nib reports profit drop on weak dollar

Insurer nib has reported underlying operating profit of A$23.4 million ($25.28m) for its New Zealand operations in the year to June, down 0.4% on last year.

Wednesday, October 31st 2018, 1:35PM

Premium revenue dropped 0.6% to A$198.1m.

nib said the decline in the New Zealand result was down to the weak dollar. In New Zealand dollar terms, premiums grew 1.9% and underlying profit 3.8%.

The number of policy holders in this country grew 2.3% over the year.

"Our multi-channel distribution strategy made good progress during the year with net policyholder growth of 2.8%. We recently revamped our direct-to-consumer (DTC) line launching a product range specifically tailored for millennials, new families and migrant families, which also includes offering bilingual services to members," nib said.

"Our DTC and whitelabel portfolio, which includes leading Kiwi brands such as Stuff and AA, now account for almost 20% of all our in-force policies. When we acquired the business just over five years ago, it was virtually zero."

nib said it had also enhanced its product range for financial advisers, giving members the option to access combined health and travel insurance cover.

"Like many other countries, we think there’s significant opportunity to enhance consumer empowerment and transparency in relation to medical cost variation as well as improve health outcomes for our members."

nib managing director Mark Fitzgibbon said the New Zealand busines had been boosted by membership growth and stable margins. Efforts to grow the market were gaining traction, he said.

"The FY18 result was always going to be impacted by the loss of a large corporate account in June last year and a weaker kiwi dollar.

"Significantly, in New Zealand we launched our first-ever Maori population health initiative with Ngāti Whātua Ōrākei. It’s a noble pursuit and we’re hoping to demonstrate a business like ours can help discrete populations better manage their health and wellbeing.

"nib’s FY18 results reflect a fundamental truth that people across Australia and New Zealand need more rather than less private health insurance."

Total group revenue grew 11.5% to A$2.2b, with net profit after tax of A$133.5m.

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