nib Holdings reported a 9.1% rise in underlying operating profit to A$260.9 million for fiscal 2026, aligning with prior guidance of A$257–267 million, as cost efficiencies offset softer revenue growth. Group revenue increased 6.2% to A$3.8 billion, while net profit after tax declined 5.9% to A$186.9 million. The insurer's shares fell 8.38% to close at A$6.78, extending declines to 9.19% intraday from a 52-week high of A$8.26.
The company delivered A$61 million in productivity savings during the year, bringing cumulative gains since FY24 to A$79 million. Total operating expenses declined 0.7%, while the group operating expense ratio improved by 110 basis points to 16.6%. Net operating cash flow rose 20.2% to A$199.1 million, and free cash flow turned positive at A$27.0 million, compared with an outflow of A$21.7 million in FY25. Debt reduction totaled A$71.8 million, with the gearing ratio improving by 490 basis points to 15.2% and the leverage ratio declining to 0.6x from 0.8x.
Australian residents health insurance generated an underlying operating profit of A$187.9 million on revenue of A$3.0 billion, with a net margin of 6.2%—within the 6–7% target range but down 110 basis points from FY25. Policyholder growth slowed to 1.9%, while lapse rates increased to 16.2% from 14.7%. Claims inflation moderated to 4.1%, excluding NSW bed rate changes, compared with 5.9% in FY24. The management expense ratio fell to 9.9%, the lowest since FY17, as automation and digital tools reduced manual effort by over 26,000 hours.
Adjacent businesses contributed A$86.1 million in underlying operating profit, up A$41.9 million year-over-year, with international health insurance rising 15.1% to A$35.1 million. New Zealand operations returned to profitability at A$27.5 million, while nib Health Services achieved its first full-year profit of A$2.4 million. The company expects to complete the sale of its travel business in FY27, with net cash proceeds estimated at A$97 million.
For FY27, nib guided to an underlying operating profit of A$265–285 million, excluding the travel business and subject to risk equalization outcomes. The projection implies growth of 1.6% to 9.4% from the FY26 base. The insurer also raised its target dividend payout ratio to 65–75% from 60–70%, declaring a final dividend of 21.0 cents per share, including a 5-cent special dividend funded by the travel business sale proceeds.
Chief Executive Ed Close described the group as "a simpler, more focused, and more efficient business" following strategic reviews, while noting that industry offers were driving "very high levels of unsustainable churn." Chief Financial Officer Nick Freeman highlighted productivity as a material driver of performance, stating it is now "embedded in how we operate."
