Health insurer Nib takes tech-driven approach to entering corporate market and seeks more white-labelling opportunities

By Jenée Tibshraeny

New Zealand’s second largest health insurer is chasing new channels to distribute its products, off the back of tripling its operating profit in the six months to December.

Nib’s New Zealand division has reported an operating profit of $8.4 million, having spent the last three years making a prominent entrance into the New Zealand market.

It acquired Tower’s medical insurance book in late 2012 and ANZ’s OnePath Life medical insurance book in October last year. It also started selling its health and travel insurance products through the Warehouse Money brand in November last year, before launching a tech-driven corporate health insurance scheme, MyHealth HQ, later in the year.

Nib New Zealand’s policyholders grew by 25%, or 21,000 new customers, in the last half year, largely due to the OnePath Life acquisition but also due to some of its own organic growth.

It now has a 15% share of the New Zealand health insurance market.

Nib’s New Zealand chief executive, Rob Hennin, told interest.co.nz in a Double Shot interview, “You’ve seen us buy the OnePath health book to grow our scale.

“It gives us access to a whole new channel of business. You’ll see more to come in that space.”

He says the company sees opportunity entering the New Zealand health insurance market during a time of “decline”, with only 30% of New Zealanders covered by private health insurance.

“And that’s why we thought we could bring something new to the party… the market has lacked innovation in the last decade from the current players, it’s given us a real opportunity to be creative, to offer people new products and services, and again our half year results shows that strategy seems to be resonating with kiwis,” Hennin says.

He says it’s not only a matter of being “flexible” and “innovative” in the way products are created, but also in the way they’re delivered.

Corporate insurance

Nib is applying this approach to its new corporate health insurance scheme, which includes an online portal employees can use to track their health and fitness.

It will enable corporates or small businesses to set up their own company-branded portals online, which employees can connect to their health and fitness apps and devices, and be rewarded for being healthy.

With about 50% of all health insurance in New Zealand sold via employer groups, Hennin says there’s an opportunity for Nib to be better represented in this market.

“What corporates are telling us is their focus is on how they engage with their employees; it’s about the wellbeing of their employees and giving their employees tools to help them look after themselves and their families better.”

He says using fitbits, iWatches and other tracking devices gives people practical solutions to taking care of their health and makes health insurance relevant.

“I think it’s a huge opportunity – not so much to sell private health insurance or travel insurance – but to partner with corporates; to take money they already spend on employee engagement; to take money they already spend on workplace health and safety; but through data, through new platforms, be much more targeted about how you spend it and achieve much higher levels of engagement and wellness.”

White-labelling

Hennin says Nib is seeking more white-labelling opportunities further to it starting to sell its products through Warehouse Money and Qantas in Australia.

“We’ll offer our products when and where you’d like to buy them,” he says.

While Nib is taking a completely different approach to its main competitor, Southern Cross Health Society, an increasing number of general insurance companies are keen to partner with well-known brands.

For example, IAG underwrites most of the banks’ general insurance, Tower underwrites Trade Me Insurance, and new entrant into the commercial insurance market, Ando Insurance, is actively seeking partnership opportunities.

Hennin isn’t worried about people being deterred from buying insurance through a brand like the Warehouse that has no connection to insurance-related products.

He says any trust issues can be overcome by ensuring people know the Warehouse product is backed by a reputable insurer.