Health insurer nib expands into NZ

2 Nov 2012, 9:26 am   -   Source: AAP
Private health insurer nib expanded into NZ by purchasing Tower Medical Insurance for $81.7 million. (AAP)

Private health insurer nib expanded into NZ by purchasing Tower Medical Insurance for $81.7 million. (AAP)

Private health insurer nib has expanded into New Zealand by buying Tower Medical Insurance for $81.7 million.

Health insurer nib has bought New Zealand's second largest health insurer Tower Medical Insurance for $81.7 million.

The Australian private health insurer said the acquisition fits with its strategy of growing its international earnings.

"New Zealand is a market with similarities to the Australian health insurance landscape early last decade," nib managing director Mark Fitzgibbon said in a statement.

"There's one dominant player, no obvious competitive tension and the government knows budget constraints mean there must be more future private funding of healthcare."

Tower Medical, a subsidiary of listed financial company Tower Ltd, has market share of about 13 per cent, providing cover to approximately 169,000 people.

It has annual premium revenue of approximately $NZ140 million ($A112.09 million), and made a $NZ6.8 million ($A5.44 million) net profit in the six months to June 30.

The purchase by nib remains subject to New Zealand regulatory approvals, and the purchase price of $NZ102 million ($A81.66 million) remains open to change depending on the final accounts, nib said.

The transaction will be funded through surplus capital and a $NZ70 million ($A56.04 million) debt facility, which will take nib's gearing to 16 per cent.

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