world-iconInternational and New Business

The continued diversification of nib and growth of adjacent non-arhi businesses accounted for more than 25% of the Group’s operating profit. The performance of these businesses reflects our aim of creating enterprise value by leveraging existing assets, infrastructure and capability.

International Students Health Insurance

nib entered the market for international students more than four years ago keen to take advantage of growing student numbers and the compulsory requirement for them to have health insurance.

The 2014 financial year was significant for the business, making our first operating profit. This was on the back of increased scale and a business strategy that is separating us from our competitors. Our operating profit of $1.9 million compared favourably with a loss of around $0.1 million in the 2013 financial year.

It is evident that profitability reflects strong policyholder growth with more than 26,000 international students now covered, compared to just over 9,000 at the end of financial year 2013. Premium revenue grew more than 110% to $9.2 million during the 2014 financial year.

We expect the market for international students to remain strong and nib to grow our share. With increasing scale and a more focused business strategy we also expect to improve margins.

International Workers Health Insurance

Despite a softening Australian labour market, our international workers health insurance (iwhi) continued to grow. As at 30 June 2014, nib provided health cover to more than 19,000 migrant workers in Australia, compared to just over 18,000 at the beginning of the year. Premium revenue was up 4.0% to $28.7 million.

Profit margins within the business remain strong, with iwhi’s 2014 financial year net margin of 32.9% (FY13: 30.5%). iwhi’s operating profit for the period of $9.4 million (FY13: $8.4 million) accounted for 13.1% of our Group operating profit.

The 2015 financial year will see increased investment in marketing and distribution to further grow our share of the skilled migrant worker market and, as a result, further grow Group earnings.

nib Options

After more than two years in development, nib Options was launched in March 2014.

nib Options facilitates customers receiving cosmetic surgery and major dental treatment by highly reputable clinical specialists and facilities, both in Australia and overseas. It is a fee-for-service product that provides safe, simple and reliable choices for consumers wishing to undertake cosmetic and major dental procedures in Australia or overseas. It is not a health insurance offering.

nib Options is only in its infancy and made a $2.5 million loss in the 2014 financial year as we invested in creating the business. Efforts to date have largely focused upon developing marketing plans, systems, resources and hospital networks. The 2015 financial year will also see investment in further building the business, including significant marketing investment and acceleration of business activity.