Bupa's 2021 Group full year financial results

Δευτέρα, 14 Μαρτίου 2022 02:03
Bupa's 2021 Group full year financial results

Financial Headlines

- Revenue1 of £12.9bn was up 8% at constant exchange rates (CER) (20202: £12.0bn).

- Underlying profit3 before taxation of £405m, was up 14% at CER (20204: £354m) as the impact of reduced COVID-19 lockdowns meant our health provision and aged care businesses operated with fewer restrictions and customers were able to access services more easily. This was offset by increased insurance claim levels resulting from reduced disruption to elective procedures compared to 2020.

- Statutory profit before taxation of £423m was up 7% at AER (20204: £396m), reflecting higher underlying profit, and gains made on acquisitions and divestments.

- Solvency II capital coverage ratio5 remains strong at 179% (2020: 160%).

Business context

- Full year 2021 results reflect strong customer growth across our insurance businesses, improving performance in health provision and aged care as we emerge from the pandemic.

- For health insurance, our largest business line, we undertook a range of actions to support our customers including announcing plans to return cash to Australian health insurance customers and processing payments to eligible UK Insurance customers following our 2020 return of premium pledge. In the UK, we were the first major health insurer to make such payments.

- There are major shifts in customer expectations and engagement, which have been accelerated by the pandemic, particularly in digital healthcare. We have refreshed our purpose, set a new ambition and launched a new strategy to address these changes. Our focus is on embedding this strategy and leveraging our strengths while we transform Bupa.

Iñaki Ereño, Group CEO, commented:

“Our 2021 results reflect the underlying strength of Bupa, with strong customer growth in several of our health insurance markets and activity in health provision returning to normal. This performance shows how we have been able to grow and provide high-quality care for our customers, patients and residents while we continue to navigate the pandemic.

“I see transformation as our route to growth and it is at the heart of our new plans. As restrictions ease, we will build on Bupa’s strong platform and I’m confident that our new strategy will position us in the best way for success into the future.”

Market performance (all at CER)

- Asia Pacific6: Revenue increased by 4% to £5,498m mainly driven by volume growth across our businesses. Underlying profit was £222m, an increase of 69%, reflecting the non-recurrence of the six-month deferral of the premium increase for Australian Health Insurance customers which was implemented in 2020, and reduced losses in aged care.

- Europe and Latin America: Revenue grew by 12% to £4,004m from growth in our insurance portfolio and improved health provision and aged care results. Underlying profit was down 7% at £162m from increased insurance claim levels following reduced disruption to elective procedures compared to 2020 and challenges in our Chilean Isapre insurance business, where performance was affected by regulatory interventions impacting the whole sector.

- Bupa Global and UK: Revenue was up 10% to £3,396m. This was driven by higher health provision customer volumes and portfolio growth in our UK Insurance business. Underlying profit was down 44% to £62m, as improved dental results were more than offset by higher claims in UK Insurance and higher claim volumes, alongside products priced based on 2020 experience in Bupa Global, our International Private Medical Insurance (IPMI) business.

- Other businesses: Revenue was flat to 2020. Underlying profit was down 12% to £45m predominantly reflecting higher claims in our associate business in Saudi Arabia and the additional COVID-19 coverage included in policies in our associate business in India driving higher claims.

Financial position

- Solvency II capital coverage ratio of 179% (2020: 160%).

- Leverage7 is 27.0% (2020: 32.4%) when including IFRS 16 leases as liabilities. Excluding these liabilities, the leverage ratio is 19.7% (2020: 25.3%).

- Net cash generated from operating activities was £907m, down £429m on prior year as a result of higher claims as disruption to elective procedures reduced from 2020.

Other highlights

- We successfully launched a new Restricted Tier 1 (RT1) subordinated bond offer to the market alongside the partial buy-back of a Tier 2 bond which matures in 2023. These transactions enable us to enhance Bupa’s capital base and demonstrate the continued financial flexibility of the Group.

- We confirmed our ambition to be a net zero business across all emission scopes by 2040. We have set science-based targets which are aligned to Bupa’s contribution to keep global warming to no more than 1.5°C.

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