nib holdings limited expects higher-than-previously-flagged non-recurring expenses in the first half of FY26 (1H26), which will reduce statutory operating profit but will not affect underlying operating profit. Although 1H26 has not yet closed, the group now forecasts about $17 million in non-recurring cash expenses for the half, above the level indicated at its FY25 results briefing in August 2025. By comparison, nib reported $21.5 million in one-off and non-recurring expenses in FY25, including merger, acquisition, and integration-related costs.
A significant component of the 1H26 figure is an estimated net cash expense, before tax, of about $8 million arising from historical adjustments to the Australian Government Rebate (AGR) on private health insurance (PHI) and the New South Wales Hospital Insurance Levy (HIL). nib expects the total AGR/HIL cash impact for FY26 to be about $10 million, with around $2 million to fall in the second half. The group said the Department of Health, Disability and Ageing had clarified that the AGR could not be claimed on some historical marketing offers and COVID-19 customer givebacks, prompting a change in nib’s treatment for future periods. For the HIL, nib said recent legal determinations had confirmed an alternative basis for calculating the levy, allowing nib and other insurers to refund some historically charged levies and partly offsetting the AGR impact. The group has also revised its HIL approach on a prospective basis.
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The 1H26 non-recurring cash items also include restructuring costs associated with a group-wide productivity program and spending on strategic initiatives, including the ongoing review of the nib Travel business. The company expects to complete that review in FY26. Separately, nib expects to recognise a non-cash, pre-tax expense of about $4.5 million in 1H26 for a reduction in the value of redundant acquired software within its nib Thrive portfolio. The charge will be recognised in amortisation of acquired intangibles. Since 2022, nib has acquired six NDIS plan management businesses, a support coordination business, and an NDIS marketplace platform, and has been consolidating most of those operations onto a single technology platform to improve automation and simplify the business model. The group said its 1H26 underlying operating profit is tracking in line with expectations, subject to the second-quarter risk equalisation outcome. nib plans to release its 1H26 results on Feb. 23.
The 1H26 expense update follows nib’s FY25 results, in which the group reported underlying operating profit of $239.2 million, down from $257.5 million in FY24 but in line with previous guidance. Group revenue increased to $3.6 billion from $3.3 billion in FY24, an increase of 7.8%. Incurred claims rose 10.2% to $2.7 billion over the prior year. Net profit after tax increased 9.4% to $198.6 million, up from $181.6 million, while the group operating expense ratio decreased to 17.7% from 18.2% in FY24. Net investment income increased to $79 million, up 28.9% from $61.3 million.
nib managing director and CEO Ed Close said the FY25 figures reflected growth in the group’s Australian private health insurance portfolio, together with outcomes in claims management and cost control. nib’s Australian residents’ health insurance (arhi) business reported its highest sales to date in FY25, and the group now covers almost 2 million people for health insurance across Australia and New Zealand. Net policyholder growth in FY25 was 3.2%, which the company expects will again be higher than wider industry growth.
For FY26, nib is targeting net policyholder growth of about 3% in the arhi business, which it expects to be above its estimate of industry growth, and is aiming to maintain a full-year underlying net margin in the 6% to 7% range. The international students and workers portfolio is expected to remain a significant contributor to group underlying operating profit. The New Zealand health insurance business is forecast to be profitable on a full-year basis, supported by a claims recovery plan that is already in place. In non-private health insurance operations, nib Health Services is targeting full-year profitability in FY26, while nib Thrive is aiming for further growth and operating efficiencies through technology and process changes. The group said the strategic review of nib Travel is well advanced.
