nib Group (ASX: NHF) is expecting to report Underlying Operating Profit of $170 million in FY20, down by about $30 million as previously forecasted. The downgrade in profit is because of recent claims environment within its Australian and New Zealand health insurance operations that started to place pressure on the company’s expected earnings.
The company’s Australian health insurance business was witnessing claims growth in line with expectations, but industry data from the December quarter suggests that there will be greater than originally forecast risk equalisation net contribution in FY20.
As a result, FY20 risk equalisation net contribution now expected to be around $250 million, up about $20 million or 9% on FY19.
At AEDT 01:16PM, the stock was trading at $5.685 per share, down by 13.073% from its previous close.
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