Agenda 8:00 Breakfast / Registration 10:00 Q&A 10:40 Coffee Break 11:50 Q&A 12:30 Closing

Transcription

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2 Agenda 8:00 Breakfast / Registration 8:30 CEO Presentation (José Seripieri Filho) 9:00 COO Presentation (Eduardo Noronha) 9:20 Presentation Commercial Affinity (Rafael Cavalcanti, Alberto Bulus and Leonardo Guerreiro) 10:00 Q&A 10:40 Coffee Break 11:10 Presentation Operations (Alessandro Gonçalves) 11:30 Presentation - Technical Area (Ricardo Ramos) 11:50 Q&A 12:30 Closing

3 José Seripieri Filho

4 Basic, Complementary, Supplementary or Substitutive Health Supplementary Health Art Health is a right of all and a duty of the State... Complementary Health

5 Basic, Complementary, Supplementary or Substitutive Health Pooled funds will never be able to cover 100% of the population for 100% of the costs and 100% of needed services. WHO (World Health Organization) Substitutive Health

6 Current situation in Brazil Base 2012 SUS R$97.8 Billion* Million people** Supplementary R$ Million people Billion*** R$ per capita R$ 1, per capita 2.7x * Source: Ministry of Health Estimates for Health Care Expenses - SUS 2012 ** Base Projection IBGE excluding supplementary health beneficiaries ***Source: ANS (Apr/2013 Health Care Map), IBGE and MH *** Includes only health care expenses

7 Health care expenses by age group in the world (% of GDP per capita) Source: Pellikaan and Westerhout, 2005.

8 Nuclear magnetic resonance imaging rate Per 1,000 inhabitants/beneficiaries The nuclear magnetic resonance imaging rate for supplementary health in Brazil is up to 92% higher than the average rate of the OECD (Organization for Economic Cooperation and Development) and 18x higher than the SUS rate. Sources: Ministério da Saúde/DATASUS and SIP/ANS, OECD Heath Data (1) It does not include beneficiaries of supplementary health / (2) Only beneficiaries of supplementary health

9 % of the population Aging of the Population 20% 15% 65+ years 10% < 5 years 5% Source: United Nations Department of Economic and Social Affairs, Population Division. World Population Prospects Source: Pellikaan and Westerhout, 2005.

10 Change in the age structure of the population Source: Pellikaan and Westerhout, 2005.

11 Increase in annual income per capita in Brazil (US$) 317.4% 12,696 10,710 7,197 8,628 8,251 3,042 3,610 4,743 5, Source: ABEP Brazilian Population Studies Association

12 Beneficiaries (million) Expansion of the private health sector in Brazil Source: Caderno ANS Sep/12, IBGE and Growth Estimates 2.9% per year

13 The health sector is an economic hub that generates wealth and can promote economic growth Sector 2011 Revenue (R$ bn) % of GDP Direct jobs Supplementary Health % 357,000* Banking % 507,000 Construction 204** 5.0% 2,909,000 Home Appliances % 180,000 Automaker*** % 126,000 Textile % 1,700,000 * IBGE 2009 Satellite accounts (Supplementary health + Private Hospital Care) ** Value added *** Excludes agricultural machinery Source: ANFAVEA, FEBRABAN, IBGE, RAIS 2011, ABINEE, ANS and ABIT/ Caderno ANS Dec/2012

14 Net margin Comparison with other sectors Sector 2011 Net margin (%) Supplementary Health 3.6% (2.0% in 2012 through September) Banking 29.2% Construction and Real Estate 14.0% Electricity 11.9% Oil & Gas 11.0% Telecommunications 5.8% Source: Statistics Yearbook of Publicly-Held Companies 2012/2013 (ABRASCA); FOCO Supplementary Health Dec/2012 (ANS)

15 Qualicorp s Positioning Relationship with clients Relationship with providers (MLR management) Client + $$$ - $$$ Operators Insurers Providers Superinflation Private Healthcare Plan Law Creation of ANS ANS regulation on Affinity plans Currently Until Junior Individual Salesman First affinity agreement Foundation of Qualicorp General Atlantic Carlyle

