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| 8-K - 8-K - TRIPLE-S MANAGEMENT CORP | brhc10016877_8k.htm |
Exhibit 99.1
29th Annual Credit Suisse Virtual Healthcare Conference November 11, 2020
*This document contains forward-looking statements, as defined in the Private Securities Litigation
Reform Act of 1995. Forward-looking statements include information about possible or assumed future sales, results of operations, developments, regulatory approvals or other circumstances. Sentences that include "believe", "expect", "plan",
"intend", "estimate", "anticipate", "project", "may", "will", "shall", "should" and similar expressions, whether in the positive or negative, are intended to identify forward-looking statements.All forward-looking statements in this news
release reflect management's current views about future events and are based on assumptions and subject to risks and uncertainties. Consequently, actual results may differ materially from those expressed here as a result of various factors,
including all the risks discussed and identified in public filings with the U.S. Securities and Exchange Commission (SEC).In addition, the Company operates in a highly competitive, constantly changing environment, influenced by very large
organizations that have resulted from business combinations, aggressive marketing and pricing practices of competitors, and regulatory oversight. The following factors, if markedly different from the Company's planning assumptions (either
individually or in combination), could cause Triple-S Management's results to differ materially from those expressed in any forward-looking statements shared here: Safe Harbor Statement 2 Trends in health care costs and utilization
ratesAbility to secure sufficient premium rate increasesCompetitor pricing below market trends of increasing costsRe-estimates of policy and contract liabilitiesChanges in government laws and regulations of managed care, life insurance or
property and casualty insuranceSignificant acquisitions or divestitures by major competitorsIntroduction and use of new prescription drugs and technologiesA downgrade in the Company's financial strength ratingsLitigation or legislation targeted
at managed care, life insurance or property and casualty insurance companiesAbility to contract with providers consistent with past practiceAbility to successfully implement the Company's disease management, utilization management and Star
ratings programsAbility to maintain Federal Employees, Medicare and Medicaid contractsVolatility in the securities markets and investment losses and defaultsGeneral economic downturns, major disasters, and epidemics This list is not
exhaustive. Management believes the forward-looking statements in this release are reasonable. However, there is no assurance that the actions, events or results anticipated by the forward-looking statements will occur or, if any of them do,
what impact they will have on the Company's results of operations or financial condition. In view of these uncertainties, investors should not place undue reliance on any forward-looking statements, which are based on current expectations. In
addition, forward-looking statements are based on information available the day they are made, and (other than as required by applicable law, including the securities laws of the United States) the Company does not intend to update or revise
any of them in light of new information or future events.Readers are advised to carefully review and consider the various disclosures in the Company's SEC reports.
Introduction to Triple-S A Leader in Managed Care in Puerto Rico Most experienced managed care
organization (MCO) in Puerto RicoExclusive BCBS licensee for Puerto Rico, Costa Rica and U.S. Virgin IslandsNYSE: GTS Premiums earned 5-year CAGR of 8.9%2019 medical loss ratio (MLR) of 84.6%Q3 2020 MLR of 82.7%As of September 30, 2020,
approximately $2 billion in cash and investments and only $54 million of long-term debt on balance sheet Solid Financials Transforming for Profitable Growth Our vision is to enable seamless access to comprehensive healthStrategic focus is on
growing our core while investing in informatics and clinical capabilities as the foundation for an integrated health delivery modelGrew MA membership from 18% to 22% over last two yearsEstablished ambulatory clinic network 3
The GTS opportunity: profitable growth and long-term value Only player with strong positions in all 3
market segments; positioned for continued expansion in attractive Medicare Advantage segmentScalable infrastructure to support managed care growth with modest incremental cost – enabling margin expansionAccelerating development of new,
value-added model of healthcare deliverySolid financial position 4
Managed Care Market in Puerto Rico Commercial Triple-S leads the market with approximately 40%
shareWe participate in all commercial sub-segmentsOver 90% retention rateMostly PPO, fee-for-service products Medicare Advantage Highest MA penetration in the nation; almost half Duals 22% market share – significant growth opportunityPMPM
