnight Health losses, given the, the pattern. But we would expect to be able to do so as it becomes profitable in the future. Might go to the next slide. We give you this slide, or we started giving you this slide, at the start of COVID to try and give you some indication. This will probably be the last time we, we do. We'll, we'll replace it with something else, because just need to highlight to everyone that the base of this slide is back what we thought would occur, would occur in February 2020.
It's starting to become quite dated, but directionally, it, it still kind of works and, and I think is, is still helpful. The first bit I'd, I'd like to draw your attention to is, is the policyholder growth and then the product and scale mix, which are both really positive numbers. Good, strong policy growth and also quite limited downgrading. That's a positive. As we come into the OSC development and the rate, just to unpack this a little bit, in hindsight, it, it looked like our OSC had been a little bit low, both in June last year and also December this year.
There's a bit of movement in the OSC this year, a reasonable increase, but part of that is around some of the historical claims development that's occurred. If you look at the rate variances, again, it looks like it's a negative rate variance, but you've got to see that in light of the COVID savings, which actually occurred over the three years. Back in 2020, we had a view on where rates would be and where claims would be, and so forth, and of course, that's really quite substantially different now. Industry risk equalization, or risk equalization continues to assist us.
We're seeing that sort of flatten out a little, and then you can see the net, net COVID impacts coming, coming to a relatively small number. I'm happy to answer any questions, as, as they come through in the afternoon, but again, really what I, I just really wanted to highlight is, is firstly, the impact of the, of the growth and the downgrading, and then just, just letting you know about the rate variances that, again, sort of if you take into account the COVID savings. Next page, please. We highlighted this at the half, again, it, it's followed through for the, for the full year, and that's really that we are seeing the, the ARHI net margin come down towards its target levels.
We have guided that that will continue over, continue to do so over time, replacing that are the substantial increased earnings in the other developed adjacencies. You can see where Mark's talking about how much travel and the international students and workers have come back. Just highlighting again the investment that we're making in Honeysuckle Health and Midnight Health. These are our developing adjacencies, and the contribution from nib Thrive, which will get the full year, the full year into FY 2024. Gone through most of this. I'm sure there'll be some questions on that. Again, highlighting the sales and the downgrading, and then the COVID DCL impact with the OSC as well. Moving across.
This is just again highlighting the, the continued above, above-system growth that our, our ARHI business has, has managed to achieve. We've put in the, the nine months to March 2023. I think the APRA data comes out next week for the, for the 12 months. Again, a good strong growth against industry. I won't go through that. We might move on to that, that one. On the international business, a really good turnaround from that. We saw that in the first half. It's continued, it continued into the, into the second half.
What we are seeing is that, overall in, in the, in the measures that, that we're using, overall volume's at about, 83% of pre-COVID volume, so perhaps still a little more to, more to come, judging by pre-COVID. Our sales are, are higher than that, so we're getting our share, which is, which, which is good, but again, a very pleasing growth to, to come through. New Zealand, just wanted to highlight. New Zealand's... I, I, I call New Zealand, just a very consistent performer. That's continued. Although this performance looks extremely strong, it's, we just need to remember the, the impact that, that we had with the, the liability adequacy test last, last year.
Again, we had an AUD 4.7 million impact, which, which was negative into last year and has been positive into this year. If you adjust between those two, then the growth rate goes down to 8%. Still a really, really good result, but the 36.8% growth was, was impacted by, by that one-off. We've talked about travel. One little thing I would highlight down in the bottom left of, of this page, is the operating expenses as a proportion of gross written premium. And I think we did talk-- I first joined in, in June 2020, and we, we did talk about a more sustainable shape of the, of the P&L.
You can see that as, as we've grown, the operating expense ratios have come down, which is allowing that profitability to come through. Particularly pleasing is nib Thrive. We raised some money in October, you all know that. We've managed to secure 5 acquisitions with another 2 in the pipeline. It's contributing positively, and we will get the full year coming into FY 2024. Capital, we gave you the capital under the new standards, which take effect from first of July this year. You can see the PCA ratio is equal to where we were. Good, strong capital position.
We were just highlighting a little bit, on the net tangible assets, in those graphs, that they're relatively high in December as we'd just raised the money from the capital raise, and then we've converted that effectively into intangible assets, with the Thrive acquisition. That's the reason for that coming down. Cash flow. Cash flow was a really good result, good, strong, free cash flow. It did go down on last year, but we've highlighted in the bottom right that the FY22 cash flow result was obviously a very strong result. Come back to more normal levels and a good result there. I'll hand over to Ros.
Thanks, Nick, good morning, everyone. Before I talk to some of our key highlights in sustainability for FY 2023, I thought it worthwhile reflecting on our sustainability pillars and the approach that we take to sustainability at nib. It is very much tied to what we're seeking to achieve as a company, and in particular, in the population health space, which is where we really see we can have the biggest impact. You'll see with some of the highlights here, we've had 25,000 members do health checks, and that's really allowing us as a company to further understand our members and ensuring that our members are on the right programs. You'll see there that we've had 19,000 members enrolled in health management programs, which is well beyond our original target of 12,000.
As Mark mentioned at the outset, our program with hospital support, we're seeing members have a gap closed in care of 60% of the people going through the program, so we're having some fantastic outcomes in that space. In terms of on the home front with our employees, life at nib, as Mark mentioned, continues to be embraced by our employees, and in particular, our engagement score, 81%, is well above the global benchmark of 73%. That allows us not only to offer our employees flexibility, but allows us, as a company, to source talent from a much broader pool, because effectively, we can employ anyone from anywhere around the world. Just finally there, if we look at the prevention partnerships, and this is really building on our capability in the company and moving it to the community.
