Jarden tapped for NIB travel insurance sale

Jarden has been tapped to sell NIB Travel. Picture: iStock

The Swiss insurance giant that owns travel insurance firm Covermore is being tipped as the most likely buyer of NIB’s travel insurance unit that is potentially being placed up for sale.

At the Macquarie Australia Conference in Sydney on Tuesday, NIB chief executive Ed Close told investors it had appointed Jarden to weigh strategic options for NIB Travel following an internal review.

It comes as the chief executive of the unit, Rob Hennin, who is also head of NIB NZ, steps down.

Sources suggest that Zurich, which owns Covermore, would be the most logical acquirer, while another could be a strategic player such as Generali Group.

Travel insurance businesses have been hard hit since the global pandemic, but before that time, the unit was understood to be generating about $20m of annual earnings before interest, tax, depreciation and amortisation.

This could imply a price tag of up to about $200m.

Health insurer NIB has sold travel insurance since the early 2010s, offering the selling and distribution of products, but not underwriting travel insurance.

It expanded further into the space in 2014 with acquisitions and has brands such as NIB Travel, World Nomads Group and Travel Insurance Direct.

Travel insurance, New Zealand and international students insurance accounted for about 35 per cent of the group’s revenue.

The company has been weighing up for some time whether to exit the division, but the global pandemic was not seen as a the right time in the market.

Zurich invested heavily in travel insurance in Australia with the acquisition of the listed Cover-More in 2017 for $741m.

QBE distanced itself from travel insurance, selling its operations to NIB in 2019 for up to $25m.

NIB reiterated previous earnings guidance and said losses with the New Zealand business would be offset by other parts of the group.