nib New Zealand profit up

nib holdings limited (ASX: NHF) today announced that its New Zealand operations had contributed NZ$8.4 million (AU$7.8 million) to Group underlying operating profit for the six months to 31 December 2015 (1H16).

nib New Zealand premium revenue was up 9.6% to NZ$87.6 million (AU$79.9 million), while claims expenses increased 17.8% to $NZ62.4 million (AU$56.9 million).

In its Group results statement issued to the ASX, nib said that it is on track to deliver a strong full year result, with underlying operating profit1 for 1H16 of AU$66.4 million; an increase of 46.1% on 1H15. Statutory operating profit increased 41.0% to AU$59.3 million.

nib New Zealand CEO, Mr Rob Hennin, said the first half result was pleasing with the New Zealand business performing to expectations.

“A highlight of the New Zealand result was the significant improvement in underlying operating profit, which was up almost 200% on the same period last year to $NZ8.4 million,” Mr Hennin said.

“We also added more than 21,000 net new customers to our business, primarily through our acquisition late last year of OnePath Life NZ book of policyholders and our own organic growth efforts,” Mr Hennin added.

“We expect policyholder growth to track positively for the remainder of the year due to our continued investment in advertising and marketing, as well as a renewed effort to re-enter the group health insurance market.”

According to Mr Hennin, approximately 50% of all health insurance in New Zealand is sold via employer groups, with nib historically under-represented in this market segment.

“Traditionally, our business has been very strong in the financial advisor space and more recently the direct-to-consumer market. While we will continue to concentrate on these channels, we now have a renewed focus on gaining a larger share of the group market,” Mr Hennin said.

nib has developed a suite of new products specifically designed for the group market, which are supported by an online employee wellness program calledMyHealth HQ.

“We have spent a considerable amount of time and effort understanding what employers and their employees want from their health insurance partner. Providing great value health insurance is just one piece of the value proposition, but just as importantly employers want a partner to help manage the health and wellness of their workforce,” Mr Hennin said.

nib is New Zealand’s second largest health fund providing health and medical insurance to more than 200,000 Kiwis, which equates to around 15.0% of the insured population.

nib (holdings limited) announced an interim 1H16 fully franked dividend of AU5.75 cents per share (1H15: AU5.5 cents per share). The interim dividend has an ex-dividend date and record date of 2 and 4 March 2016 respectively, with the interim dividend to be paid 1 April 2016.

nib (holdings limited) confirmed FY16 guidance with the result likely to be at the upper end of its underlying operating profit range of AU$102 million to AU$114 million (statutory operating profit of AU$90 million to AU$100 million).

ENDS

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