nib has acquired Australia's only specialist corporate health insurance provider, Grand United Corporate Health Limited (GU Health), from Australian Unity for $155.5 million.
GU Health is the country's only established specialist corporate group health insurer, servicing over 34,000 policy holders across more than 260 corporate clients. The business has operated as a wholly-owned subsidiary of Australian Unity Limited since 2005.
GU Health generated premium revenue of $193.5 million in the 12 months to 30 June this year.
nib said the acquisition accelerates its strategic ambition to further grow in the corporate segment - doubling its existing number of corporate health policyholders.
According to the company, the Australian corporate private health insurance market could be between 300,000 and 500,000 policy holders, making it an attractive market.
It said client turnover in the corporate market tends to be low, membership is younger compared to the retail market, and there is generally a higher level of ancillary benefits coverage.
GU Health's premium revenue has grown at an average annual growth rate of almost 9 per cent over the past five years.
“Overall the acquisition supports our plans to increase our presence in the corporate group market. It adds materially to both our Australian residents and international health insurance businesses and hopefully, will help grow our nascent outbound business. We have a strong view at nib about how globalisation increasingly demands that health insurers are able to seamlessly offer customers global cover," said nib managing director, Mark Fitzgibbon.
“We’ve been impressed with the calibre of their people, strong business-to-business relationships and purpose built technology. All have helped deliver a market leading capability in the corporate group market. What's been achieved by the business is also a real credit to the ingenuity of its parent company Australian Unity.
According to Australian Unity’s group managing director, Rohan Mead, the proposed sale represents the company's desire to constantly review and optimise its portfolio mix.
“Australian Unity’s strategic focus for its human services activities involves delivering greater levels of direct healthcare as well as aged care, home care and disability services. The proposed sale of GU Health to nib will release capital for investment in strategic initiatives that align with our goal of continuing to develop direct to consumer products and services that create community value,” he said.
“We have worked collaboratively with nib to develop an agreed transition plan to deliver business as usual service to our customers, providers and employees over the coming months.”