The prevention partnerships leverage our IT technology to work with partners in the community to build out programs that are really aimed at preventing chronic diseases like diabetes and mental health. In particular, for example, we worked with the Black Dog Institute, and we launched the Sleep Ninja app, which is free to anyone through Apple. We've seen that people who participate in that app have had a 60% improvement in the way in which they're sleeping. Just finally, on the FY 2023 targets, I will call out that, you know, we remain committed to sustainability, and that's clearly illustrated by the fact that a sustainability metric is now included in all of the executive STI scorecards.
Moving on to our FY 2024 targets, we will obviously continue to build out the work we're doing in terms of health management programs and better understanding our members. In particular, we've been working for a number of years with the community, with the community in Bourke, which is about 10 hours out of Sydney. It's a very remote community and has a high proportion of Aboriginal and Torres Strait Islander peoples. We've developed a care navigation model pathway with them, which we're looking to launch later in the year, which will really enable people to be able to navigate the system and access better healthcare in what is, as we all know, a very fragmented system.
In terms of the natural environment, we're very much committed to maintaining our carbon neutral certification, particularly as we bring on a number of companies through the nib Thrive acquisitions, and we work towards our 2040 goal of net carbon zero. Just finally, in terms of our RAP, we launched our Innovate RAP last year, and we're very much committed to closing out those deliverables in the coming year as we work towards and with Aboriginal and Torres Strait Islander peoples to close the gap in health, which we know is quite significant. Just finally, we will be launching our sustainability report in the coming months, so happy to meet in the following months to take any further questions in relation to what we're doing in that space. Mark, over to you.
Thanks, Ros. Well, as many of you know already, as a company, we're very focused on this idea that we can harness technology, you know, the data science and predictive analytics that we're all becoming more and more familiar with, to make the value proposition for being a member or a, a traveler or an NDIS participant with NDIS, more as much about giving them deeper insight into their health and well-being and how they may achieve their, their, their goals. That's, that's our mission as a company today. It's not to dismiss or downrate the importance of private health insurance as as part of the value proposition. It will remain an important part of the value proposition, but that's just not how we're thinking as a company today.
We're thinking as a company more, more and more about how do we keep you well and healthy? When we think about the marketplace, we lean into this concept of value pools and where are the places in the marketplace, particularly around healthcare and travel and disability services, where we have a license to play and can create enterprise value for the company and our shareholders. Of course, that starts with the traditional private health insurance markets that we navigate are high, and in particular, New Zealand, and we still see enormous opportunity there for the company.
You know, we sit there in Australia with 10% of the marketplace, probably less than 20% in New Zealand. With a superior value proposition, we think we can not only grow the marketplace, but our share of that marketplace. In the way of economies of scope, we have long been pursuing new market opportunities around the core PHI businesses. You know, that explains our entry into, you know, workers, international workers and students. It explains our entry into travel, it explains our entry into the NDIS, and so far, so good, which is not to say there haven't been failures in the past, but we learn from them, and we soldier on.
Naturally, very focused on cost containment and affordability, you know, given the pressures on household budgets and the fact that health insurance is, is, for many, still largely a grudge purpose. What are we doing about that? Well, first of all, we're trying to expand the value proposition in a way to describe. Secondly, if you're happy to tune into our latest marketing campaign, we're kind of acknowledging, you know, private health insurance is a bit of a commodity, but we're different. Honeysuckle Health is another area where we're trying to capture value, and you can add Midnight Health to that, I suppose. This is recognizing that taking Australia as an example, of the AUD 220 billion we spend each year in our healthcare, private health insurance captures a relatively small part.
We think constantly in the business about, look, in these other areas of the healthcare economy, is there a role for us to play? You know, can we develop businesses in these, these, these particular parts of the economy, and as I say, capture value? The last one, it's described as government and third-party programs. I suppose that's the ultimate value capture of the opportunity, but it's really about population health and just building on Ros's earlier observation.
We think of this as a profound opportunity for a company like ours, and indeed, the entire private health insurance industry, to play a more concerted role in addressing some of the egregious gaps in access to care and health outcomes across the community, particularly in First Nation communities, whether they be in Australia, New Zealand, or anywhere else, for that matter, where we may choose to apply our skill and capability. That's the basis of our business strategy. The next slide is simply another way of expressing this. This is our P2P ecosystem.
You know, it highlights, as we've covered this morning, the importance as a value proposition of financial protection and support, the importance of providing people and their doctors with much deeper insight into risks to their health and well-being and how those risks may be better managed. We include in that today, when we think about populations, this notion of social prescribing, this recognition that social factors, social determinants of care, as we like to call them, are as every bit as important as clinical and medical factors in producing better health outcomes for people and the communities in which they, they, they, they live. Beneath that is our recognition that we want to connect, connect people with a much broader universal network of healthcare services, be they physical, virtual, or increasingly at home.
That we wanna complement that with more everyday healthcare products, the kind that we're now delivering through our, our, majority stake in the.
Midnight Health.
Midnight Health, sorry. Of course, underneath that is a whole stack of enabling capabilities necessary to make this, this vision and mission a reality. A good part of the additional spending you've seen in the company, which Nick alluded to, is the investment we're making in growing these kind of capabilities, whether they be the new app, which we started today, right through to the application of generative AI, you know, right across our business, in not only identifying and understanding health risks, but actually improving day-to-day operations. Look, some detail here about the progress both Honeysuckle Health and Midnight Health are making.
You know, Honeysuckle Health is just so mission-critical to fulfilling our ambition of being a genuine healthcare company and capturing value in other parts of the healthcare system, as indeed Midnight Health is. While we're losing money at the moment in both of these businesses, we merely see that as an investment in the future. As I started off by saying, while attribution is difficult, we're very confident both businesses are already adding to the value proposition and the above system growth we see, you know, right across our PHI insurance lines. This was quite a novel part of our strategy, which we embraced a couple of years ago now. It came to fruition last, or during last financial year in November, when we raised capital to fund our acquisition program.
