- nib holdings just bought Australia’s fourth largest travel insurer.
- It’s paying $25 million for QBE travel.
- The unit will be rolled into World Nomads Group which nib bought in July 2015 for $95 million.
Health fund nib holdings has expanded its travel insurance business by buying QBE travel, Australia’s fourth largest travel insurer, for $25 million.
The deal, which has the potential to grow nib’s travel gross written premiums by up to 40%, is consistent with nib’s strategy of growing its World Nomads Group (WNG) travel insurance business.
nib bought World Nomads Group, Australia’s third largest travel insurance distributor, in July 2015 for $95 million.
Mark Fitzgibbon, nib’s Managing Director, says the travel insurance business has already seen sales lift by 7% for the 2018 financial year.
In the 2017 financial year, World Nomads Group generated $131.8 million in gross written premiums and $7.5 million in underlying operating profit.
“Since acquiring WNG in mid-2015, we’ve made no secret that we like the fundamentals and growth prospects that underpin the travel insurance market,” says Fitzgibbon.
“Travel insurance is much closer to health insurance than most imagine given more than 60% of travel insurance claims are medically related.
“And of course, people travelling internationally more and more is a mega-trend. We’re benefiting from this, not only in the Australian market but also in overseas markets which today account for almost half of WNG’s sales.”
nib’s adjacent businesses, which includes travel insurance, international workers and students health insurance and our New Zealand operations, accounted for 30.4% of nib’s earnings in 2017.
“Aided by the contribution from acquisitions such as QBE Travel, we see a future not too far away, in which these businesses will account for as much as 50% of our earnings,” says Fitzgibbon.
In February, nib announced a 8.9% lift in half year revenue of just over $1 billion and an underlying operating profit of $96.4 million, up 1.3%.
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