1. How to not loose money in Health IIC 26 September 2014

2. How to make Health profitable? Excellence across all parts of the value chain is needed 2

3. 3 Some examples of supporting elements to make Health profitable Distribution2 Product Design1  Introduce copayments  Bundling of products can allow to enhance the value proposition while controlling the frequency  Develop intuitive and easy to use front screens  Have a specialised Direct Sales Force  Control the weight of your ‘bleeders’  Ensure an end to end sales process that takes less than 10 minutes Underwriting3  Have more than 95% automatically approved  Fraud detection  Pricing including some non-clinical risk factors like:  Income  Job  Area of residence  Leisure activities

4. 4 Some examples of supporting elements to make Health profitable Network Mgt5 Claims Handling 4  Utilisation management Eg insurer determines which surgeries to be done on a day-case  Case Management  Need scale for negotiation power  Smart negotiation process (eg more proactive follow-up of peer providers)  Contracting set-up; from fee per service towards package fees or capitation IT & Infrastructure 6  Automated  Integrated with medical providers Service7  Managed Care

5. Consistent good performance on all levers is required 5 Consistenly scoring high on all levers will allow to build a product and offer it at a price that would never have been possible before

6. Example of successful Health operation in Portugal: Medis 6 UNDERWRITING UTILIZATION REVIEW AND CASE MANAGEMENT CLINICAL CARE ASSISTANCE PROVIDER NETWORK SYSTEMS DESCRIPTION OF SKILLS Ability to develop actuarially based prices and underwriting standards Ability to develop a telephone customer service unit that provides primary care advice and channeling Ability to design a high quality cost effective provider network Ability to negotiate with local providers including extensive local contacts, knowledge of relative quality levels of providers and an understanding of provider needs Ability to develop standards for controlling medical costs while maintaining or improving quality of care given Ability to set medical care standards that are locally acceptable Ability to set up a specialized IT system to support healthcare line of business Ability to design an integrated systems network

7. Medis – Key Figures Claims ratio decreasing since 2009 and significantly below market average Lower claims ratios are achieved through:  Higher prices due to higher level of service provided to Medis customers  Quality of the Medis Operations  Medis Provider Network Control Profit before taxes (million EUR) Gross Written PremiumsClaims Ratio

8. THANK YOU 8