We've been very successful with the acquisitions, but while acknowledging that's just a start, we've so much more to do now in terms of integrating these businesses, putting in place the necessary technology, and growing these businesses, and most importantly, taking a new view about what how we're actually supporting the 600,000 or so NDIS participants. While we'd entered the marketplace, largely around pure plan management, we see a much greater role for our, for the company, and the value proposition for NDIS participants in helping them design plans, procure the services, and then manage those services on an ongoing basis. Plan management is a vitally important starting point for us, but we have a much greater vision for the role we can play in the NDIS.
Not only for participants, participants themselves, but ensuring a more sustainable NDIS system, because there are certain levels of inefficiency, both allocative and technical, that we've identified today, and we think we can help the government redress some of those inefficiencies, and, as I say, make for a better, more sustainable system. Just a few supporting thematics I jotted down on, on, on paper. You know, with, with due respect, for, for thermal coal producers, and here we are in Hunter, you know, this is not a thermal coal sector. We are increasingly spending more on our healthcare as a society. I've often cited the figure that since World War II, we've spent the equivalent of GDP plus 2% more on our healthcare each year.
That's not going to change. In fact, COVID-19, while it may induce some efficiency in healthcare system, is actually going to increase demand for healthcare. Unfortunately, there's low confidence in the public system and waiting times. We don't celebrate that. We don't celebrate the fact that you may wait three years for a joint replacement in the public system, it's clearly a factor driving the level of increased participation in private health insurance, both in Australia and New Zealand. We're seeing that, which is the next point, immigration is adding to that growth and will continue to add to that growth. Our appetite for foreign workers is becoming almost insatiable. Demand for both skilled and unskilled workers is well known to most, we're very confident about return of foreign students.
Australia is still a very attractive destination for foreign students in terms of its geography, its safety, the quality of our, our tertiary institutions, and the fact that students can stay here and work, which, our research indicates is a real driver of demand for Australia as a destination for study. There's renewed enthusiasm for domestic and international travel. Long may that continue. Of course, you know, we're going to see increased NDIS participation, we know that, and, and, and heightening expectations about the quality of service, but also the affordability of services. And there's even more and more potential to support our business ambitions through the application of technology and the power, the kind of vision we have for P2P, that, I've, I've outlined.
I've also added to that, I was just thinking about over the weekend, reading an article out of the U.S. about the increased level of consumerism in healthcare. You know, more and more people are demanding the kind of everyday healthcare products and services that we, that we're now providing through the likes of Midnight Health. I think that's a, that's an important thematic, too, that I could have well added to this, to this summary. This slide everyone's been waiting on, I guess. I won't go through every bit. We expect ARRIVE will continue to grow well ahead of system. It's just a question of how well system does.
You know, macroeconomic notwithstanding the thematics I've outlined, clearly macroeconomic factors, interest rates, mortgages, et cetera, will have some bearing on the level of PHI participation in Australia and New Zealand. We will see some efficiency gains out of COVID-19. For example, we're seeing we've seen quite a significant drop-off in hospital treatment for psychiatric care, in hospital treatment for rehabilitation after major joint replacement. Now, whether or not those efficiency gains are gobbled up by other forms of spending, time will tell. You know, just looking at it at the moment, it's looking rather positive. We'll gradually return to our net margin target of 6%-7%. You know, we're still well above 7%.
You know, it's only time, time will tell just how quickly that margin moves back towards that 7% top end. In international workers and students, recovery is continuing. Student numbers are rebounding. There's still some challenges around the loss ratio in those students' business, because the loss ratio increases with tenure, and we still have an aged pool of international students. Sales are strong at the moment, so that's rapidly changing. I've mentioned the continued growth we expect in workers, courtesy of the demand for skilled and unskilled labor. Of course, we've just integrated a new international workers and students business based in Christchurch into this mainstream business. New Zealand growth prospects are very similar to Australia.
The net margins we've just quoted there, cited there, that's consistent with what you've seen in the past. We're putting a lot of faith in this, this, this idea that we'll do better in the New Zealand market, particularly with the advisor channel, if we can sell life and health together. That explains, of course, our acquisition of Kiwibank's life insurance business last year, last financial year. Gradually, that's being integrated into a more seamless, integrated offer, offering for advisors to make. nib Travel, the resurgence continues. We've touched upon that. Nothing really to add there. nib Thrive, we set ourselves a goal at the capital raise of AUD 50,000 by FY 2025. We're confident we'll do that very easily.
In fact, most likely, we'll do better. Our priorities at the moment are to consolidate the businesses with the appropriate technology infrastructure, and to realize some of the cost synergies. Nick, Nick mentioned that our margins was a little bit low, lower than what these businesses were operating in the past, but that's, that simply reflects the investment and the effort we're making. As those kind of cost synergies materialize, we'll move back to higher margins. We, as I've mentioned, we want to expand the value proposition. We want for NDIS participants, and maybe even non-NDIS participants, who, while they don't get government funding under the NDIS, still have a need.
We think we can have a value proposition, craft a value proposition that in one place enables participants to help design their plan, procure their support services, and manage that relationship on an ongoing basis. Finally, we just important that we mention the impact of AASB 17. It means, Nick will speak to this further on, I'm sure, our reported underlying operating profit, we expect, will be, you know, almost AUD 27 million than what it would otherwise be, purely because of AASB 17, with no impact on the cash, cash flows. Now that, of course, is, is, is tied up with the with our decision to defer premiums, the 1st of April increase, due this year to the October 1st.
Our dividend policy will be based on, on, on that. You know, what, what, what would have been the, the impact if not for AASB 17? Did you want to add to that in any shape or form?
No.
'Cause it's a rather important point.
