Nib doubles NZ earnings, sees further growth, after adding policyholders

Monday 22nd August 2016

Nib Holdings, the ASX-listed company that's New Zealand's second-largest health insurer, said full-year earnings doubled and it expects further growth in the 2017 year after adding policyholders and widening its margins.

Underlying operating profit in New Zealand jumped to A$17.3 million in the year ended June 30, from A$8.7 million a year earlier, the Newcastle-based company said in a statement. Premium revenue rose about 15 percent to A$174 million while claims rose 25 percent to A$121 million.

Nib New Zealand is part of one of Australia's largest health insurers, which today reported a 22 percent gain in profit to A$92.9 million as sales climbed 13 percent to A$1.89 billion. The company increased its New Zealand customer base to 212,497 after buying the medical insurance book of OnePath NZ from ANZ Bank New Zealand for about A$22.5 million in October and has an agreement to distribute its products through ANZ's network of wealth managers. It launched nib New Zealand in 2013 after buying Tower Medical Insurance for $102 million.

"New Zealand continues to deliver on the targets set when we acquired the business," the company said. "For FY17 and beyond we expect profitability to further improve through organic growth and increased scale."

When nib launched in New Zealand it included a direct-to-consumer strategy that it says has helped secure more than 15 percent of the health insurance market. About 45 percent of its sales came through that channel in the latest year, it said today.

The company has also pushed a 'whitelabelling' distribution strategy, partnering with Warehouse Group's financial services brand, Warehouse Money to offer health and travel insurance policies under the Warehouse brand. Nib plans to expand its 'whitelabel' channel this year with other such partnerships, it said today.

Earnings in New Zealand unit accounted for 13 percent of the parent company's underlying earnings in the year ended June 30, up from 10 percent in 2015

Nib shares last traded at A$4.80 and have gained 37 percent this year while the S&P/ASX 200 Index rose 4 percent.

BusinessDesk.co.nz

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