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Health insurance market "soft": NIB CEO

Stuart Condie  |  19 Feb 2018Text size  Decrease  Increase  |  
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SYDNEY - [AAP] NIB Holdings (ASX: NHF) managing director Mark Fitzgibbon says the Australian health insurance market is as soft as he can recall after the insurer's first-half profit dipped 1.3 per cent to $70.9 million.

Mr Fitzgibbon says sluggish wage growth and stiff competition are weighing on NIB, which has posted a decline in net profit for the six months to December 31, largely due to its $155.5 million purchase of corporate health insurer GU Health.

"The domestic Australian health insurance market is as soft as I can recall," Mr Fitzgibbon said.

"Household incomes aren't growing and there's sure no shortage of competition in the market place."

Nonetheless, NIB has raised its guidance for full-year operating profit from $155 million to at least $165 million and says it expects net profit of at least $148 million--up from $119.6 million in 2017.

Although net profit slipped from $71.8 million the same time a year earlier, underlying profit for the six months to December 31 rose 1.3 per cent once the $3.6 million of costs associated with the purchase and acquisition of GU Health were stripped out.

GU Health, the purchase of which was part funded by a capital raising, contributed $28.4 million of revenue in two months.

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NIB'S STEADY FIRST HALF

* Net profit down 1.3pc to $70.9m

* Net premium revenue up 8.6pc to $1.05bn

* Interim dividend up half a cent to nine cents, fully franked

 

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© 2021 Australian Associated Press Pty Limited (AAP) or its Licensors. This is the Morningstar service with content provided by AAP where indicated. AAP reserves all rights, including copyright, in services provided by it. The information in the service is for personal use only, does not constitute financial product advice (whether general or personal) and may not be re-written, copied, re-sold or re-distributed, framed, linked or otherwise used whether for compensation of any kind or not, without the prior written permission of AAP. You should seek advice from a professional financial adviser before making decision to acquire or dispose of a financial product.

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