HUNTER-founded health insurer NIB's net profit fell 16.6 per cent to $133.8 million in the 2022 financial year, a result it blamed on "volatile" financial markets which impacted its investments.
Releasing its results for the 2022 financial year on Monday, the private health insurer reported that its group underlying operating profit rose 14.8% to $235.3 million in the 12 months to June 30; while its group underlying revenue grew 7.2% to $2.8 billion.
The net profit after tax [NPAT] losses represented a negative swing of $81.8 million on previous year earnings of $51.8 million.
NIB managing director Mark Fitzgibbon said that the insurer's performance was "essentially strong", with its Australian Residents Health Insurance (ARHI) business growing 3.2%, well above what it expects the industry will report, and premium revenue rising 5.2% to $2,286.2 million. The group also marked its best fourth quarter in seven years.
The strength of ARHI and its New Zealand business had, he said, helped offset pandemic-inflicted weakness in other parts of the Group, such as travel and international student insurance businesses.
Mr Fitzgibbon said while the investments-linked NPAT result was "disappointing", it was "in line with what is happening in the marketplace", and that NIB had recorded strong growth during the pandemic.
"Nobody celebrates the misery and disruption of COVID for a minute but the reality of it is it has increased the level of aware in the community of risk of disease and protection," he said, adding that COVID-19 had also accelerated innovation within the company.
He said that despite the pressures of interest rate rises and the resulting stress on household budgets, "by and large" NIB continued to perform well, increasing its underlying revenue by more than 7 per cent despite deferring premium increases.
The NIB boss said the company's international inbound health insurance and travel insurance businesses were also making a fast recovery.
Emphasising NIB's "very good" group underlying profit result, Mr Fitzgibbon said that the net profit loss fuelled largely by volatile financial markets had occurred despite NIB's "very conservative" risk profile.
"The reality is that the investments market has lost a lot of money. We wore that which dragged down that [net profit] result, but that is separate to our operating profitability," he said.
NIB reported that its claims fell 3.1% to $1,525.8 million as lockdowns impacted the willingness and ability of members to access surgery and healthcare.
Mr Fitzgibbon said he expected those figures to normalise once COVID was "well and truly behind us" and factors such as restricted hospital activity and workforce shortages abated.
"What we have challenged ourselves to do is seize the opportunity so when things do return to normal, we can make the system all the more efficient and better for members," he said.
Mr Fitzgibbon said the fact that the insurer recorded its strongest fourth quarter in seven years reflected in part its "flexible product design, sharp pricing and good brand" alongside its "multi-channel" approach that saw its health insurance sold through partners including Qantas, Priceline and other well-known brands.
NIB has 665,773 health insurance policy holders in Australia, 70,000 of those in Newcastle and near surrounds.
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