16 Qualicorp s Positioning Relationship with Clients Relationship with providers (MLR management) Clients Benefit Administration Operators Insurers Health Management/Administration Providers Benefit administration Collection 91% and individual services ( owner of the client ) Medical Management Pool of clients TPA (Third Party Administrator) HCIT 3% (Healthcare Information Technology) PBM (Pharmacy Benefit Management) 6% Brokerage (sales) Mass products PPO (Preferred Provider Organization) 1 6 Qualicorp does not undertake any underwriting or reimbursement risk Services already offered by Qualicorp (in expansion) Under analysis as necessary

17 Business Model Client Benefit administration Processing of transactions Call center Monitor chronic patients and pregnant women Provide healthcare services TPA Risk management PPO PBM HCIT Benefits consulting services Brokerage Mass insurance products Qualicorp Qualicorp Operator Insurer Operator Insurer Operator Insurer Operator Insurer Operator Insurer Operator Insurer Operator Insurer Operator Insurer Operator Insurer Operator Insurer Operator Insurer Operator Insurer

18 COO - Eduardo Noronha

19 Qualicorp s Positioning Results drivers and their challenges Relationship with clients Relationship with providers (MLR management) Clients Operators Insurers Providers Sales and Distribution Regional penetration Productivity of current channels New channels Products and Associations Marketing and segmentation Production Efficiency Services Billing Innovation Technical and risk management Health management Technical and Actuarial Monitoring Client retention and profitability Retention and loyalty Cross/Up-selling Credit recovery

20 Qualicorp s Positioning Results drivers and their challenges Relationship with clients Relationship with providers (MLR management) Clients Operators Insurers Providers Sales and Distribution Regional penetration Productivity of current channels New channels Products and entities Marketing and segmentation Production Efficiency Services Billing Innovation Technical and risk management Health management Technical and Actuarial Monitoring Client retention and profitability Retention and loyalty Cross/Up-selling Credit recovery

21 Client retention Price, Services and Medical Network are the most relevant attributes What matters the most when contracting a health care plan? Company s tradition in the market 15% 1st+2nd+3rd references Grace periods 16% Refund options 18% Type of coverage offered 26% Coverage area 42% Price 59% Service quality 61% Accredited medical network 63% Source: IBOPE Inteligência

22 Client retention Why contracted and why cancelled Qualicorp s services? Situation after cancellation: 36% do not have a new health care plan 33% migrated to a family/sme plan 31% migrated to a corporate plan Why contracted? 54% Price and cost/benefit 29% Recommendation of Association Why cancelled? 55% Financial reasons 16% Corporate plan RETENTION OPPORTUNITIES Source: IBOPE Inteligência

23 Client retention Retention actions Actions to improve the retention process: Development of new services offered; Insourcing of retention operations and change in management (specialization); Change in the process and anticipated suit of default clients (anticipation of collection bar); Beginning of development of predictive modeling with preliminary suit; Improvement of incentive models in the operational and executive levels; Creation of the Client Retention Committee.

24 Default Management Main action fronts In our business, Cancellation and Default go hand in hand : Retention actions; Campaigns to encourage direct debit in sales and client base; Contracting of 2 specialized collection firms; Implementation of pilot plan to send bad payers to the black list (SERASA); Development of scoring for collection type of contact, negotiation options, etc.

25 Qualicorp s Positioning Results drivers and their challenges Relationship with clients Relationship with providers (MLR management) Clients Operators Insurers Providers Sales and Distribution Regional penetration Productivity of current channels New channels Products and entities Marketing and segmentation Production Efficiency Services Billing Innovation Technical and risk management Health management Technical and Actuarial Monitoring Client retention and profitability Retention and loyalty Cross/Up-selling Credit recovery

26 Production - Efficiency and Costs Opportunities Some actions to gain efficiency and reduce costs: Implementation of matrix budget; Revision of the individual goals breakdown model; Indirect employees; Contract renegotiation (Telecom, Clearance/Post Office, Call Center); New IT platform control and automation.