premiums = 4x Medicaid and CommercialStrong retention and member affinity for Triple-S Medicaid Represents close to 40% of Puerto Rico population35% market share, with over 410 thousand membersDelivers significant scale and synergies with
Duals 5 Key segments
*Adjusts for effect of prior period reserve developments and hurricanes; hurricane favorable impact on
utilization in 2017 accounted for 330 basis points Focused on disciplined underwriting Triple-S maintains significant market share in Commercial segment in Puerto RicoFocused last couple of years on methodically reducing membership to clean
up portfolio and remove unprofitable accounts, thus improving MLRWith portfolio underwriting improving, have carefully restarted growth initiatives Commercial Fully Insured Members(as of year-end) Annual Medical Loss Ratio (MLR) Adjusted
Annual Medical Loss Ratio (MLR)* 2015 367,278 84.2% 86.6% 2016 335,643 85.2% 83.6% 2017 321,571 77.5% 76.7% 2018 311,222 82.4% 82.8% 2019 322,973 82.4% 83.8% Optimizing Commercial Segment 6
Leading Life Insurance Business Provides Cross Selling Opportunities 7 Distribution based on over
700 captive agents distributed in 25 district offices via home service and 300+ independent agents and brokersLife and cancer market share of 22.3% with over 650,000 policies in force in Puerto RicoOperates in Puerto Rico, Costa Rica, and will
soon begin offering products in Florida and Texas Market presence Provides individual life (Guaranteed issue, Term, Universal) and various alternatives of cancer products targeted to middle- and low-income segmentsGroup life, STD, and LTD
products are also offered Healthcare synergies Cross-sell opportunities Provides life coverage to TSS groups and individuals, and will reinsure life coverages to be included in most of the commercial managed care
policies
Growth in Re-designed Medicaid Program Puerto Rico government established new model in November 2018,
with a single, island-wide region where beneficiaries can choose their MCOGrew from initial membership of 288k to 385k in 3rd quarter of 2020, or 30% of the 1.2 million program beneficiariesExpected to reach 410k members by December 2020, as
competitor exits the programContract negotiations completed, rates increased approximately 8%retroactive to July 1, 2020 8 End of period Medicaid Membership
Competitive MA Offering Expands Growth Opportunities… Consistency Benefits design consistent YOY but
adding innovation Choice 75% of eligible consumers choose an MA plan Cash Designation provides additional premium in 2020 Value Continuing to optimize costs in segment to drive stronger bottom line Competitive Attractive benefits and
superior provider network Five consecutive years of at least 4.0-star designation in HMO product - provides company with growth engine 9
…Yielding Strong Performance Premiums25% growth in MA premiums in 2019 vs. 20189% growth in MA premiums
in 3Q20 vs. Q319 (YTD) Membership136,135 MA members enrolled as of September 30, 2020 25% increase from 2018 year-end membership Medical Loss Ratio (MLR)78.9% recasted MLR in 3Q20-YTD200 bps improvement from prior
year 10
Positioning for Long-Term Growth Creating long-term value by growing within Puerto Rico Expand
Medicare Advantage client base by focusing on best-in-class care coordination, clinical outcomes, enhanced benefits, and superior customer experienceContinue modernizing IT, integrating data and enhancing analytics to improve service, reduce
costs and create PHM capabilitiesSponsor Integrated Delivery Systems of Care by:Building on our investments in ambulatory clinics, primary care networks and urgent care facilitiesCreating team-based clinical programs for high-needs
populationsDeveloping high-performing, value-based Centers of Excellence 11
Ultimate goal of providing members with seamless access to high-quality, affordable and holistic
careAlignment of clinical and financial outcomes around quality of care Member-Centric Integrated Delivery Systems of Care 12 Focus Primary Care relationships on value-based outcomes and cost managementDevelop High Performance
Health Networks and Centers of ExcellenceRamp investments on connectivity and informatics to drive PHM and enhance care management performance Member Centric Integrated Care Primary Care Select Specialty Care Prevention and SDOH Ancillary
– Imaging, Lab Virtual Healthcare Pharmacy Services
13 Increasing Consolidated Premiums Earned, net ($ in millions) 2019 vs 2018Increase driven by $298
million of higher Managed Care premiums ($278 million of which related to Medicare).Enrollment increased by 203,000 member months and 69,000 member months in Medicare and Commercial, respectively. Higher average premium rates across all lines
of business.2020 vs 2019$214 million increase driven by $203 million of higher Managed Care premiums. Medicare and Medicaid premiums increased by $95 million and $105 million, respectively. Higher fully insured membership across all lines of
business. Higher average premium rates in Medicare and Medicaid.
