nib’s Managing Director and CEO, Mark Fitzgibbon, said the half year result was pleasing given all the challenges presented by the pandemic. “Covid-19 has had many malign consequences across the nib Group. It’s caused needed clinical treatment for our members to be delayed, uncertain market conditions and totally disrupted parts of our business such as international workers, students and travel insurance,” Fitzgibbon said. “It’s especially necessitated us supporting members throughout the pandemic with premium relief and membership suspension options and expanded cover for Covid-19-related treatment. And we’ve leaned into various public health initiatives such as the procurement early in the pandemic of scarce surgical face masks for frontline healthcare workers and financial support for Lifeline. The cost of these combined initiatives totals more than $45 million so far.”
He added that nib’s membership growth in its core Australian residents’ health insurance (arhi) business is expected to be ahead of the industry growth rate and impressive given economic conditions. “We added more than 16,000 arhi members representing a 2.7-per-cent increase for the half year and grew premium income by 2.2 per cent to $1.1 billion. Premium revenue growth would have been 4.2 per cent if not for the six-month postponement of the 2020 annual premium increase.”
Increase in residents’ health insurance
Fitzgibbon noted the net profit margin of arhi was above the target range but had to be treated with some caution. ahi’s UOP of $89 million was up 42.2 per cent. “arhi profitability has been slightly distorted by Covid-19 and consequential delays in treatment and claims which is still playing out. We’ve modelled that impact as best we can and continue to make allowance for a claims catchup in our financial accounts.”
The strong performance of arhi was mirrored by nib New Zealand, which saw resident membership growth of 2.6 per cent and premium growth of 6.6 per cent to $126.9 million. UOP of $11 million was broadly in line with last year.