NIB share price surges ahead as profits soar 31%

The health insurer is stunning the market on the back of its strong start to FY23.

Key points
  • The NIB share price is soaring 3% at the time of writing to trade at $7.105
  • That sees it outperforming all its ASX 200 financials peers this afternoon
  • Its gains come on the back of a trading update for the first four months of the fiscal year, presented at NIB's annual general meeting today

The NIB Holdings Limited (ASX: NHF) share price is outperforming all its peers on Friday after the company used its annual general meeting (AGM) to reveal a strong start to financial year 2023.

Headlining the growth, the insurer's net profit after tax (NPAT) came in at $84.1 million for the first four months of the fiscal year – marking a 31.2% increase on that of the prior comparable period.

Right now, the NIB share price is $7.105, 2.97% higher than its previous close.

For comparison, the S&P/ASX 200 Index (ASX: XJO) is up 0.26% at the time of writing.

Meanwhile, the S&P/ASX 200 Financials Index (ASX: XFO) has lifted 0.48%, with NIB coming in as the best-performing stock in the sector.

Let's take a closer look at what's helping to drive the health insurer's stock on Friday.

Three excited business people cheer around a laptop in the office

Image source: Getty Images

NIB stock lifts on early FY23 growth

The NIB share price is outperforming on Friday on the back of a trading update for the first four months of financial year 2023.

Between July and October, the health insurer clocked up $940.4 million of premium revenue – a 4.7% year-on-year jump – and a $109.5 million underlying operating profit, marking a 16.3% increase.

Looking at its individual segments, its travel business' gross written premiums soared 669% in that time to $70.8 million as sales lifted 381% to 257,320.

Meanwhile, the number of policyholders signed up to its Australian residents health insurance grew 4% over the 12 months ended October, and that of its New Zealand business lifted 5.1%.

However, its international inbound health insurance business' policyholders slipped 0.3%.   

Finally, NIB noted its investment income has been volatile lately, but was strong in October. Its investment income is now $21.7 million year-to-date, helping bolster NPAT growth.

Looking to the future, the company is growing its Honeysuckle Health joint venture and looking for more acquisitions in the National Disability Insurance Scheme (NDIS) space.

NIB chair David Gordon commented at the company's AGM:

The NDIS is a vital part of Australia's social capital. It delivers services to more than half a million participants … Currently about 56% of participants use a plan manager, and this is forecast to grow to 60%-70% by 2030.

Earlier this month we completed our first acquisition, Maple Plan … We plan to buy a number of other plan managers and link the buyers and sellers here in the same way as we do in the healthcare sector.

NIB share price snapshot

Plenty of eyes have likely been on the NIB share price in recent times as its health insurance peer Medibank Private Ltd (ASX: MPL) became a headline mainstay amid a major cyberattack.

While the Medibank share price has tumbled 19% over the last 30 days, that of NIB has lifted 5%.

Though, NIB shares have slipped 3% year to date and are trading flat over the last 12 months.

That leaves them in better stead than the broader ASX 200. The index has fallen 6% year to date and 3% over the last 12 months.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. 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 Scott Phillips.

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