NHF Details 
Deal with Suncorp Group: NIB Holdings Ltd (ASX: NHF) has lately grabbed a white-labelling deal with life and general insurer Suncorp Group to launch a suite of new private health insurance solutions in Australia. The products are to be made available through Suncorp’s distribution channels while NHF will act as underwriter, and will handle claims and provide administration support. The financial impact is still uncertain but expansion seems to be a move under a lower-risk strategy.
 

Scenario by 2020 (Source: Company Reports)
 
Performance and FY17 guidance: The group’s FY16 revenue was up 14.3% and arhi contributed 72% to group’s underlying operating profit. NHF had updated its FY17 guidance. The consolidated UOP stands unchanged at $130m-140m with statutory operating profit at $122m-132m. The FY17 arhi margin range has been broadened from 5.0%-5.5% to 5.0%-6.0% and drawing rate inflation per person increased from 3%-4% to 3%-5%. However, soft market conditions will prevail in FY17 and investment in growth and expansion of WNG will result in subdued UOP. NHF’s profit margins may gradually decline from 7 per cent of fiscal 2016 owing to the market conditions in FY17. The stock has risen 7.09% in last three months (as at December 08, 2016) and is trading at high levels. Given the volatile conditions, we maintain an ‘Expensive’ recommendation at the current price of $ 4.69

 
NHF Daily Chart (Source: Thomson Reuters)

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