Nib New Zealand first-half underlying profit up 40%
Nib Holdings, the ASX-listed company that's New Zealand's second-largest health insurer, reported a strong first-half underlying operating profit and updated its guidance for the full year.
Nib New Zealand is part of one of Australia's largest health insurers, which today reported a 43% lift in underlying operating profit in the six months to December 31 to $A95.2 million as total group revenue lifted 7.3% to $A995 million. Its net profit was $A71.1 million, up 65%.
New Zealand "continues to perform in line with expectations" with revenue up 25% to $A100 million and underlying operating profit up 40% to $A10.9 million, it said. It noted that the first half result includes a full period benefit from OnePath NZ. It bought the medical insurance book of OnePath NZ from ANZ Bank New Zealand for about $A22.5 million in late 2015.
"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," Nib NZ chief executive Rob Hennin said in a statement.
The company said its 'white-labelling' portfolio continues to grow with the NZ Automobile Association, which has more than one million members, agreeing to partner with Nib. "Although it's early days, the pipeline of sales through this channel is expected to continue to improve," it said. According to Hennin, a distribution partnership with The Warehouse Group also helped bolster the result.
"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 said.
Mr Hennin was optimistic about the future, pointing to 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 covered, we think there is a lot of potential and opportunity to build the industry and our share," Mr Hennin said. He noted the ageing and growing population adds to the role that private health insurance can play.
Looking ahead, Nib said it expects its full-year group underlying operating profit to be in a range of $A140 million to $A150 million and its statutory operating profit to be in a range of $A137 million to $A147 million.
Nib's ASX-listed shares last traded at $A4.71.