It, it is. No, I think, I think you've covered it, Mark, which was just to say that, that next year, under AASB 17, whatever our result is, it will be AUD 26.6 million lower than under AASB 1023. We will make that, that adjustment when considering dividends. At this stage, whatever the result would, would be, we would add back AUD 26.6 million in considering our, our DRP ratio.
Okay, questions and answers.
Thank you, ladies and gentlemen. If you have a question or a comment at this time, please press star one one on your telephone. If your question has been answered, or you wish to remove yourself from the queue, please press star one one again. We'll pause for a moment while we compile our Q&A roster. Our first question comes from Sean, Sean Laaman with Morgan Stanley. Your line is open.
Thank you. Good morning, Mark. I hope you're well. Mark, you provided us the policyholder growth expectations in ARRIVE for fiscal 2024, and you made some comments around system growth. I'm wondering if you'd, you'd hazard to give us what your expectations for system growth might be in fiscal 2024?
... Hi, Sean. I'm well, thank you. Hope same for you. Look, it's difficult. System has grown, what, the last eight halves, so it's going particularly well. It's growing on the back of fear of COVID and, you know, heightened awareness of, of the risk to people's health. It's growing on the back of public hospital waiting times. It's growing on the back of migration. We've seen 450,000 people arrive in Australia since borders re-reopened. My best guess, emphasis on guess, will be somewhere around 2%, which is probably where it will land for fiscal 2023, once we see the numbers. As we always do, and always have, have, have achieved, you know, we hope to do a lot better, better than that.
We'll do a lot better than that, because, as I've mentioned, our value proposition is starting to differentiate ourself in the marketplace and attract consumers who otherwise may not be interested in private health insurance. Because of the success of our distribution strategy, our, our, our partnerships with the likes of Qantas and ING and, and, and Suncorp, our partnership with the aggregators, the broker community, our burgeoning corporate business through our, our Grand United or, or GU brand. That's about as
If we finished this year and did, you know, another 4%, I, I think I'd be, I'd be very pleased with that outcome, given that clearly we're entering an uncertain time, you know, with people coming off their, fixed-term rates and the impact that's going to have on households, et cetera.
Sure. Thank you, Mark. A follow-up, I appreciate this might be a bit too early to ask, but, you know, just thinking about what could happen with system growth, and you, you mentioned household budgets, et cetera. Is it too early to ask how you think the government might be thinking about or how they frame expectations for price increases next year?
Yeah. Look, I should have added to just my early observation. Our MPS in AHHI jumped to 40 last month, you know, just further evidence of the cut-through I think we're getting, you know, with this expanded value proposition and our market offering. Now price increases. I don't want to, I don't want to preempt, you know, the minister's discretion on this. I think what we will see, we've just had two periods of extraordinarily low increases, what, 2.7%-
Yeah
or thereabouts for two years now. That was appropriate. It reflected a lower claims environment. It particularly reflected the lower level of risk equalization we incurred during COVID. No question, healthcare spending will return to some new normal. My best guess is that will be somewhere between 4% and 5%. We know the hospitals are, in particular, under pressure, economic pressure, will be looking for greater compensation. I'd be surprised without, again, without wanting to preempt any application that we or other operators may be making, but we will need to price in that level of inflation.
I think, I think two years of, of sub 3% increases, at least in our case, and not, not all insurers were sub, 3%, they're behind us now, and, we'll have to price rationally. You know, fortunately for us, we've still some material headroom around our, our high net margin and confidence that growth, particularly growth of the right kind, will see, you know, a very healthy level of, you know, margin in the business.
Great. Thank you, Mark. That's all I have. I'll jump back in the queue.
One moment before our next question. Our next question comes from Nigel Pittaway with Citi. Your line is open.
Good morning, guys. Just wanted to ask about the write-back of the DCL. Are you basically saying by doing that, that you're expecting no further COVID claims catch-up, it's all done? Can you maybe just make it clear as well, how that will meet your obligations to not profit from COVID, please?
Well, I don't think we're saying... Well, the DCL was gone as a matter of accounting practice. you know, with proper actuarial science, we, we've made judgments in the company that that DCL was funding catch-up. There will continue to be catch-up, i-inevitably. Think about just simple terms, Mary, who didn't have that hip replacement 18 months ago, who, because of COVID, has now had that hip replacement. The question's always been, to what extent is that catch-up additive or substitutional for activity which would otherwise happen? it was always our theory, and I think time has proved us correct on this point, that the supply chain, only being so large, can only accommodate a, a, a level-- could only-- couldn't accommodate a level of catch-up without pushing out activity which would otherwise occurred.
The June quarter was interesting, although one quarter doesn't make a trend. We did see some pick-up, as other insurers I'm sure have, in the level of activity. Whether it smooths out now to find a new trajectory, let's say somewhere between 4% and 5%, and at what pace that reversion to whatever the new mean is. Look, only time will tell. I just don't. We don't have a crystal ball. Nick, did you want to?
Yeah, Nigel, look, I think a couple of things to unpack there. While, while we're, we're, we're not saying that claims won't increase, because we're giving an indication that, that they will, the, I mean, the technical accounting question is around that of catch-up, and with the hospital system open since February 2022, various governments and World Health Organization, et cetera, calling an end to the, the pandemic or a new normal. During the year, the circumstances from our perspective around the DCL, meant that it was appropriate to, to write off, or to, to write back. To that extent, that, that's, I think, the way to navigate between, re-reducing the DCL, and you can still go into a, an environment where, where claims are increasing.
In terms of the pandemic, commitment report, not profiting from COVID, we'll submit that on the 30th September. We have confident in our view that we have not profited from COVID.
Not profited from COVID.
Profited from COVID.
Yeah. Yeah, look, I think the industry's done an extraordinary job in compensating members and making good that commitment. You know, we're returned in to our members in, in the form of cash, and the deferral is what?