27 Qualicorp s Positioning Results drivers and their challenges Relationship with clients Relationship with providers (MLR management) Clients Operators Insurers Providers Sales and Distribution Regional penetration Productivity of current channels New channels Products and entities Marketing and segmentation Production Efficiency Services Billing Innovation Technical and risk management Health management Technical and Actuarial Monitoring Client retention and profitability Retention and loyalty Cross/Up-selling Credit recovery

28 Rafael Cavalcanti Alberto Bulus Leonardo Guerreiro

29 Growth curve Our portfolio expanded at a CAGR of 42% in the last 2 years, thanks to a substantial increase of 39% in gross sales from 2010 to Affinity portfolio evolution Gross Sales Evolution (base 100) 139% 114% 100%

30 Future vision Continue expanding. More of the same? There are opportunities for new growth curves. 1 Market analysis 2 Distribution channel analysis

31 Market Potential by region study (Business intelligence and SD&W) Peer analysis Historical performance

32 Distribution channel Analysis of the distribution channel dynamics of health care plans in Brazil Ibope survey perception of sales agents about Qualicorp Definition of the channel development strategy

33 Our strategy MARKET CHANNEL Geographic expansion Boost distribution productivity External channel Own channel New channels Objectives: Exceed the 2013 target Increase sales to a new level within 3 years.

34 Geographic expansion

35 Current scenario NNE Consolidated in Salvador COMGES Consolidated in Federal District (DF) RJ Consolidated in the capital city SP Consolidated in the capital city NNE - North and Northeast COMGES Midwest, Minas Gerais and Espírito Santo RJ Rio de Janeiro SP São Paulo 70%

36 Expansion process Beginning of Operations Natal and São Luiz Consolidate Operations Recife and Fortaleza Consolidate Operations Belo Horizonte and Espírito Santo Consolidate Operations Baixada Santista and ABC Consolidate Operation Curitiba and Porto Alegre

37 Consolidated expansion NNE Salvador, São Luiz, Natal, Recife and Fortaleza COMGES Brasília, Belo Horizonte and Vitória RJ Capital city SP Capital city, Baixada Santista and ABC NNE - North and Northeast COMGES Midwest, Minas Gerais and Espírito Santo RJ Rio de Janeiro SP São Paulo South Curitiba and Porto Alegre

38 Distribution channel OUTSOURCED CHANNEL

39 Outsourced channel Strategy for the channel Reorganize investment based on segmentation (production x market share) Be closer to the sales agent

40 Outsourced channel Outsourced platforms Platforms Sales Volume Quality of Sales Remuneration and incentive based on: 1. Analysis: Total Sales X Qualicorp Share 2. Average customer retention 3. MLR per Platform Other actions: 1. Ongoing training 2. Sales service, information and support

41 Mkt Share QC Case Analysis Confirmation of the 3 rd Payment 100% Broker 13 (80 lives) Broker 14 (70 lives) Broker 07 (300 lives) Broker 04 (900 lives) Broker 03 (900 lives) Broker 15 (50 lives) Broker 10 (150 lives) Q1 Broker 09 (150 lives) Q4 Broker 05 (600 lives) Broker 06 (500 lives) Broker 02 (900 lives) Broker 01 (1.000 lives) Q2 Q3 Broker 08 (220 lives) Broker 12 (100 lives) Broker 11 (130 lives) 3% Sales - Broker

42 Outsourced channel Producers out of capital cities Increase share of brokers out of capital cities on total sales through distance communication tools: Agent Support by Phone Agent s Portal SMS Marketing

43 Outsourced channel Qualicorp Agent s Portal Registration Commission report Report generation Online training workbook Incentive campaigns Download center Market/Qualicorp news Digital guide: Price and plan simulations Stimulus to consultative selling Complete information on products

44 Distribution channel OWN CHANNEL

45 Own channel Strategy for the channel Expand own distribution network Increase internal team s productivity Create new own channels

46 Own channel Expand network and increase productivity Intensify training for new consultants Training based on best practices Development of distribution centers Increase Internal Channel s sales Implement the Sales Management system Consultant Length of service New consultants Qualified consultants 180 days 360 days or more Increase Sales by Consultant Standardization and Specialization Goal 20 Lives/month 30 Lives/month

47 Own channel New own channels Telemarketing Franchises Strategic Partnerships E-commerce

48 New channels E-COMMERCE (Phase I) Plans and operators research Information on coverage, healthcare provider network, etc. Price simulation Main selling features: Click to call I am interested button Online chat Online affinity request

49 New channels NNE Salvador, São Luiz, Natal, Recife and Fortaleza E-Commerce Throughout Brazil. Telemarketing Throughout Brazil. COMGES Brasília, Belo Horizonte and RJ Capital city Vitória SP Capital city, Baixada Santista and ABC NNE - North and Northeast COMGES Midwest, Minas Gerais and Espírito Santo RJ Rio de Janeiro SP São Paulo South Curitiba and Porto Alegre

