nib doubles profit after OnePath acquisition

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[UPDATED] nib's New Zealand chief executive says its strong investment in marketing and promotion of all distribution channels should help advisers.

Monday, August 22nd 2016, 11:32AM 10 Comments

The group said strong customer growth had helped its New Zealand operation double its underlying operating profit to $19.6 million this financial year. nib New Zealand premium revenue was up 15.4% to $189.1 million.

Customer numbers were boosted by the acquisition of OnePath’s New Zealand health insurance book.

Full year group underlying operating profit increased almost 50 per cent to AU$132 million.

nib New Zealand chief executive Rob Hennin said the most pleasing aspect of the result was that the business was generating strong levels of sales.

“Our strong customer growth highlights the value Kiwis place on health insurance when they take out our flexible and affordable products. We’re finding consumers want peace of mind that if something does go wrong or they need treatment they are covered. They can also choose when, where and who provides their treatment. Our products are meeting these needs and providing assurance which is reflected in our performance,” he said.

“This year’s result signals a remarkable turnaround since we acquired the business in 2012. We’ve transformed a business that had been experiencing customer decline for almost a decade. Our rebranding of the business and launch of New Zealand’s first direct-to-consumer insurance range has been the catalyst for change.”

He said the number of policy-holders had grown about 26% over the year. The OnePath portfolio had been made up of about 19,000 customers. He said it was an achievement for the company to have grown in a relatively static market.

 "This market is one that's lacked innovation and excitement for a long time. What we've done is we've challenged the market and brought more choice, innovation and value for money, in all the channel."

Hennin said the firm was trying to focus on a wellness message, as well as the traditional health insurance angles.  "At the end of the day we are trying to engage customers and advisers about the need to take care of themselves and their families."

Advisers were a key part of the business and nib wanted to ensure it was creating value for them, he said. "They are a key building block for us. A key differentiator for nib is that we continue to invest heavily in growing the brand ... I don't think there's another insurer in the market that invests int he same way as nib and that's got to be good for advisers.  It's helping advisers because it encourages customers to think about health insurance as part of their health needs."

He said the focus for the future would be on pursuing more growth opportunities.

“We have a number of projects and initiatives in the pipeline that will surprise and delight our customers to further differentiate us from our competitors,” he said.

“There is no better example of this than nib’s healthHQ, a unique health and wellness package for the corporate market. We think healthHQ is a real game changer, not just for employers to better manage the health and wellness of their people, but also to help Kiwis take a much more active role in looking after and monitoring their health and wellbeing.”

Many advisers already had strong corporate relationships, and initiatives such as this would help them, he said.

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