180 +-
AUD 100 million, I was going to say almost AUD 200 million. A good part of our saving was about AUD 150 million is in reduced, reduced risk equalization liability. That's not money that was needed to fund treatment of our members. It was actually funding treatment of the members of other, health insurers, and our form of compensation there has been to reduce prices, beneath the margin of, of the major players. I mentioned earlier, our two sub 3% increases in 2023 and 2022.
That sounds like it would be right to assume there's no further of those initiatives coming, as, certainly as a base case. Would that be a fair assumption?
I think that's a fair assumption, yeah.
Yeah.
If only-
Maybe just a question. Yeah, sorry.
If only for the reason that we are seeing a return in activity to more normal levels.
Fair enough. All right. Then just slightly changing tack to Midnight Health. I appreciate you saying you're sort of already getting some benefit from that in terms of stimulating your growth, et cetera, but I mean, obviously, the loss did go up to AUD 8.8, I think, second half, so that's AUD 14.9 for the full year. Can you just remind us sort of the sort of timing we should be looking at and trajectory in terms of those losses moving forward?
Well, you can look.
I mean, again, it's a, it's a start-up. I think we'd, we'll look to see a similar level of losses, into, into this year. We'd be, obviously reviewing every quarter to ensure it's on track to, to gain a profitable outcome in, in the timing that we're expecting when we first made the, made the funding.
Okay, you're not saying what that timing is?
No, Nigel, that's, I was choosing my words carefully on, on that one. Giving you an idea about FY 2024, though.
Yeah. Okay.
Look-
Fair enough. All right, great. Thank you.
Look, I.
Move on before next.
Just, just another point on Midnight Health. The time is much closer than we realize, in which if I'm not feeling well, I'll have a, I'll have an eTriage device on my nib app, which advises me as to whether or not I should take a pill and lie down, have a day off work, go to the pharmacy, or go to the GP, or call an ambulance. I'll be able to have that consultation done virtually in real time. If there is a need for pharma, I'll have those, that pharma delivered, well, filled, that prescription filled and home delivered. I'll have a straight-through, seamless process for imaging, or, or, or pathology.
I'll have the ability to contact a doctor very seamlessly, again, a virtual, if it's a specialist, and so on. This idea, this consumerism, which has been missing from healthcare for so long, which we've seen in so many other industries, think streaming services at home on TV, it's happening, and it's happening rapidly. We need to develop the assets and capabilities to provide that solution for people, and Midnight Health is a critical part of that. You know, Midnight Health is already providing virtual consultation, a prescription fill, and home deliver, and a range of other services which are critical to this value chain, if I can use that expression. You know, I mentioned it earlier, but I very much. That's a, and that's a start-up.
I very much see the kind of loss-making as an investment, in this future, our value proposition, our P2P ecosystem, and the AUD 40 million is no different to the AUD 120 million we spend generally in PHI on acquisition, you know, in the form of commissions and marketing and advertising. Obviously, we need to keep an eye on cost and be rational in our deployment of capital, but don't underestimate the importance of this company with Honeysuckle Health in the kind of world we're trying to create here for consumers.
Okay, thank you.
One moment before our next question. Our next question comes from Andrew Buncombe with Macquarie. Your line is open.
Hi, guys. Thanks for taking my questions. Just the first one is in relation to the claims experience in ARHI. Can you give us some color around what you're seeing in the months of June and July? I'm just trying to compare that to your 4%-6% guidance range for FY 2024. Thanks.
Yeah, yeah, sure. Yeah, I mean, again, very general, so because sort of every month can, you know, can go within its, you know, within a, within a range. We did see a tick up in the fourth quarter in terms of claims, and then July was relatively favorable. You know, I, I wouldn't read too much into either of those, but since the question's been, been asked, you know, that that's, that's sort of where we're, where we're seeing it. You know, August, again, I don't, don't see anything that Q4 provided or July provided that would give me an indication of August. I think it's just a month by month at the moment.
Yeah. My only other question was in relation to the DCL going from AUD 124 to zero in the last 6 months. There's a couple of results on today, so apologies if this is laid out somewhere, but can you give us an idea of how that AUD 124 unwind was separated into claims catch up, give backs compared to retained as profit? Thanks.
Yeah, it's a good question. I think the first part I, I'd bring it out is that the OSC, in hindsight, was, was somewhat understated. Broadly, the way that I'd be looking at it is that of the AUD 110 for the full year, rather than the half, because the combination at the half when the OSC was, was reasonably largely understated in hindsight, sort of the full year is probably a better way. You've got the, you've got a AUD 110 reduction, of which AUD 71's in the give back. In terms of the overall balance of the AUD 30, then, you've got some catch up, and you've got some return to profit potentially, but our margins went, went down overall.
Then the other thing that's worth noting, noting is that the OSC also increased year-over-year.
Okay. That's it from me. Thank you.
One moment for our next question. Our next question comes from Julian Braganza with Goldman Sachs. Your line is open.
Good morning, guys. Just a first question from me. Just in terms of expectations for downgrading into, into FY 2024, obviously noting, FY 2023 was quite low, so I'm just keen to understand just how you're thinking about that into FY 2024. Cheers. Thanks.
Oh, look, it, it'll be modest. You know, to be honest, Julian, I know a lot of people spend time and think about, downgrading. It's not something that really captures my attention. It was low last year. We regard downgrading as a saved tool, as much as a, a loss in, revenue, and activity has no impact on, on the margins. There, there'll be some, downgrading. It's not, not one personally and nor the company spends a lot of time, talking about.
Okay, thanks. In terms of just the, the risk margin and the OSC impact, how should we be thinking about that into 2024? Is that, is that likely to be unwound, into, into 2024, particularly as, as claims are normalizing?
