NIB Holdings Limited (ASX: NHF) today reported its 2020 half-year financials showing an increase in revenue but a decline in profit.
Who is NIB?
The nib Group is one of the ASX’s largest private health insurers, it was founded in 1952. nib provides health and medical insurance to over 1.5 million Australian and New Zealand residents, as well as health insurance to international students and workers in Australia.
Today, nib Group released its 2020 half-year financial report showing a 6.4% increase in underlying revenue and a net profit after tax of $57 million, down 23%.
The company declared a half-year dividend of 10 cents per share, fully franked, in-line with last year.
Explaining the difference between revenue growth and the fall in profit, nib says it paid more in the way of claims back to policyholders.
The company’s media release stated: “…higher claims inflation across nib’s insurance businesses as well as timing in the receipt and payment of claims impacted nib’s “unpaid claims” reserves and resulted in a reported Group Underlying Operating Profit (UOP) of $83.2 million, a 27.2% decline compared to 1H19.”
Looking towards the second half of its 2020 financial year, nib Group CEO Mark Fitzgibbon said the company is thinking the year is a “reset of sorts”.
nib still expects to achieve a statutory operating profit of at least $150 million and UOP of $170 million.
“We’ve embarked upon a major transformational effort to make our future value proposition much more about people’s better health rather than just responding to sickness or accident,” Fitzgibbon said.
nib has teamed up with USA-based Cigna Corporation to improve and predict the true costs of having a healthier lifestyle and is thinking of creative ways to use technology to improve outcomes.
As at the time of reporting, nib shares were last seen trading around $5.33 giving the company a market capitalisation of $2.43 billion.