nib purchases World Nomads
Australian health insurer nib recently bought the World Nomads Group (WNG) travel insurance business for AU$95 million. World Nomads is the third-largest travel insurer in Australia; it also operates in New Zealand, the UK, the US and Canada. It is expected that, as a result of the purchase, competition between nib and New Zealand-based Southern Cross, which also has a powerful presence in the travel insurance market in the region, will intensify. nib’s New Zealand-based arm already offers travel insurance underwritten by Lloyds.
Mark Fitzgibbon, managing director of nib, characterised the purchase as a ‘good strategic fit’ for the company, as non-health insurance business now makes up almost a quarter of nib’s total operating profit. “WNG is an excellent business with significant expertise, experience and capabilities in the fast-growing and fast-moving travel insurance market,” he said. “It has a portfolio of high-quality brands including World Nomads, Travel Insurance Direct and SureSave, as well as an extensive range of domestic and international partners such as Lonely Planet. Its focus on direct-to-consumer distribution gives it the flexibility to adapt to evolving market conditions. We’ve been very impressed with the calibre of people within WNG and, importantly, their culture is very much aligned with our own. The investment they’ve made in technology and digital strategy is outstanding and gives us a lot of confidence in our ability to develop the market and win share.”
Commenting on the purchase, analyst David Ellis said: “It’s a sensible acquisition. It’s not too big, and nib has a pretty good track record at integration. It won’t be nib’s last acquisition … nib is quite an innovative and nimble-footed entity and it’s constantly trying to maximise earnings growth. It’s been diversifying away from its traditional core private health insurance over several years.”
nib will fund its new acquisition, it is planned, through surplus capital and debt.