Australians delay surgeries amid Covid fear, NIB

Health insurer NIB says extended lockdowns are forcing Australians to stay clear of hospitals.

Health insurer NIB, led by chief executive Mark Fitzgibbon, says extended lockdowns are forcing Australians to stay clear of hospitals. Picture: Andrew Henshaw/NCA NewsWire

Sydney and Melbourne’s extended lockdowns are triggering people to delay surgeries out of fear they will catch Covid-19 in hospital, health insurer NIB says.

The Newcastle-headquartered group said catch up surgeries were less than expected in the 12 months to June 30 and “remained difficult to forecast” as Australians stayed clear of hospitals.

“While there was some catch-up of deferred treatment during the year it was less than initially anticipated,” chief executive Mark Fitzgibbon said.

“Its likely best explained by people’s ongoing fear of Covid-19 infection and continued lockdowns. While it remains difficult to forecast, we’ve retained a $34m provision for further claims catch-up in relation to Covid-19.”

It comes as hundreds of medical staff at Melbourne’s main public hospital, the Royal Melbourne, are on forced leave after a man infected with Covid from Shepparton had surgery at the hospital.

Meanwhile, two weeks ago a woman infected with Covid attended Sydney’s Northern Beaches Hospital’s emergency department, sparking an alert at the hospital in Frenchs Forest.

But the pandemic is not just taking. It has delivered a NIB a fillip, with its flagship Australian residents health insurance (arhi) business adding 26,000 policyholders in the year ended June 30 - a 4.2 per cent rise on the previous year.

“The pandemic has clearly heightened people’s awareness of the risk of disease and the need for financial protection as well as timely access to treatment. This is reflected in our policyholder growth which has also benefited from improvement in retention and resumption of previously suspended policies.”

Overall, NIB’s revenue rose 2.9 per cent to $2.6bn, outpacing claims, which increased 2.5 per cent to $2bn.

Net profit jumped nearly 85 per cent to $160.5m, prompting NIB to return $15m in “additional claim savings” to members via an ex-gratia payment.

But Mr Fitzgibbon cautioned that the business was returning to pre-pandemic levels.

“Neither FY21 or FY20 can be considered “normal” given fluctuation in healthcare utilisation and claims experience,” he said.

“A high level of provisioning in our accounts for deferred claims especially caused a substantial decline in FY20 UOP (underlying operating profit) while our FY21 claims experience has turned out better than expected.”

Mr Fitzgibbon said NIB’s international inbound health insurance (iihi) and travel businesses continued to suffer from travel bans. Iihi membership fell 6.5 per cent, while NIB Travel sales revenue dived 74 per cent.

“While it wasn’t positive for our iihi and travel businesses we’re confident they will bounce back post-pandemic. Pre-pandemic in FY19, together these two businesses contributed $41.5 million to group earnings compared with a loss of $19.5m in FY21,” he said.

“It speaks of the opportunity ahead and we’re using the current hiatus to modernise our systems and improve operating efficiency.”

NIB will pay shareholders a final dividend of 14c a share fully franked on October 5. This takes the full year investor payout to 24c.

The stock was down nearly 11 per cent to $7.14 on the ASX around midday Monday.