nib Holdings Limited has reported total group revenue of A$1.8 billion for 1H25, reflecting a 7.7% increase from A$1.7 billion in 1H24.
However, underlying operating profit (UOP) declined 26.7% to A$105.8 million, down from A$144.3 million in the prior year. Net profit after tax fell to A$82.9 million from A$103.9 million.
Group managing director and CEO Ed Close said the drop in UOP was expected, given the unusually high margins in 1H24 and the financial pressures in New Zealand’s market. He emphasised that the company remains focused on managing claims inflation and ensuring its pricing strategies support sustainable growth.
“Our Australian Residents Health Insurance (arhi) margins were well above target in 1H24 at 9.7% and have now returned to more sustainable levels in our long-term target range of 6% to 7%,” he said.
nib consolidated its Australian residents and international health insurance operations under the Australian Private Health Insurance (aphi) division, which now covers 1.6 million policyholders.
The division posted an underlying operating profit of A$100.0 million, a 21.4% decrease from A$127.3 million in 1H24.
Policyholder numbers in the arhi segment grew by 3.3%, while revenue increased 7.4% to A$1.4 billion. Close noted that nib continues to focus on provider partnerships and digital health initiatives to enhance the member experience.
The international students and workers health insurance business expanded policyholder numbers by 10.6%, contributing to an 11.2% rise in underlying operating profit to A$12.9 million. Revenue for the segment increased by 14.6%, driven by student policy growth and premium adjustments.
Close said the company saw strong revenue growth due to increased student enrolments and pricing adjustments even though uncertainty in Australia’s immigration policies has affected the sector.
“Gross margins increased, expenses were steady, and we saw a good uptake of digital services,” he said.
nib New Zealand posted a first-half underlying operating loss of NZ$10.9 million for the 2025 financial year (1H25), following a profit of NZ$13.0 million in 1H24.
The health insurer attributed the decline to industry-wide claims inflation and slow economic growth. Despite this, revenue increased by 12.1% to NZ$218.0 million, up from NZ$194.4 million in the previous corresponding period.
nib New Zealand chief executive Rob Hennin said economic pressures continue to impact the sector, with rising costs affecting both insurers and policyholders. Claims inflation in nib’s New Zealand health business reached 17.6%, while service costs increased by 7.6%, and utilisation grew by 9.3%. Policyholder numbers remained stable despite these conditions.
“We are mindful of household budgets, but have increased premiums to reflect the impact of higher claims costs,” Hennin said. “We are ambitious about delivering value to members.”
During the half-year, nib NZ continued investing in digital systems to streamline claims processing and pre-approvals. It also expanded its Toi Ora health initiatives and preventive health management programmes aimed at supporting long-term member health.
Hennin stated that the company will concentrate on pricing strategies, cost efficiencies, and productivity improvements in the second half of FY25.
nib NZ chair Hanne Janes noted that inflation and interest rates have created financial challenges for households, but easing rates may lead to more favourable market conditions in New Zealand.
“We know value is crucial for members, now more than ever. In 2H25, we will continue our focus on costs, refocus on innovation and productivity gains, and bring good solutions to healthcare for members,” she said.
Additionally, nib NZ plans to launch “nib Ultimate Life and Living Insurance” in Feb. 2025, featuring life cover, trauma cover, and income protection options.
nib reaffirmed its FY25 group UOP guidance of A$235 million to A$250 million. The company expects second-half performance to benefit from strong growth in Australian private health insurance and international inbound health insurance, as well as a return to profitability in New Zealand.
The interim dividend of 13 cents per share is scheduled for payment on Apr. 9, 2025, with a dividend reinvestment plan available for shareholders.
