Private health insurer nib has announced a strong performance for the six months to the end of December 2021.
The company reported an 8.3 per cent rise in group underlying revenue to $1.4 billion. Group underlying profit rose 28.5 per cent to $109.6 million. Net profit after tax of $81.2 million was up 24.7 per cent.
Managing director and CEO Mark Fitzgibbon said the performance was driven by strong premium revenue growth of 8.2 per cent due to an uplift in policyholders as well as COVID-19 related disruption to elective surgery and allied healthcare, such as dentistry.
“There’s little doubt the pandemic has reinforced the importance of good health and the value of private health insurance," said Mr Fitzgibbon.
"This translated into strong policyholder growth across our Australian and New Zealand health insurance businesses. Conditions haven’t been as positive in our international students and travel insurance businesses but as COVID-19 passes these will bounce back,”
Mr Fitzgibbon said the pandemic also had a very significant impact upon the company's claims experience.
“Ongoing COVID-19 lockdowns and restrictions on non-urgent elective surgery, as well as visits to the dentist and other healthcare providers, continued to impact our claims expense. We also continue to expect and account for an inevitable 'catch-up' in deferred treatment now estimated at $59.2 million,” he said.
Mr Fitzgibbon said supporting the company's members, travellers and employees throughout the pandemic remains a key focus.
“We recognise the pandemic is taking its toll on people and value our total support package at over $90 million.
"We’ve rebated premiums and deferred annual increases, extended cover for COVID-19 related treatment at no additional cost and made numerous contributions to public health initiatives.
"We also introduced COVID cover for travellers and importantly, we’ve modernised the way we work in recognition of pandemic circumstances meaning our people can pretty much work wherever they choose,” he said.
Mr Fitzgibbon said the company's core Australian private health insurance business performed strongly in the six months to the end of December.
“Compared to the first half of last financial year, membership grew 2.8% to over 653,000 policyholders and we saw improvement in retention and our member satisfaction.
"Importantly, our arhi [Australia Resident Health Insurance] performance is offsetting pandemic induced weakness in some other businesses,” said Mr Fitzgibbon.
“We see a real opportunity to outpace the market in the six months ahead with some exciting initiatives underway including our brand re-fresh, new product concepts, additional distribution partnerships and increased investment in marketing.
"We’re targeting at least 3% policyholder growth for FY22,” he added.
The company said its New Zealand business also performed well with premium revenue growing 13.8 per cent due to a 4.1 per cent rise in policyholders and premium increases.
“As public waiting lists continue to grow, exacerbated by the pandemic, we’re seeing more consumers make the shift from public to private treatment. And constraints upon private hospitals haven’t been as significant as in Australia,” said Mr Fitzgibbon.
“The outlook for our Kiwi business is positive with favourable market conditions and the acquisition of Kiwi Insurance Limited which should be completed in 2H22. We expect 3-5% growth in policyholders for FY22.”
Mr Fitzgibbon said the performance of the company's international inbound health insurance was mixed.
“While it’s been another disappointing result overall, our workers business has seen stellar sales growth, especially through the Pacific and Australia Labour Mobility (PALM) scheme. With increasing demand for skilled migration to meet labour shortages we expect this will only accelerate,” he said.
“It hasn’t been as rosy for our students business with restrictions on international students; however, we expect conditions to dramatically improve once border restrictions are relaxed,” he added.
Mr Fitzgibbon said nib Travel’s loss was as expected with the business still heavily impacted by border closures and travel restrictions.
Mr Fitzgibbon said the company's 'Payer to Partner' (P2P) strategy of personalising the member and traveller experience was starting to come to life.
“We expect people will increasingly want the healthcare system to understand their personal health goals and risks as well as meet most of their needs in one convenient place. We’re actively investing in this future as our investments in Honeysuckle Health, Midnight Health and Kiwi Insurance Limited attest. Similarly, our launch of new digital health management programs such as Limber and SilverCloud Health5 align with this approach,” he said.
“Providing the financial protection for members and travellers with insurance will remain at our core for years to come. However, there’s so much opportunity to assist them to make more informed decisions about their health and navigate what today is a fairly disjointed healthcare system."