nib’s 5.47% Premium Increase Reflects $2.3 Billion in Claims Growth
nib Group has announced a 5.47% average increase in health insurance premiums for 2026, citing rising hospital costs and increased claims. The insurer highlights efforts to ease out-of-pocket expenses and support chronic illness management amid sector-wide pressures.
- 5.47% average premium increase approved by Health Minister
- Claims payments rose nearly 9% to over $2.3 billion in FY25
- More than half of policyholders face a weekly rise of $3.80 or less
- nib invests in gap networks and chronic illness programs
- Partnerships with hospitals aim to improve sustainability
Premium Increase Reflects Rising Healthcare Costs
nib Group, one of Australia's leading health insurers, has announced a 5.47% average increase in its health insurance premiums for 2026. This adjustment, approved by the federal Minister for Health and Ageing, Mark Butler, is designed to keep pace with escalating costs in the healthcare sector, particularly payments to both private and public hospitals.
The insurer emphasises that the increase has been kept as modest as possible, with more than half of its policyholders facing a rise of $3.80 or less per week. This move comes amid a broader trend of healthcare cost inflation that continues to outstrip general inflation rates, driven by higher claims and increased utilisation of health services.
Claims Growth and Customer Support Initiatives
During the 2025 financial year, nib paid out over $2.3 billion in claims, marking an almost 9% increase from the previous year. This translated into nearly 400,000 hospital admissions and 4.3 million visits to allied health providers such as dentists and optometrists. The rising claims volume underscores the growing demand for healthcare services and the financial pressures on insurers.
To mitigate out-of-pocket expenses for customers, nib has expanded its gap networks, enabling almost 80% of its members to benefit from no-gap or known-gap payments when treated by medical specialists. Additionally, the company supports around 22,000 customers with chronic illnesses through health management programs, which have reportedly saved over 24,000 hospital bed days by focusing on prevention and in-home care.
Strategic Partnerships and Market Position
nib has also forged partnership agreements with several major hospital groups to foster more sustainable healthcare outcomes. With over $1 billion paid to hospitals in FY25, these collaborations are critical in managing costs and improving service delivery.
Despite the premium rise, nib continues to attract new customers, with approximately 52,000 Australians choosing nib for private health cover in FY25 who were new to the market. This suggests that private health insurance remains a relevant and valued option for many Australians amid ongoing public health system pressures.
CEO Ed Close reiterated nib’s commitment to delivering value and accessibility, highlighting the insurer’s proactive approach to balancing cost pressures with customer care.
Bottom Line?
As healthcare costs climb, nib’s premium hike signals ongoing challenges; and opportunities; in Australia’s private health insurance landscape.
Questions in the middle?
- How will customers respond to the premium increase in terms of retention and new sign-ups?
- What impact will nib’s hospital partnerships have on future claims costs and premium settings?
- Can nib’s chronic illness programs sustainably reduce hospital admissions over the long term?
