With more than one million members across Australia and New Zealand, nib is one of Australia's largest health insurance providers. The fund is also set to become substantially larger, with the acquisition of World Nomads Group (WNG) announced last month.
The $95-million deal expands nib's travel insurance capabilities, after taking 100 per cent ownership of WNG – Australia's third largest travel insurance provider.
"We see that as a sign of us growing non-core businesses, not paring back the domestic health insurance business."
With consumers looking for a good deal when buying both health and travel insurance, the acquisition is expected to add to what is already a competitive market. It is also part of nib's widely reported desire to spread its wings overseas.
Upping the ante
In a report by The Australian, Chief Executive of nib Holdings Mark Fitzgibbon said the takeover "ups the ante".
"Having established WNG fits neatly as part of our value proposition and people are prepared to buy travel insurance from us, this acquisition ups the ante," he explained.
"We have already established we are able to sell travel insurance to our customer base – we sold 6,000 travel insurance policies in the last financial year and that has been consistent over the years."
Primarily a health fund, nib has consistently been trying to alter its standpoint to take in products other than Australian residents health insurance (ARHI). According to The Australian, 25 per cent of revenue made by the company last year was from earnings outside of this core offering.
Health insurance to remain unaffected
With a bold movement into the travel insurance market, there is a sign of intent that nib's strategy to refocus could continue. However, the company was keen to assure policyholders that their core business would not be affected in the process, as Mr Fitzgibbon continued.
"We said to investors about four years ago we would like at least 25 per cent of earnings to come from non-ARHI businesses and we are there. I think it could go to 50 per cent. We see that as a sign of us growing non-core businesses, not paring back the domestic health insurance business."
Following the announcement, share prices in nib Holdings fell 3.1 per cent to $3.36 – the lowest it has been since January 28 – before rallying throughout the month. As of August 6, the share price was back up at $3.58.
If you're looking for travel or health insurance, a HICA professional can help you save money and find the right policy for you. Call us today on 1300 44 22 01.