Well, well, I mean, yes, because it's there for a current liability. I guess the question really is then on the risk margin, because there has been an increase on the risk margin and whether that will need to be retained throughout the year or released. At this stage, we think that the risk margin's appropriate, we'll continue to assess it. Like I said, you know, given where claims developed, not only over the fourth quarter, but also as we look back in hindsight, the risk margin was considered appropriate. You know, we'll consider it over the course of this half.
It probably is a source of.
Okay, great. Thanks. Just last, last question from me. Just in terms of the international business, so you've had really strong growth there over the second half. Can you just maybe comment on expectations for growth there and also just gross margins into 2024? Cheers. Thanks.
Probably be hesitant on gross margin. In terms of overall growth, we've seen a good, a good kickback in, in those areas. Interestingly, it's still not back to pre-pandemic levels, from the numbers that, that we're seeing. We're also seeing, students return a little bit later as well. I'll leave you sort of to make your own, own conclusions on that.
Yeah, look, it's, it's difficult to predict for the reasons Nick mentioned. I-
You know, if you're looking for a guide, we, we certainly have aspirations to get the combined businesses to back to where they were pre-COVID. You maybe draw some sort of line through that logic. Actually predicting growth numbers, the way things are, and margins, the way things are, particularly with students, which is going particularly well, but not making the margins that we, that we were pre-COVID for the reasons I've mentioned, largely the aging of the risk pool. Probably the best guide, just look back pre-COVID and see what we're doing and, you know, what might be a reasonable assumption.
Great, thanks so much.
One moment for our next question. Our next question comes from Siddharth Parameswaran with J.P. Morgan. Your line is open.
Good morning, gentlemen. A couple of questions, if I can. Just so to be clear on whether you're calling the COVID period closed, so your promise for not co- profiting from COVID. I mean, I take it by dropping the DCL. You do say it's accounting related, but you're also saying unlikely to see any more give back. Just want to be clear, from here, in the way you're looking at things, the way you're going to be acting in terms of profit margins, et cetera, the experience, that we see is how you're going to be pricing, and there won't be any more... You know, we, we should, there, there shouldn't be any allowance for any, I suppose, any other adjustments relating to that promise going forward. Would that be a fair way of looking at what you're saying?
Yeah, no, that's right. COVID, from a purely accounting commercial point of view, is over, as Nick mentioned. In terms of the consequence of COVID, not so over, because as I've touched upon today, you know, we will move back towards whatever the new normal happens to be. We'll see some efficiency improvements in the delivery of treatment. I've gave some examples there today around psychiatric care and rehabilitation. However, we will see increased pressure amongst providers, particularly the hospitals, who have suffered badly during COVID-19, to recover their margins. You know, there's quite a few moving parts, Sid.
My, my question was specifically about the promise, the promise not to profit from COVID.
Well, we're very comfortable that we've met our commitments, that we made at the time around profiteering, is the word I'd like to use, rather than profits, because we obviously have made profits during COVID. We believe we've been true to that commitment, and, you know, again, it's, as Nick mentioned, we have to do a return to the Department of Health in the weeks ahead, and, but hopefully that will be the end of it.
In terms of pricing, I think I covered that, Sid. That's the other, you know, enormous moving part here. We've just had a period of very low price increases, most, most of which were deferred as, as well. I think the government will be, will accept, as they always have in the past, our, you know, rational pricing applications, which basically says we need to price products to cover the rising cost of medical inflation.
Question just on the risk equalization impacts in the period. I mean, I think you flagged quite a large benefit over the year, and that's been a consistent theme during the COVID period. I'm just keen to understand what you expect going forward.
Yeah, quick-- just quickly, Sid, on that, remember, those risk equalization benefits are based off the expectations of February 2020. You know, that AUD is a trend, if I could put it that way, as opposed to actually an actual AUD amount, because the base of what was assumed back then has changed dramatically as member behavior across the industry has changed. From that perspective. Having said that, we clearly did get a benefit over the last few years from risk equalization that we were then able to price in.
Yeah. So shifts in hospital treatment across the industry are exaggerated for us because we're such a large contributor to risk equalization. We saw an exaggerating saving during COVID, COVID-19, and we'll probably see an exaggerated liability associated with the return to whatever the new normal is. As I've mentioned, it's just, it's just a factor in the overall claims ex-experience, and we'll price that in and deal with that as we always have.
Okay, just final question, just on the w-where claims are, I mean, you. The wording isn't very very clear at the moment. I mean, you're saying that you're expecting inflation to trend back to previous ranges, 4%-6%. I'm just wondering, the actual cash paid versus your pricing assumptions, could you give us some idea of how that trended over the year or over the second half? How much below are you versus that, that figure?
Can you help me out with that, that again, Sid?
... The cash payments are tracking well below your assumptions on pricing and what you might have thought pre-COVID levels were. Just wondering if you could help us understand where they are at the moment on a cash basis.
I, I, I might answer it a different way, or maybe we can, can take it up this afternoon. Kind of the, I, I guess the way that I'm looking at that 4 - 6, is that if you, if you wanted, a real bear, you know, the bear case, you'd, you'd put the, you'd look at the incurred. If you want the bull case, you, you start with the base of the paid, and then you add your inflation and your growth on, on those. I think the answer is probably somewhere in between in terms of, you know, where to apply your growth rate assumption and, and the, the, the guidance we've given you on, on inflation. Yeah, it's kind of probably somewhere between paid and incurred.
Okay. I, I might take that one offline. Thank you, thank you.
One moment for our next question. Our next Kieren, sorry, our next question comes from Kieren Chidgey with Jarden. Your line is open.
