Health insurer NIB Holdings has reinstated profit guidance for the first time since pandemic lockdowns began as the health insurance sector continues to escape the big slide of 2020 that saw Covid forced patients, doctors and hospitals to postpone elective surgery.
The fund told investors on Monday it had underlying operating profits of $140.9 million for the nine months to March.
Policyholder numbers are up 3.7% while claims are still lower than expected, leading the company to predict a full year profit of between $200 and $225 million.
The company’s profit for the first half, released in February, was $86.9 million, so the three months to March saw a surge in earnings – $54 million in fact.
Insurers across the sector have included “catch up provisions” on their balance sheets to cover claims that would have been recognised last year but were instead delayed because of elective surgery disruptions throughout Covid lockdowns.
However, “the extent of “catch-up” in the third quarter in healthcare treatment deferred during the various Covid lockdowns appears at this stage to be slower than that assumed at 31 December 2020,” NIB said in an update to the ASX.
The strong performance of the business will let NIB “selectively invest” in marketing and other growth projects over the next few months, the company said.
Investors twigged to the improved outlook and lifted the shares more than 10% to $5.94. That’s the highest the shares have been since the start of January.
