NIB Holdings Stays Proactive In Anticipation Of Resumed Travel
- Announced distribution partnership with ING Bank Australia Limited (ASX:ING)
- FY21 total revenue of $2.6 billion despite negative growth to travel insurance segments
- Share price up 53.97 per cent over the year
Leading Australian insurance provider NIB Holdings (ASX:NHF) produced impressive results in FY21, exceeding its own performance expectations despite its travel insurance business segment bearing the brunt of decreased international travel due to the pandemic. Beyond surpassing its group Underlying Operating Profit (UOP) for the year, the group continues to exemplify a proactive approach to handling tough market conditions without simply waiting for better conditions to present.
Today, the group announced a new distribution partnership with ING Bank Australia Limited (ASX:ING), which will allow Australians to obtain ING health insurance underwritten by NIB. The move marks a further step to NIB’s long standing track record of delivering above-industry policyholder growth, with the whitelabel partnership with ING attesting to its market leading status as a premium Australian insurance provider. Chief Executive Australian residents health insurance Ed Close notes the move as a great example of how businesses can collaborate to the benefit of connecting existing customers to improved finance and healthcare access.
Additionally, and as a present response to the limited state of domestic travel, NIB announced a pause in travel insurance sales in Australia and New Zealand just last month. Any current underwriting arrangements for these locations will come to an end from 5 October 2021. However, the company provided assurance that its international sales will be unaffected by this pause. At the moment, international sales accounts for the group’s largest business segment, at over 75 per cent of total NIB Travel Insurance Sales. Managing Director Mark Fitzgibbon admits to the disruptiveness of the pause, yet affirms a long-term view that holds confidently to the group being able to emerge from pandemic economic conditions in better shape as travel and market conditions rebound.
Improving Product Value Ahead of Resumed International Travel
These proactive updates to its business reflect NIB’s consistent focus on reducing its operating expenses while furthering its market engagement. NIB’s latest announcements echo the group’s ability to weather the pandemic economy, through swift management decisions that saw the reduction of its operating expenses by over 53 per cent in FY21. The company had earlier in April provided FY21 UOP guidance to fall within the range of $200 to $255 million, which it promptly delivered upon by producing $204.9 million in UOP for the year.
NIB maintains a confident outlook for FY22, especially with increased international travel seemingly just on the horizon within Australia and the immediate region. The group’s management is guided by the pronounced demand for foreign labour within Australia, and it seeks to ready itself to meet this demand upon the inevitable resumption of international travel. Additionally, its continuing investments in data science and technology will see it ready to meet the reopened international travel with improved product value that its new and existing customers can continue to enjoy.
NIB’s share price climbed steadily from 26 April this year, when its unaudited performance and outlook for FY21 were presented to shareholders. From March lows of $5.14 per share, the company’s value has seen a steep climb to a $7.98 peak on 20 August, just before it published its FY21 Annual report. At the time, NIB’s share price has held steadily around the $6.75 mark and is tracking 53.97 per cent higher than the previous corresponding year.