50 Q&A

51 Coffee Break

52 Alessandro Gonçalves

53 Operations Executive Board

54 Affinity Operations Acceptance Sales New life +170,000 proposals accepted in day process by proposal on average. Operations in São Paulo

55 Affinity Operations Card Distribution Registration and Interface Operators Welcome Kits 2 copies Renewals SP 2 Logistics operators SP and RJ among others... Interface with over 30 Operators in affinity

56 Affinity Operations Revenue Default mail notices Calculate selling campaigns. Check invoices from Insurance companies. Mail bill. Calculate commissions to brokers. +600,000 bills issued per month (77% bank bills)

57 Affinity Operations New Affinity Module Implementation Project Step-by-step implementation 17-month duration R$40 million investment AREAS AND PROCESSES INVOLVED AFFINITY COMMISSION PAYMENT ACCEPTANCE INTERFACE AND HANDLING CUSTOMER SERVICE RECONCILIATION ACCOUNTS PAYABLE ACCOUNTS RECEIVABLE Benefits Business Process Automation More agile New portfolio Migration process (New Acquisitions) Greater flexibility, capacity and speed to face business changes Guaranteed Business Continuity NUMBER OF REGISTRATIONS PRODUCTS RETENTION

58 Customer Management Welcome Telemarketing SAC Retention Class TPA Back Office +3.8 million calls answered in Maximum of 20,000 calls in one day. Approximately 450 call center operators

59 Customer Management (VIPs) 25,000 thousand VIP customers 15 special services 1,300 customers served per month

60 Customer Management (VIPs)

61 Customer Management (VIPs) Filling for reimbursement process. Payment negotiation. Inclusion of dependents. Other... 1 point of service in Avenida Paulista, +45,000 people served in points located in associations, +72,000 people served in 2012

62 Corporate Operations Approximately 1.2 million corporate plans. 272 companies and 56 Operators (health and dental care and life insurance). +200,000 registrations in ,000 invoices checked in among others ,000 cards handled in ,000 reimbursement analysis in 2012.

63 Operational Management and Innovation Follow-up of Operation Indicator Book Follow-up of 21 projects (March/2013)

64 Costs Opportunities on the way... Reduction in logistics costs Renegotiation of supplier agreements Optimization of customer service (Call Center)

65 Ricardo Ramos

66 Area s Objectives Maintain portfolio s MLR under control; Seek the best price adjustment as possible; Contribute to reduced churn rate.

67 Risk Management Technical Welcome Call Password Monitoring Antifraud CPT Rules DPS Content Technical and Actuarial Monitoring Health Management

68 Health Statement

69 Temporary Partial Coverage (CPT) Rules NATIONAL AGENCY FOR SUPPLEMENTARY HEALTHCARE NORMATIVE RESOLUTION RN no. 162

70 Technical Welcome Call Variables considered in the operation: Specific demographic behaviors; Specific geographic behaviors; Sales channel; Filling in the Personal Health Statement (DPS).

71 Password Monitoring Variables considered in the operation: Receipt of passwords to access operators accredited network; Password classification (health severity, cost and term); User classification (recent or not); Healthcare team in contact with providers (hospitals, healthcare facilities and laboratories) and beneficiaries; Identification and indication of opportunities to other Qualicorp areas and for medical audit of operators.

72 Anti-Fraud Variables considered in the operation: DPS not compatible with accredited network password request; Nurses specialized in counterclaim; Distribution channel origin; Type of procedure required in accredited network.

73 Health Management Variables considered in the operation: Health newsletter accompanying bank bills; Monitoring of chronic condition patients health coaching; Outbound call center in which nurses maintain a monthly contact with beneficiaries participating in the program; A team composed of nurses and dietitians who visit the beneficiaries with worse health conditions.

74 Technical and Actuarial Monitoring Variables considered in the operation: Monthly monitoring of portfolios MLR; Calculation of variations in medical and hospitalization costs (or medical inflation); Statistical and actuarial analyses of estimated MLR and premiums by operator, geographic location, product and sales channel; Coordination of technical area s management risk actions; Adjustment price negotiation with Insurance companies.

75 Technical and Actuarial Monitoring

76 Q&A

77 Closing Remarks

78 Thank You