NIB (ASX:NHF) share price on watch following business update

The NIB Holdings Limited (ASX: NHF) share price will be on watch today following a trading update and full-year outlook. Here’s the details.

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The NIB Holdings Limited (ASX: NHF) share price will be on watch this morning. This comes after the company provided investors with a trading update as well as a full-year outlook.

At last week’s market wrap, the private health insurer’s shares finished at $5.39.

How did NIB perform?

NIB shares could be on the move today as investors weigh up the company’s latest trading performance and outlook.

For the 9 months ending 31 March 2021, NIB reported that its business was “performing well” despite the ongoing uncertainty surrounding the COVID-19 pandemic.

The company’s core Australian Residents Health Insurance (arhi) business saw an increase in policyholders, recording a total of 641,804, up 3.7% compared to FY20. NIB stated that claims experience, especially risk equalisation, is lower than originally expected.

Consequently, unaudited group underlying operating profit (UOP) for the period is sitting at $140.9 million.

The company’s provision for deferred and suspended claims during the pandemic (COVID-19 provision) for arhi came to $59 million. This compares to $70.7 million recorded for the first half of FY21. NIB noted that deferred healthcare treatments during COVID lockdown periods appears to be slower for Q3 than during the first half of FY21. The group stated that forecasting claims experience remains challenging in the current environment.

Nonetheless, according to NIB, its strong arhi performance coupled with the stable trading conditions in New Zealand is offsetting its weaker performing segments. These include the company’s international inbound health insurance (iihi) and travel insurance businesses.

NIB is focusing on diverting its investment to a number of projects. It hopes that providing improved health services to members and travellers will lead to continued growth.

The NIB share price will be in focus today after the company advised it is forecasting group UOP to increase to between $200 million and $225 million. In the first half of FY21, the company achieved a UOP of $86.9 million.

NIB revealed it will present its FY21 results to the ASX on 23 August 2021.

About the NIB share price

Over the last 12 months, the NIB share price has gained around 12% but has fallen close to 11% year to date. The company’s shares reached a 52-week high of $6.16 at the start of this year, before slightly pulling back.

On valuation metrics, NIB commands a market capitalisation of roughly $2.4 billion, with 457.7 million shares on issue.

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Motley Fool contributor Aaron Teboneras owns shares of NIB Holdings Limited. The Motley Fool Australia has recommended NIB Holdings Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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