Revenue up, profit down for insurer

nib New Zealand saw revenue up but profits down in the 12 months to June 30.

Thursday, August 29th 2024, 11:45AM

The health insurer says insurance revenue rose 9.4% from $367.6 million to $402.1 million due to policyholder growth and premium increases.

Resident private health insurance policyholder growth was 3.1%. Insurance service costs rose 14% to $380 million.

Overall, its underlying operating profit fell from $33.4 million to $21.2 million under a new accounting standard, IFRS17. (2023 profit has been restated under the new standard).

This year’s result benefited from a one-off deferred acquisition cost adjustment of $5.2 million.

New international accounting standards and claims cost pressures impacted the nib NZ result. High inflation had a deleterious impact on the local economy and filtered through to the health sector.

The industry, including nib, responded with higher pricing.

“Kiwi householders have faced stressors including higher interest rates and sharply higher cost of living pressures over the last 12 months,” nib NZ chief executive Rob Hennin says.

“As in the community, we have seen some of those pressures in the private health insurance sector, with claims costs and utilisation rates much higher than a year ago,” he said.

“We are focused on costs and containing inflation in the health sector as much as we can because those costs are passed along to our members.”

“We have continued to deliver value for Kiwis. nib recorded strong policyholder growth, reflecting nib’s appeal to members, their families and communities in FY24. And we have undertaken measures to help bring about operating efficiencies in the year ahead, including automating claims processing.”

Hennin said greater digitisation will deliver savings, provide smoother pathways and quicker processing of claims for members.

He said nib NZ’s health management programmes, including those for members with diabetes, and nib’s cardiac care programme, grew in FY24. “And we’re delighted to have seen increased take-up of our non-pharmac benefit,” he said.

Hennin said non-financial highlights in FY24 include nib NZ’s continued work in its Toi Ora population health programmes in partnership with iwi. This year nib delivered the first phase of its Tohu Toi Ora programme that provides accreditation for health providers who are culturally responsive to Māori.

nib NZ chair Hanne Janes said FY25 will bring continued challenges. “New Zealanders have not been immune from the stresses people all around the world face: economic challenges and cost-of-living pressures, an ageing population, continued difficulties in accessing healthcare, and rapidly evolving technology,” she said.

“Our members expect high quality care and better outcomes, and they expect technology to bring them rewards in health care and wellbeing. We strive to deliver that value for our members and deliver better health care now and into the future.”

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