Co-payment decision wasn’t made lightly, nib CEO says
Skye Daniels says a structural shift in claims required a different approach.
Monday, October 13th 2025, 6:08AM 
13 Comments
by Ksenia Stepanova
nib NZ chief executive Skye Daniels has defended the controversial introduction of co-payments, and says the decision wasn’t made lightly.
Responding to an enquiry from Good Returns, Daniels says move was necessary to address unprecedented claims inflation that could no longer be managed through premium increases alone.
"We know that increasing premiums every year can't be the only approach to tackling the challenge of prolonged and unprecedented claims inflation," Daniels said.
She noted that claims inflation and utilisation had been steady in the single digits for many years, but began rising sharply around two years ago - a shift affecting all health insurers.
She also emphasised that co-payments would not apply to surgical and treatment benefits such as cancer treatment and private hospital admissions. Some diagnostic procedures, including colonoscopies, gastroscopies, and skin biopsies, would continue to be covered in full.
The co-payment will also not apply to customers on Ultimate Health Max, as they have guaranteed policy wording.
On the removed benefits, Daniels noted that they had relatively low usage. The Public Hospital Payment Benefit had a claiming rate of 0.5% in FY25, while the Loyalty Health Check Benefit was used by 3.7% of eligible members.
"We haven't made the decision on co-payments lightly," Daniels said.
“We understand that changes like these are not welcomed by members that are regularly claiming, but the reality is that both medical costs and claims volume continue to increase. These decisions have been made after thorough deliberation, and we remain committed to ensuring we can provide New Zealanders with cover now and well into the future.”
Industry veteran calls for patience
Jon-Paul Hale from Willowgrove Consulting, who met with Daniels to discuss the changes, urged the industry to give the new chief executive time to address nib's well-documented service challenges.
"I think Skye has an excellent handle on the situation she is walking into and isn't afraid to ask the questions with the hard answers," Hale said. "My impression is Skye is tackling things in a professional way with an excellent understanding of the business she is now leading."
Hale acknowledged nib's service issues over the past three years, which he attributed to the previous CEO not addressing problems effectively. Given Daniels' recent appointment and current challenges, he believes she deserves space to make improvements.
While noting that communication of the recent changes could have been handled better, Hale suggested this was part of a learning curve for both nib's recently appointed senior management team and the organisation as a whole.
"Given time, Skye's focus on service delivery will pay dividends we all need to see, but that needs some time and space for her to get things done," he said.
"Time will tell, first time is needed to let nib get the house in order.”
Support for advisers
Daniels said nib has created resources to help advisers communicate the changes, including a diagnostics schedule and change summary. nib is also holding webinars to explain the changes and answer questions.
"We have immense trust in our advisers to guide our members, their clients, through this," she said.
"Advisers can reassure clients that these changes are about protecting the parts of cover that they rely on most, while managing the impact of rapidly rising claims and healthcare costs."
She added that the company had been encouraged by feedback regarding its decision to explore alternatives to simply increasing premiums for all members.
| « Adviser to Adviser advice: Managing those damn emails | Mixed reviews from advisers on FMA regulation » |
Special Offers
Comments from our readers
These changes will not be "taken lightly", and the communication surrounding the changes, not be taken lightly.
This was not the only way to approach this, and having sat on senior management teams for two medical insurers over time, the team were very aware that medical inflation runs significantly higher than ordinary inflation. We factored for claims bubbles (actuarially) and medical inflation, which on average travelled at around 11-12%. We also consider advisers and their clients. Co-payments feel like opening the cabin door in the plane because 2 toilets are blocked. The impact will not be taken lightly!
Accepting this is the direction nib is choosing to travel in, they may wish to consider breaking off a little of the marketing budget to employ a PR/media consultant to assist, having advisers and clients drink the b/s. Although on some levels the horse has bolted, so it's probably another animal's waste.
I would not insure my cat with NIB such is my disappointment with their process and communications over the past few years. If as an organisation, they were credible, these changes would be easier to trust and absorb.
