Brace for higher health insurance premiums, NIB boss says

afr.com:

Health insurers will have start lifting premiums at a much faster rate to stay ahead of higher claims, but NIB Holdings chief executive Mark Fitzgibbon says any price hike will be far lower than the huge 20 per cent increase to home and car insurance costs.

After NIB delayed its annual premium bump three separate times during the pandemic, customers will see their bills jump 2.72 per cent from September.

“Those couple of years of very low increases are behind us,” NIB chief Mark Fitzgibbon says. Michael Quelch

While this is far below the 20 per cent price hike IAG has flagged for home insurance in June, Mr Fitzgibbon said the situation was no longer sustainable for NIB.

“Our increase this year, which was deferred, was well below 3 per cent,” he told The Australian Financial Review, following the company’s 11 per cent jump in operating profits to $263.2 million in the 2023 financial year.

“As things return to normal, maintaining premium growth under 3 per cent when your claims inflation is closer to 5 or 6 per cent is just not sustainable. Those couple of years of very low increases are behind us.”

Any increase will further fuel to inflationary pressures that have squeezed household budgets. Borrowers are feeling the pressure at both ends: with inflation far higher than its target band, the Reserve Bank has lifted interest rates 4 percentage points in just over a year to get it back under control.

Mr Fitzgibbon, however, said NIB was “not getting to the point where we increase premiums to the extent” of general insurers such as IAG, QBE and Suncorp.

Given the federal government must approve premium increases in the industry, it is also unlikely that any significant rise would get signed-off by the government.

He added