Health insurer nib Holdings has expanded its presence in the travel insurance market, with the purchase of QBE’s travel insurance business. The deal, which was announced in August last year, was completed on Monday.
nib paid $24.2 million for QBE Travel, which will folded into nib’s World Nomads Group (WNG). New policies will be underwritten by Axa XL.
Travel makes up a small part of the nib business currently. It acquired WNG, Australia’s third largest travel insurance distributor, in 2015 for $95 million.
For the six months to December WNG contributed $2.3 million of underlying operating profit to group UOP of $114.3 million. The WNG result was down 51 per cent on the previous corresponding period, which the company said reflected its investment in a global expansion strategy plus a “challenging domestic market”.
International sales were up 14.4 per cent during the half-year but domestic sales were down 22.1 per cent, which the company said was due to strong competitor activity in the online channel.
At the time the acquisition was announced, QBE Travel was ranked as Australia’s fourth largest travel insurer, with a network of 2000 travel insurance agents and a number of partnerships.
nib says the deal has the potential to increase WNG’s annual domestic gross written premium by 40 per cent.
“We like the fundamentals and growth prospects that underpin the travel insurance business,” nib chief executive Mark Fitzgibbon said when the deal was announced.
“Travel insurance is much closer to health insurance than most imagine, given that more than 60 per cent of travel insurance claims are medically related. The WNG business can access nib hospital and provider network, claims management capability and distribution channels.”
WNG is a managing general
agent which performs all the functions of an insurer other than carrying the
underwriting risk. This includes product design, pricing, marketing, sales,
claims payment and emergency assistance. Its international markets include
North and South America, Asia and Europe.