nib holdings limited reported a 9.4% increase in net profit after tax to $198.6 million for FY25, alongside a 7.8% rise in group revenue to $3.6 billion. Despite a dip in underlying operating profit, the company declared a fully franked final dividend, maintaining its full-year payout at 29 cents per share.
- Net profit after tax up 9.4% to $198.6 million
- Group revenue increased 7.8% to $3.6 billion
- Underlying operating profit declined 7.1% due to New Zealand challenges
- Australian Residents Health Insurance policyholders grew 3.2%
- Final dividend of 16 cents per share declared, full year dividend steady at 29 cents
Strong Financial Performance Amid Market Challenges
nib holdings limited has delivered a solid financial performance for the year ended 30 June 2025, reporting a net profit after tax (NPAT) of $198.6 million, marking a 9.4% increase from the previous year. Group revenue rose 7.8% to $3.6 billion, reflecting growth in core business segments despite a competitive and inflationary environment.
Underlying operating profit (UOP) declined by 7.1% to $239.2 million, primarily impacted by ongoing challenges in the New Zealand insurance market and persistent claims inflation. The company’s Australian Residents Health Insurance (arhi) segment showed resilience, growing policyholders by 3.2% and implementing a 5.79% price increase effective April 2025 to manage cost pressures.
Segment Highlights and Strategic Initiatives
The International Inbound Health Insurance (iihi) business also expanded, with a 2.4% increase in policyholders and a 14.4% rise in insurance revenue, driven by disciplined sales and repricing strategies. Conversely, nib’s New Zealand business faced a 2.0% decline in policyholders amid economic softness and high claims inflation, although targeted interventions improved second-half performance.
nib Travel, encompassing brands such as Travel Insurance Direct and World Nomads, reported a modest 3.2% increase in gross written premium excluding the loss of the Qantas contract. The business is currently under strategic review, with outcomes expected in FY26.
The Health Services division, which includes Honeysuckle Health and Midnight Health, progressed towards breakeven, reducing losses from $17.8 million to $5.9 million. Full ownership of Honeysuckle Health was secured during the year, enhancing nib’s capabilities in health management and digital health services.
Capital Position, Dividend, and Leadership
nib maintains a robust capital position with a prescribed capital amount (PCA) ratio of 1.89x, comfortably exceeding regulatory requirements. The Board declared a fully franked final dividend of 16 cents per share, sustaining the full-year dividend at 29 cents per share with a payout ratio of 70.6% of NPAT.
Leadership changes included the appointment of Ed Close as Managing Director and CEO from December 2024, succeeding Mark Fitzgibbon who retired after more than two decades of service. The company’s remuneration framework continues to align executive incentives with sustainable performance, incorporating risk and conduct considerations.
Digital Transformation and Risk Management
nib is advancing its digital-first strategy and AI integration to enhance customer experience and operational efficiency. The company’s health management programs enrolled over 22,000 participants, and telehealth services expanded through Midnight Health, particularly benefiting rural and remote Australians.
Risk management remains a priority, with ongoing focus on claims inflation, regulatory compliance, and operational resilience. The company actively engages with government and industry stakeholders to navigate policy changes and maintain affordability and access for customers.
Bottom Line?
As nib navigates evolving healthcare dynamics and regulatory landscapes, investors will watch closely for the outcomes of its travel business review and continued progress in digital innovation.
Questions in the middle?
- What will be the strategic direction and ownership outcome for nib Travel following the ongoing review?
- How will nib manage claims inflation pressures, particularly in New Zealand, in the coming year?
- What impact will the accelerated adoption of AI and digital health services have on nib’s cost structure and customer engagement?