NIB Holdings has delivered a solid profit result as the company’s digital mission gathers pace

The group is growing its non-insurance divisions in a concerted fashion, while rewarding shareholders on the back of strong profits.

NIB boss Mark Fitzgibbon. Picture: Supplied

NIB Holdings continues to grow faster than the broader market, managing director Mark Fitzgibbon says, posting an underlying profit up more than 20 per cent, with the effect flowing through to dividends.

The insurer is also building out its non-insurance businesses, such as its NDIS division Thrive and telehealth and digital case management products, with Mr Fitzgibbon saying there were now benefits to being a member even if you did not have insurance with NIB.

The Newcastle-based company on Monday reported a first half underlying profit of $118.7m, up 21.7 per cent, on revenue of $1.7bn, up 12.4 per cent.

NIB will pay a 15.4 per cent higher dividend of 15c per share, up from 13c, on April 10.

Mr Fitzgibbon said the company had delivered a pleasing result, although there were several pandemic factors still playing out.

“The membership and revenue growth across all of our private health insurance businesses are testimony to the competitiveness of NIB’s products and pricing, especially at a time of growing cost-of-living pressures,’’ Mr Fitzgibbon said.

“A few Covid-19 related factors continued to have some influence on profitability, but the underlying business is in great shape.’’

NIB said it was confident of meeting its 3-4 per cent target for policyholder growth from its Australian residents health insurance (ARHI) business for FY24 and beyond and “and net margin will gradually gravitate towards our target range of 6 per cent to 7 per cent’’.

NIB said its NDIS business Thrive now had 39,000 customers after six plan management businesses had been acquired, and the division contributed $6.4m to first half earnings.

The company is forecasting Thrive’s customer numbers to grow to 50,000 by the end of FY25.

Mr Fitzgibbon said the company’s digital evolution was continuing apace, with the NIB app now catering for artificial intelligence-aided symptom checking for users, the ability to complete a health check and skin check, and book a GP telehealth visit and receive medical certificates.

“I really believe that years from now, people will be surprised that once upon a time NIB was just a health insurer,’’ Mr Fitzgibbon said.

As well as the Thrive NDIS division, NIB also has the Midnight Health technology start-up division incorporating three digital health platforms for men, women and general health.

It also has the Honeysuckle Health platform which aims to identify and manage patients at high risk of avoidable return to hospital.

Mr Fitzgibbon said getting the message out to its members and more generally that the platforms exist was now the task.

“In our latest ad campaign, the other tagline is ‘as exciting as health insurance can get’,’’ he said.

“That’s designed to spark interest - what are they actually doing that others aren’t?

“Getting that message out that membership is about more than health insurance is important. That is a key to our success.’’

Mr Fitzgibbon said there would be “a couple of hundred thousand people’’ who will buy Midnight Health products this year and another half a million would buy travel insurance.

“So connecting them to the NIB ecosystem is important as well,’’ he said.

Profit in the core ARHI business was up 27.8 per cent to $128.6m, with insurance revenue growing 10.3 per cent to $1.3bn.

“This growth was driven by a 3.7 per cent increase in policyholders for the 12 months to 31 December, 2023, and the impact of a giveback in the first half of 2023,’’ the company said.

International inbound policyholders generated an underlying profit of $11.6m, up 58.9 per cent, while NIB New Zealand generated $11.3m in profit, down from $16.9m, with the previous period bolstered by a $4.7m one-off item.

UBS said NIB’s underlying profit was 13 per cent ahead of consensus estimates.

NIB shares were 3.7 per cent lower at $7.87 at noon on Monday.

Originally published as NIB Holdings has delivered a solid profit result as the company’s digital mission gathers pace