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nib boosts profit

nib has reported a 40% increase in underlying profit in its New Zealand operations.

Monday, February 20th 2017, 12:21PM

The health insurer recorded a profit of $11.5 million in this country for the six months ended December 31.

New Zealand premium revenue rose by more than a quarter to $105.1 million.

Chief executive Rob Hennin said the New Zealand-based operations were tracking well for the full year on the back of a recent acquisition and strong customer sales.

“The acquisition of OnePath health in late 2015 has provided our business with additional leverage and scale. It’s added a further 20,000 customers to our book of business which has definitely provided additional momentum and had a positive impact on our first half underwriting performance,” Hennin said.

“Our organic growth has also been impressive, with sales up almost 20% on the same time last year. Direct-to-consumer growth accounted for more than half of our sales and has been bolstered by our distribution partnerships with brands such as The Warehouse Group and New Zealand Automobile Association.

“While still early days, our partnership with these leading Kiwi brands provide us with an opportunity to rapidly expand our business by tapping into their large membership bases,” he added.

Hennin said that while the business had experienced growth in recent years, there was significant latent demand for further expansion.

“Compared to other countries, New Zealand has a relatively low level of private health and medical insurance participation. With just over 30% of the local population currently covered we think there is a lot of potential and opportunity to grow the industry and our share,” he said.

“Add to this an ageing and growing population which is continuing to place pressure on the Government-funded hospital system, we think there is an obvious and ever increasing role for private health insurance to play in meeting the rising health needs of all Kiwis,” he said.

“Our focus over the next 12 months is on creating further value for our customers by developing better ways to manage claims and providers in an effort to keep premiums affordable and good value for our customers."

nib declared an interim 1H17 fully franked dividend of 8.50 cents per share (1H16: 5.75 cents per share). 

It updated its FY17 guidance  to be in the range of $140 million to $150 million.

 

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