As an adviser, they are not recommendable as the dilute my credibility with my clients for how poor they are. How would I tell policy holders to accept this change as NIB are a trustworthy organisation and worth persevering with?
Also, if the co-pay is limited in scope, then what level of claims inflation is actually being abated here? Some details please.
The issue with this approach, which I fully support chocie and have argued this with Skye, is that it doesn't immediately pass on the premium relief to the significant portion of the existing base that isn't claiming. These clients face a double edge: they do not receive value from claims, yet they must bear ever-increasing premiums.
This is a significant part of the base that could be at risk of runoff and needs protecting if nib is to get this mess under control.
I don't like it any more than the rest of you, but I understand why nib has taken the approach they have. They definitely could have communicated and socialised the change better. Hindsight is also 20/20.
At the same time, I have clients with nib who have no other alternatives, so we must work with nib to reshape their current situation and demand improvement for the sake of these clients.
Will nib get new clients from me? No. Not until I see a significant change in service delivery and rebuilding of trust.
Our industry operates on trust, and I'm only speaking out to give them a chance, given the complete change in leadership and management.
However, knowing our industry, nib will only get one shot at this.
It will be interesting to see how shareholder return looks when only the unhealthy are retained be NIB with all others moving elsewhere.
Given how Southern Cross have treated advisers over the years, I am always curious about their style and attitude toward us. Likewise, senior folk from banking over the years. Southern Cross have a terrible reputation for adviser consideration. They begrudingly concede we exist.
There is no way of packaging this major change as it's ok or, oh well, let's just see! Putting aside this change, I would suggest NIB are under-resourced, likely not allowed to spend money to fix this as Ausy won't agree, and the current management I would probably be best to stay away from commenting on.
A tip for them could be to treat advisers with respect as adviser delivered business can help you out of a spot. Treat advisers with and as a trading partner and together we can trade through. If they do not at least apologise for how this has been landed on us and how this has been communicated, then they really are stupid and this change will not be taken lightly!
Obligations under COFI include ensuring products and services are likely to meet consumers’ requirements and objectives (FMCA 446C(2)(d)), with regular reviews to ensure those products and services are likely to continue to meet those requirements and objectives 446J(1)(b)(iv). With one important qualification: FIs can view consumers “as a group”. Aim for the greatest fairness for the greatest number, knowing that this will result in unfair outcomes for some.
The “What” of the changes (the co-pays, premium increases, and removal of benefits) probably passes this test. But I think there is another interesting COFI issue lurking in the shadows, which I’ll call the “Who” problem. Who do these changes apply to? There are 3 main changes, which don’t apply to all policy holders equally.
1. Removal of benefits applies to non-guaranteed wording policies only (although I still detect some nib confusion around the Major Medical product without the optional Deluxe benefit).
2. Premium increases are one % for UH/UHM, another % for all the rest of retail, and TBC % for PHB groups.
3. PHB group will get 2 options – priced with or without the 20% co-pay.
Who gets to keep their policy wordings? Easy; this grouping was decided when the contract wording was finalised. Who gets the larger premium increases, and Who gets the option of “buying out” the co-pay? Here, things get interesting. Has nib acted unfairly by increasing some premiums by more than others, or by restricting the “no co-pay” option to Group only? Maybe, maybe not.
What does COFI have to say on this matter? Nothing useful, on my reading. There is a clear requirement to treat consumers fairly when viewed as a group. However, there is no guidance/restriction on how to fairly divide customers into groups in the first place, and we should not assume that FIs will be making these groupings for the benefit of customers.
If I’m a nib customer getting a 33.6% increase, it’s little consolation that everyone else in my group is in the same boat. I want to know why I’m not in the other boat, getting a 22% increase. Come to think of it, why are there 2 boats, rather than 1, or 3? Why aren’t there 7 boats across 13 product lines, like there used to be (March 2018)?
Sign In to add your comment
|
|
Printable version |
|
Email to a friend |
Time will tell on the changes coming with nib, I wish them success. We need all of our insurers to be performing for us to have a healthy insurance market.