14 Improving Loss Ratio… ($ in millions) 2019 vs 2018Claims incurred increase driven by higher
Medicare and Commercial fully insured enrollment.P&C segment claims incurred decreased $120 million, due to $128.7 million claim loss related to Hurricane Maria incurred in 2018.Improvement in medical loss ratio due to higher premium rates
and cost containment initiatives.2020 vs 2019Claims incurred increase mostly driven by higher enrollment across all lines of business. Lower loss ratio reflects impact of managed care premium rate increase and lower utilization of services due
to the COVID-19. 86.0% 82.0% 82.3% 80.1%
15 …Leading to Growing Profitability Adjusted Net Income and Adjusted Earnings per Share are non-GAAP
financial metrics and should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP. These non-GAAP metrics do not consider all the items associated with the Company’s operations as determined
in accordance with GAAP. Reconciliations to the most directly comparable GAAP financial metric and management’s rationale for the use of the non-GAAP financial metric can be found in our press releases for the quarter ended December 31, 2019
and quarter ended September 30, 2020 (https://investors.triplesmanagement.com/sec-filings/documents/default.aspx).The adjusted net income for the year ended December 31, 2018 includes $85.5 million of prior period reserve development in our
Property and Casualty segment as result of the impact of Hurricane Maria. ($ in thousands) Adjusted Net Income (Loss)(1)(2) Adjusted Earnings per Share(1)
Strong and Stable Balance Sheet 16 Continuing to prudently allocate capital 73% of investment
portfolio consists of investment-grade fixed income securitiesWell capitalized to support business operations throughout COVID-19 and beyond As of September 30, 2020:Investment portfolio of $1.9 billionNo exposure to Puerto Rico Government
bondsApproximately $130 million in cash and cash equivalentsLong-term debt of $54 million
The GTS opportunity: profitable growth and long-term value Only player with strong positions in all 3
market segments; positioned for growth in attractive Medicare Advantage segmentScalable infrastructure to support growth with modest incremental cost – enabling margin expansionLaying the foundation for new, value-added model of healthcare
deliverySolid financial position 17
Appendix
Deep Senior Management Expertise 19 Roberto García-RodríguezPresident & CEO 25+ years of
health care / legal industry experienceHas held various roles since joining Triple-S in 2008, including COO from 2013-2016Member of the Board of Directors of the Blue Cross Blue Shield Association Juan José Román-JiménezCFO & Executive
VP, Ancillary Business 30+ years of financial and health care industry experience, CPAPrior to rejoining Triple-S, was CFO of EVERTEC, a NYSE-listed payments services companyPreviously spent 15 years at Triple-S in various
positions Madeline Hernández-UrquizaCOO & Executive VP, Managed Care 30+ years of health care and financial industry experienceWas Chief Risk Officer for Commercial and Medicaid businessesSuccessfully reorganized Medicare Advantage
subsidiary, leading to upgraded HMO rating Arturo Carrión-Crespo PresidentTriple-S Vida 30+ years of life/health insurance industry experiencePresident of Triple-S Vida since 1998Also spent 11 years at Great American Life Assurance
Company of Puerto Rico José Del Amo-MojicaPresident Triple-S Propiedad 30+ years of property and casualty insurance experienceJoined Triple-S in 1998Grew through the ranks from Surety Manager to Sr. VP of Underwriting and
Claims Juan Serrano Chief Strategy Officer and EVP, Healthcare Delivery Joined in July 2020 30+ years of broad multi-sectorial experience in the health plan, care delivery and risk management fields across the Medicare Advantage, Medicaid
and commercial insurance segments
P&C Segment – Return to Profitability 20 Post-hurricanes, commercial markets in Puerto Rico
experiencing increases in pricing and modifications on policy conditions; typical following natural catastrophe eventsStabilized P&C benefiting from “hard market”; $14.5 million operating income for 2019, $4.4 million for 3Q20At the end of
2019, P&C’s RBC ratio is approximately 220% after additional capital contributions and positive results from operationsNo unfavorable prior-period developments for eight consecutive quarters; P&C adequately reserved for
hurricane-related claims By the numbers (as of September 30, 2020) Current reinsurance coverage $814 million; protects company for losses caused by 1-in-250-year catastrophic event Gross hurricane-related claims and LAE paid $757
million Hurricane-related cases closed ~97.5%