Acquisitions on agenda: NIB
NIB says acquisitions are still on the agenda after a rise in claims pressured the health insurer's first-half profit.
Profit fell 5.3 per cent to $36.3 million in the six months to December 31. NIB blamed inflation driven by private hospital costs and a rise in optical and dental claims.
Chief executive Mark Fitzgibbon said: "The underwriting result, while disappointing, is not entirely unexpected. It doesn't matter which part of the healthcare system you're in, we're seeing inflation in the order of 5 to 7 per cent."
Mr Fitzgibbon maintained a positive outlook for the industry despite caps on the government's health insurance rebate coming into effect next financial year.
He said acquisitions were still "on the agenda" but not the company's sole focus. "We're taking an opportunistic approach," he said.
The company bought New Zealand's Tower Medical Insurance for $80 million in November in its first overseas venture.
NIB shares closed down 2¢ at $2.25.
The company's result reflects a broader trend for the industry, highlighted by UBS analysts last week, which shows profit margins of the big health insurers being squeezed as their members grow older and cash in claims.
NIB will increase its premiums by an average of 6.5 per cent in April to offset changes to the government rebate. NIB's interim dividend rose to 5¢ share, up from 4.25¢.