Health insurer nib signals it's keen to grab bigger slice of NZ market

Rob Hennin, nib New Zealand chief executive, aims to target younger people. Photo / Brett Phibbs

New Zealand's second-largest health insurer, nib, might take over another insurance business to get a bigger share of the market here.

In an outlook for its Kiwi operations released with its half-year result, nib said it was eyeing the competition. "There appear to be M&A [merger and acquisition] prospects as well as opportunities," it said.

Robert Hennin, a New Zealander formerly of American Express and Unilever who was appointed two years ago to run nib here, said New Zealand had many smaller health insurance providers. He backed up the statement to the NZX and said those smaller providers include Sovereign, ANZ-OnePath, Unimed, Partners Life, Accuro and schemes run for the police and teachers.

Hennin said the younger age group was another target for growth because 70 per cent of New Zealanders aged under 40 did not have private health insurance.

"Only about 25 per cent of Kiwis with private health insurance are aged between 20-39, meaning around 70 per cent of the population aged under 40 do not have private health insurance. In terms of nib, 23 per cent of our policyholder base are also in this age bracket," Hennin said.

Southern Cross is New Zealand's largest health insurer with more than 800,000 members, followed by nib with 81,735. Nib's New Zealand operations showed a mixed half-year result, with policyholder numbers up 3.5 per cent but operating profits down 76 per cent.

Nib said the number of policyholders had risen to 81,735 in the six months ended December 31, from 79,000 at the same time the previous year. Operating profit fell from A$3.2 million to A$800,000 and as a percentage of wider group operating profits, New Zealand's contribution fell from 7.8 per cent to 1.8 per cent.

Its New Zealand premium revenue rose 8.1 per cent, from A$67.5 million to A$72.9 million. That was due to net policyholder growth of 3.3 per cent and premium increases.

However, more claims were made, rising from A$45.2 million to A$48.3 million.

Group operating profit of A$42.1 million was up on the previous A$41.4 million, with net premium revenue of A$802.3 million, up on the previous A$735.4 million.

nib
•Originally stood for Newcastle Industrial Benefits.
•Established in 1952 by BHP Steelworks staff in Newcastle.
•Australia's fourth largest health insurer.
•2012: bought Tower Medical Insurance in NZ.
•2013: changed Tower's name to nib New Zealand.