Zurich Insurance Group has stepped back from the bidding process to acquire NIB’s travel insurance division, easing potential regulatory concerns in what has been one of the year’s most highly anticipated insurance sales.
The sale, being managed by investment bank Jarden, initially attracted interest from up to seven potential buyers. Zurich, with its ownership of Cover-More, a major player in the travel insurance market, was considered a frontrunner. However, industry sources now confirm that the Swiss insurer has withdrawn, leaving Allianz and Hollard as the leading contenders.
In May, NIB announced it was conducting a strategic review of its travel insurance business. By August, the company reaffirmed that a decision was imminent, with an expected outcome within the current financial year.
The travel insurance division operates under well-known brands such as NIB Travel, World Nomads, and Travel Insurance Direct. While June saw the highest monthly sales in two years, profitability has faced challenges. Underlying operating profit for the year to June dropped by 17.3% to $6.7 million, despite a 1.7% increase in gross written premiums, which reached $170.7 million.
Executives pointed to stricter cost control measures, with operating expenses decreasing by 6.7%, and reported operating income of $88.1 million. The ongoing review will determine whether NIB exits the travel insurance market entirely, after more than a decade of growth in the segment.
Australia’s travel insurance market is valued at around $1.8 billion in annual revenue, with Allianz holding a 25% market share, followed closely by Zurich at 24%. NIB controls 8.4% of the market, while IAG holds a smaller 2.4%, according to IBISWorld data.
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