NIB's Travel, International Units Expected to Bounce Back — Interview – MarketWatch
By Alice Uribe
SYDNEY–NIB Holdings Ltd.’s pressured international students and travel insurance divisions are likely to bounce back as Covid-19 restrictions ease, while policyholder growth in the company’s health insurance divisions will likely grow as people remain health-conscious amid the pandemic.
Chief Executive Mark Fitzgibbon said NIB’s international and travel insurance units suffered during the pandemic amid travel restrictions, and while not providing specific guidance for the rest of fiscal 2022, the Australian private health insurer on Monday said it expects both units to return to profit by the next fiscal year.
“Both businesses were profitable pre-Covid and obviously we’re hoping by FY 2023 it will be more like pre-Covid than it has been in the last two years,” he told The Wall Street Journal after unveiling NIB’s first-half results.
“Travel is returning to where it was. It’s about one-third of where it was already in terms of weekly sales.”
Australia on Monday opened its borders to fully vaccinated international travelers after nearly two years of restrictions. Since November, some cohorts including international students and skilled migrants have been allowed into the country.
NIB on Monday reported its net profit rose 25% to 81.2 million Australian dollars (US$58.3 million) for the six months through December, while underlying operating profit increased 29% to A$109.6 million.
Still, some units were a drag on the results. The company’s travel insurance business suffered a first-half underlying operating loss of A$7.9 million and its International Inbound Health Insurance business posted an underlying operating loss of A$7.4 million.
“There’s little doubt the pandemic has reinforced the importance of good health and the value of private health insurance. This translated into strong policyholder growth across our Australian and New Zealand health insurance businesses,” Mr. Fitzgibbon said in a regulatory filing.
“Conditions haven’t been as positive in our international students and travel insurance businesses, but as Covid-19 passes these will bounce back.”
Domestic travel policies could be an area of growth for NIB. Mr. Fitzgibbon said there has been an uptick in people traveling domestically buying travel insurance.
For its Australian residents’ health insurance unit, first-half membership rose 2.8% to more than 653,000 policyholders, NIB said.
“We see a real opportunity to outpace the market in the six months ahead with some exciting initiatives under way including our brand re-fresh, new product concepts, additional distribution partnerships and increased investment in marketing,” Mr. Fitzgibbon said.
NIB targets at least 3% policyholder growth for the current fiscal year, he said.
Write to Alice Uribe at alice.uribe@wsj.com