Morning, Mike. Nick, just a couple, maybe just starting on a similar topic around risk equalization. Following on from Sid's question, just going back to your gross profit driver slide, which I think is slide 11. Now, there's a number there of, I think, AUD 154 million called out as the risk equalization benefit during the period, which is about 70% of your ARHI year in, in the full year. I'm just wondering, you know, when, when you make the comment, and I note further down that page, obviously, the premium deferral, cost of AUD 70 million broadly offsets the ARHI claims, benefit in the period. When you sort of make the statement around not profiteering from COVID, how does the risk equalization, issue feed into that?
I, I don't think... Hi, Kieren. I, I don't think anyone's thought a lot about it, really, when, you know, the industry made the statement about not profiteering from COVID and compensating member, members for the loss of treatment or the referral of treatment. I don't think anyone really contemplated, well, how do you make sense of that when part of the savings risk equalization? As I mentioned earlier, why would we compensate with cash, for example, our members, for treatment not incurred by the members of other health, health insurers? The way we've thought about that was say, "Well, look, we, we shouldn't.
We'll compensate our members for their loss of treatment, but we'll compensate, because we've got lower claims saving, our members should naturally benefit from that, and we'll compensate them through lower premium increases, you know, compared to the likes of Medibank Private or Bupa or HCF. That's, that's certainly the way I've thought about it, but there's no developed science or guidance practice notes that I've seen from the regulators on the question. You know, at the end of the day, we've got to sit back and look ourselves in the mirror and say, "Look, did we do the right thing by our members?" We emphatically believe we have.
Kieren-
Thanks
You've also got to remember that that 150 that you've referred to is not, it's against a base of what we thought FY 2023 may have been back in FY 2020, back in February 2020. Remember that, you know, any growth rate assumptions that you apply are not to the net risk equalization number, but you're applying % differences to both the calculated deficit as well as the gross deficit. You know, kind of 2%, 3%, 4% changes on calculated deficit and gross deficit, especially if they're going in different ways, can start to really expand the number. You know, again, it was just trying to give an idea, that slide, as opposed to say that that's the real AUD number.
Okay. Conceptually, pre-COVID, you're obviously pricing your policies for that higher risk equalization liability you'd, you'd have to sort of pay into the industry. How has sort of that evolved? You know, is your pricing now updated to reflect a sort of, a, a sort of lower risk equalization, or are you still assuming that sort of pre-COVID level within your pricing?
I mean, we've got views of what we think will. You know, we've got a view that pricing should reflect permanent savings. We've got a view on what we think permanent savings are in terms of the overall modalities in claims. That, that will end up being reflected in our pricing submissions.
Kieren, you appreciate one of the reasons the industry was so keen, on premium deferrals rather than lower increases per se, was it didn't want to erode the base, recognize at some point post-COVID, things would move back to whatever the new, normal is. You know, we've certainly thought that way. We have, we have reduced, the base, I suppose, through the 2 low pricing increase rounds we, we have. You know, we're confident that, we can rebase, our high pricing at the next round and subsequent rounds to meet whatever that, additional risk equalization liability may turn out to be.
Okay, and just a second question on the, again, on aHHi, but the other expenses within that. Can you just call out exactly what the dollar benefit is? I, I think you mentioned a number of close to AUD 15 million across the group. Is that all in aHHi in terms of that IT write down? And then I'm just interested in where, you know, you expect that other MER to trend over the medium term, given it's obviously lifted quite a bit over the last couple of years.
Yeah. The vast majority will be in ARHI. It was a combination mainly of software and then some of the building. All the software was in ARHI, and it, most of the, most of the lease expenses end up being allocated into ARHI, so pretty much all, all in ARHI. Then, going forward on other expenses in MER, we recognize that it is higher than it's been, and we are investing against the P2P.
Okay, no sort of number you can peg it to in terms of what, what-
Look, I've always-
historically is a more reasonable number?
Back of the arm. This is back of the arm. I've always thought we should be able to run the business at AUD 0.06 on the dollar on day-to-day operations. Would we invest another 50 basis points in improvements like, like, around P2P, and we'll pretty much spend whatever we're able to spend on marketing acquisition because the economic case is still compelling for investing in acquisition. The limiting factor there becomes around pricing and government scrutiny.
Great. Thanks, guys.
One moment for our next question. Our next question comes from Vanessa Thomson with Jefferies. Your line is open.
Good morning, Mark, Nick, and Ros. Thank you for taking my questions. I just wondered if you could give us a little color around the investment income. It's a neat turnaround in FY 2023. I just wondered how that was comprised.
Yeah, we usually, Let me just check in the back of the very back of the investor pres. We do have the investment asset allocation, so you'll be able to see it. Broadly, kind of three things helped. If you remember last year, you know, some of the larger losses we made was mark-to-market on our sovereign bonds. You know, which is sort of ironic for a very safe asset class. They, they came back a bit. In our responsible in investing policy, we do take a relatively low position in energy and a higher position in tech, and that the turnaround in tech assisted as well, plus the higher cash rate.
Thank you. Just one question on the NDIS strategy. We're seeing the participants increase to 37,000 in through 2024. I just wondered if you'd give us some feeling for how that will play out. I know you said EBITDA margins are a little bit lower because of the investments, and you've also discussed potentially beginning support coordination. I just wondered how that would play out through FY 2024. Thank you.
Yeah, look, it's a big, big question. Good one. You know, ultimately, look, I wouldn't say we're limited by our funding envelope. We figure we raised AUD 160 million in equity capital and maybe another AUD 60 million in debt, and you've got AUD 220 million to play with. We're not there yet, but we're getting closer. That's not to say that if the right economic opportunity presented itself, we wouldn't invest, because, you know, we do have a level of surplus capital at the moment. But you expect that we'll land around that 50,000-60,000 number by 2025 at the latest.
