New accounting standards, pressure on household spending, and higher delivery costs are among the reasons offered by Nib NZ for its lower underlying operating profit for full year 2024. It has announced an operating profit of $21.2m for the year – down from FY23’s $33.4m.
Insurance revenue was $402.1mm for the year, up 9.4% on the previous year’s $367.6m, due to a mixture of “…policyholder growth and premium increases”.
- Resident private health insurance policyholder growth was 3.1%
- Insurance service costs rose 14% to $380m in FY24
- The FY23 Nib NZ result benefited from a one-off deferred acquisition cost adjustment of $5.2m
- Net assets of $91.8m, up from $84.6m in FY23
The firm states new international accounting standards and cost pressures impacted its result, along with high inflation.
“Kiwi householders have faced stressors including higher interest rates and sharply higher cost of living pressures over the last 12 months,” says Nib NZ CEO Rob Hennin.
“As in the community, we have seen some of those pressures in the private health insurance sector, with claims costs and utilisation rates much higher than a year ago.
“We are focused on costs and containing inflation in the health sector as much as we can because those costs are passed along to our members.”
Hennin says greater digitisation will deliver savings, provide smoother pathways, and quicker processing of claims.
“We’re delighted to have seen increased take-up of our non-pharmac benefit,” he says.
Nib NZ Chair Hanne Janes says FY25 will bring continued challenges.
“New Zealanders have not been immune from the stresses people all around the world face: economic challenges and cost-of-living pressures, an ageing population, continued difficulties in accessing healthcare, and rapidly evolving technology,” she says.