All You Need to Know About nib Holdings’ Recent Updates

  • May 20, 2019 AEST
  • Team Kalkine
All You Need to Know About nib Holdings’ Recent Updates

nib holdings limited (ASX: NHF) is involved in the health insurance business. The company is a provider of medical and health insurance to more than 1.5 million Australian and New Zealand residents, along with health insurance to more than 160,000 international students and workers in Australia.

nib’s Managing Director, Mr Mark Fitzgibbon, has informed that he sold 80,000 nib shares (which he held directly) on market on 21st May 2019. Mr Fitzgibbon sold 80,000 shares to meet a personal income tax obligation resulting from past awards of remuneration for his role in the form of nib shares.

The company recently announced that it had purchased QBE’s travel insurance business. The announcement of purchase was first made on 3rd August 2018. Included in the acquisition was the claims and distribution capability of QBE Travel.

The business will be re-branded to nib Travel with the final purchase price of $24.2 million, which reflects the level of business generated. The projected one-time transaction and integration costs of the company are ~$11 million, whereas the amortisation of related identifiable intangibles is anticipated to be roundabout annualised $2 million.

NHF’s Managing Director, Mark Fitzgibbon, said that the domestic travel insurance market position of the company will be strengthened by the acquisition, with nib Travel being Australia’s third largest travel insurer. He stressed on the fact that the acquisition is in line with the company’s strategy of growing the travel insurance operations domestically and across the globe. The company expects nib Travel’s annual domestic gross written premium to increase by more than 50%.

Mr Fitzgibbon said that the acquisition adds considerable scale to nib’s existing platform to deliver further revenue and cost synergies.

The company maintains several business strategies, including sustainability, growing the core business, etc. The economies of scope are leveraged by the company by using the existing group assets and capabilities to pursue adjacent business opportunities for both growing the value of the business and diversifying the risks. It enhances investments for several objectives, including the growth in the international workers and students, travel insurance in New Zealand and Chinese businesses and deliver the identified new prospects.

The 2021 value proposition of the company includes supporting members in selecting a level of financial protection more in keeping with their individual risk profile, predict and hopefully, prevent or mitigate disease risk, generally improve their health literacy and behaviour with information and tools relevant to their risk profile and health objectives, choosing medical treatments more precisely when required and transaction with healthcare providers and system.

At market close on 27th May 2019, the stock was trading at $6.680. It has yielded a YTD return of 30.74% and exhibited returns of 35.48%, 13.90% and 15.86% over the past six months, three months and one-month period, respectively. Its 52-week high price stands at $6.880, and the 52-week low price stands at $4.640, with an average trading volume of 919,404. The stock is trading at a PE multiple of 22.470x.


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