At the same time, in a way that I described earlier, we're very focused on integrating these businesses, getting the right technology in, in place, 'cause we think technology, apart from being a better experience for our participants, is crucial to its efficiency and thereby, long-term sustainability. You know, we're looking at technologies, for example, which would harness generative AI to help people design a plan. You know, electronic marketplaces, which will help people select providers and, you know, heavy digital online engagement for participants. As I touched on earlier, we also see this kind of platform and value proposition as potentially attractive to those 3 million Australians who identify as having a disability but don't, don't, don't qualify for NDIS funding. That's where our headspace is.
In terms of support, coordination's an interesting one. Look, my own personal theory is the NDIS, one of its flaws, it's been designed around institutional arrangement rather than the participant, the customer. Hence, you have all these various silos within the scheme. Part of our thing is: how can we bring these silos together? You know, support, coordination, and plan management logically come together as a service for participants. We haven't yet invested in support coordination. It's fragmented. There are reported issues if you talk to some of the operators who provide support coordination. There are issues around its economic sustainability.
we're thinking through that and how, and about how they could be integrated and in, you know, with one fee rather than separate fees for design and procurement and management, how we might be able to service other participants.
Thank you very much.
I was in Cairns. We're, we're, we're, one, one of the businesses we've acquired have a, you know, very significant position in, in Cairns. You know, we have several thousand participants, and the people up there who have now joined the company, have, you know, been fantastic at servicing and supporting those people. I'm, could be wrong, but I, I recall them saying there was 180 support coordinators in, in the Cairns district. You know, you ask yourself, "Well, look, is that the future? Or is there a, you know, a, a better model where we can work with those people who are so expert in helping people procure their disability services?" Again, as I keep saying, make for a more seamless, integrated, improved experience for participants.
Thank you. That's great.
One moment for our next question. Our next question comes from Siddharth Parameswaran with J.P. Morgan. Your line is open.
Thanks. Just a question on capital. Hoping, Nick, you could just, you just provide us some guidance around your thinking around whether you're happy with current, or, you know, we should be thinking about, some usage of that capital, of that excess capital.
Sorry, Sid, you literally cut out at the critical time, and then you came back in.
Oh, sorry.
Could you repeat the question, please?
Sorry, the question was just around capital. You're well above your target 1.5-1.6x range. I'm just keen to understand whether you're happy to sit there currently, or whether we how we might think about you getting back to your target range.
I think that, again, I, I look more at the, the group side, 'cause that, that capital is in the, in the health fund side. That just gives an indication that the, the health fund does have, have surplus, but then also that the overlay on, on relatively low, low group gearing and, and, and leverage. Potentially, there, there is some opportunities, but we haven't, we haven't spent all the money we're expecting to spend on the NDIS yet. We've got a, a couple more, we've indicated we've got a couple more in the pipeline, and then we've got the integration spend as well. We'll keep those going as opportunities as opportunities present.
In terms of, of whether that may translate into any excess dividends, I think we'll be retaining the, the policy, it does give us confidence that we can take into account the, the, and, and adjust for what, what would, will end up being lower profitability under AASB 17 in, in FY 2024. As we said at the, at the presentation a month ago, we don't expect there to be material differences in 2025, it gives us confidence in, in 2024 to allow what will effectively be a, a slightly higher payout ratio.
Yeah. Yeah, Sid, we've always targeted ourselves, as you know, on being capital light or capital efficiency. Efficient is probably a better way to describe it, but where we're sitting now, as Nick mentioned, there's still a couple of acquisitions, we're confident on completing. It probably leaves means we have, what, Nick, AUD 50 million-AUD 60 million in surplus capital, so it's not that much in the scheme of things, and there are so many opportunities floating around at the moment. I, we, we'll be sitting pat on the current position, and as Nick said, just holding to our current dividend policy.
That's, that's quite clear. Just one, one very final question from me, just on the, the risk margin increase. It wasn't completely clear whether there was a in payments or whether this is just precautionary that, that came through. I mean, your actual versus expected. Can I, can I be clear that, that actually there was reach there, which is leading you to be more cautious? I'm just, I'm just trying to understand why there is an increase in the risk margin.
Sorry, Sid, it was really hard to hear that question.
The risk margin. What, what's the rationale?
Oh, I mean.
Can you, can you hear me?
The increase in the risk margin.
Just the risk margin, just the increase in the risk margin, just from, just over the year, very, very large increase in the second half. Just wanted to be clear what, what drove the increase in the risk margin? Were there any visible trends? Because I, I couldn't quite pick it up in the commentary as to what drove that.
Maybe you could describe it as an abundance of caution, Sid. We did, for example, have some dramas with travel claims during the second half of the year, and we diverted resources to address that, which we did, I'm happy to say, very, very quickly, but it did have some impact on claims processing times in our high and, you know, they're largely behind us now, but there, there was certainly, that was one case of, for the risk margin. Then there's just sort of quite. You know, with the DCL now gone, and recognizing that there are still unknown COVID impacts, it just, and we're certainly out, certainly I actually felt it appropriate to apply that additional level of security and confidence.
Those will go under risk for us as well, aren't they? IFRS 17, sorry, the risk margin?
No, the risk margin stays. It's part of the OSC.
Okay. Okay, thank you.
Again, ladies and gentlemen, if you have a question or a comment at this time, please press star one one on your telephone. I'm not showing any further questions at this time.
Okay. Look, thank you, everybody, for attending today. It's much appreciate. You know, hopefully you can take from this morning's presentation that we're quite pleased and proud about last year's achievements and the results, and while there aren't challenges to be navigated, that's just usual, and we remain very confident about the outlook for the company, and especially, you know, us transforming the company in a way we're described to be as much a health management company in the future as we have been for so long as purely a health insurance company. Thanks for your time today, and enjoy the rest of your day.
Ladies and gentlemen, this concludes today's presentation. You may now disconnect and have a wonderful day.