Mixed year for health insurer nib NZ

New Zealand rugby league star Benji Marshall — also briefly an Auckland Blues rugby player — was the brand ambassador for health insurer nib as it entered the NZ health insurance market. Photo / Brett Phibbs

New Zealand's second largest medical health insurer has reported a mixed half-year result, with policyholder numbers up 3.5 per cent but operating profits down 76 per cent.

Three years ago, nib New Zealand bought Tower Medical Insurance with the aim of expanding here although it only about an eighth the size of New Zealand's biggest health insurer, Southern Cross Healthcare, which has more than 800,000-plus members.

At the end of 2012, Australian business nib bought Tower and in October 2013, the new nib brand was launched here.

nib's ranks here are now expanding: in the half-year to December 31, 2013, nib said it had 79,000 policyholders but in the half-year to December 31, 2014, that rose to 81,735 policy holders, latest accounts showed.

Yet operating profit fell from A$3.2 million to A$800,000 and as a percentage of wider group operating profits, New Zealand's contribution fell 6 per cent from 7.8 per cent to 1.8 per cent.

In a section headed 'nib New Zealand key metrics', the business said its New Zealand premium revenue rose 8.1 per cent, from A$67.5 million to A$72.9 million.

That was due to net policyholder growth of 3.3 per cent and premium increases, nib said.

However more claims were made, rising from A$45.2 million to A$48.3 million.

"Claims expense up 6.9 per cent reflects return to more normal claims experience after a favourable claims experience in 1H14," nib said.

Total management expenses rose from A$21.8 million to A$23.3 million which nib blamed on rising costs including the transition of the business from Tower to nib, the expansion of the insurer's product range and increasing numbers of policy holders.

Total group operations - which include Australia and New Zealand - have also been declared.

Group operating profit of A$42.1 million was declared, up on the previous A$41.4 million. Group net premium revenue was A$802.3 million, up on the previous A$735.4 million.

Australian residents' business operating profit was A$37.5 million (A$34 million). Net profit after tax was A$41.1 million (A$39.6 million), earnings per share were A9.4 cents (A9.0 cents) and interim dividend will be paid of A5.5 cps fully franked (A5.25 cps).

See nib's latest investor presentation here: