BHP may have left town a long time ago, but the private insurer that grew from the steelworks health fund, NIB, has grown steadily and successfully since it demutualised and listed on the stock exchange in 2007.
In 11 years its shares have gone from 85 cents to more than $6.60, and in another strong result on Monday, it announced a net profit after tax of $133.5 million, up 11.1 per cent, on underlying group revenues of $2.2 billion, also up by more than 11 per cent.
Two-thirds of those profits will be paid out to shareholders with annual dividends of 20 cents a share, up a cent on the 2017 payout.
Financially, the company that managing director Mark Fitzgibbon likes to characterise in a self-deprecating way as “little old NIB” has managed to carve out a successful niche for itself in an industry that almost half of the Australian population relies on to cover a substantial proportion of their health care expenses.
Private health insurance can be a touchy topic in this country, but it stands to reason that NIB would not be growing the way that it is – and lifting its policyholder numbers the way that it does – if it wasn’t doing as well, or better, than its competitors in keeping its customers happy.
Its preferred way of measuring this is to publish what’s called a “net promoter score” – the difference between those who are happy with a company and those who are not.
At 28.7 per cent, the NIB score cannot be regarded as sensational, but it’s noticeably above where the company was two years ago, when it was under 18 per cent. Importantly, it is also above some of its major competitors.
While the performance of NIB is most important to its customers and its owners, its success – or otherwise – is also a reflection on our region, given its status as one of our biggest and most high-profile businesses.
No-one doubts the Hunter’s ability to get things done when it comes to digging coal or fabricating steel, but the magnetic attraction of the Sydney financial sector may well be a factor in what could be seen as the region’s difficulties in generating much in the way of white-collar success stories.
Over the past decade, NIB has been the exception to that rule, showing everyone – and perhaps, most importantly, ourselves – that the Hunter has the financial acumen to hold its own on the national stage.