Nib New Zealand Earnings Holding Up As Healthcare Treatment Bounces Back

nib New Zealand today announced its results for the six months to 31 December 2020 (1H21) with premium revenue up 7.9% to NZD$136.1 million and underwriting result[1] of NZD$12.3 million broadly in line with same period last year (1H20: NZD$12.6 million).

nib New Zealand Chief Executive Officer, Rob Hennin said overall the result was pleasing with earnings stable as healthcare treatment bounced back following COVID-19 restrictions.

“Despite uncertain market conditions, over the past 12 months we grew New Zealand residents health insurance coverage by 2.8%, adding 3,135 new policies,” Mr Hennin said.

“Our first half result also shows claims increased 7.6% as members head back to their medical professional or seek treatment following first wave of COVID-19 restrictions.

“We know from our claims experience that many of our members either had healthcare treatment delayed or chose to stay away from hospitals during the peak of the pandemic,” he said.

“Its great members are now feeling more confident and getting the necessary healthcare treatment. Recognising some healthcare treatment in FY20 was simply deferred not cancelled during COVID-19, nib set aside a provision meet this expected claims catch-up over the course of FY21. As at 31 December 2020, NZD$6.5 million of the NZD$9.0 million provision has been released,” he added.

nib’s claims costs dipped significantly in May but surged back by September. Furthermore, pre-approval checks for elective surgeries haven’t dropped, indicating demand for healthcare remains strong.

The procedures that have experienced the largest increase following the initial lockdown (relative to pre-pandemic claims activity) were:

• Neurological: 116% increase
• Cardio-thoracic surgery: 49% increase
• Diagnostics: 38% increase
• Gynaecological: 36% increase

Mr Hennin said nib’s focus has been on supporting members and community during COVID-19.

“To date our nib Group member support package totals more than $45 million, and includes financial hardship premium relief, suspension options, automatic six-month pre-approval extensions and expanded coverage for COVID-19 related treatment at no cost,” he said.

“In addition, together with nib foundation $1 million was donated to support mental health services such as Lifeline Aotearoa and Clearhead, to enable them to accommodate the increased demand they faced.”

Mr Hennin said the health insurer also continues to lead the way in terms of enhancing nib Group’s population health capability with its partnership with Auckland iwi, Ngāti Whātua Ōrākei now providing health insurance to almost 4,200 lives.

“Simply put our partnership is about improving health and wellbeing of Ngāti Whātua Ōrākei members. We’re also currently exploring opportunities to expand this initiative to other iwi,” he said.

nib New Zealand Chairman, Tony Ryall said while the pandemic had increased consumer awareness about the importance of health there was still opportunity to grow acceptance of private health insurance in New Zealand.

“We see a real opportunity to demonstrate the role and capability of private health insurance in helping improve health outcomes and mitigate potentially avoidable or unwarranted healthcare treatment,” Mr Ryall said.

“Our partnerships with organisations such as Ngāti Whātua Ōrākei as well as our joint venture with US healthcare company, Cigna, to create Honeysuckle Health are examples of how we can play a more active role in our members’ better health by using personalised data science and insights to help them live healthier lives,” he added.

nib Group 1H21 Result

nib Group (ASX: NHF) today announced its first half financial year 2021 results to the Australian Securities Exchange (ASX) reporting total Underlying Operating Profit (UOP) of $86.9 million (up 4.4%) and Net Profit After Tax (NPAT) of $66.2 million (up 15.9%) for the six months to 31 December 2020 (1H21).

The Board has declared a fully franked interim dividend of 10.0 cents per share (1H20: 10 cents per share).

[1] nib New Zealand Underlying Operating Profit for the 12 months to 31 December 2020 was NZD$11.7 million (AU$11.0 million).

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