Global insurer Zurich has emerged as the most likely candidate to acquire NIB’s travel insurance operations, following confirmation from the health insurance group that it has launched a strategic review of the unit, with investment bank Jarden appointed to evaluate future options.
NIB’s move to reassess the future of its travel division comes as part of a broader reshaping of its business focus amid subdued profits and volatility in its New Zealand operations. The review coincides with the departure of Rob Hennin, who led both NIB New Zealand and its travel business, and reflects mounting pressure to rationalise less-profitable segments.
The travel insurance portfolio - which includes brands such as World Nomads Group, Travel Insurance Direct, and NIB Travel - has long operated on a distribution-only model, with underwriting left to external parties. While the segment contributed strongly prior to the pandemic, generating upwards of A$20 million in annual EBITDA, its performance in recent years has lagged, with FY25 first-half operating profit falling to just A$1.9 million.
Though no final decision has been announced, industry observers have told The Australian that Zurich Insurance Group - owner of Cover-More - as the most likely acquirer. Zurich has signalled continued appetite for travel insurance scale in the region, particularly following its acquisition of AIG’s global personal travel insurance portfolio in late 2024. A tie-up with NIB’s travel brands would cement Zurich’s dominance in the segment.
Sources close to the deal told The Australian that a valuation in the vicinity of A$200 million, though this will hinge on the outcome of due diligence and appetite for travel-adjacent business segments.
The review comes against a backdrop of changing economics for NIB. While group revenue climbed 7.7% to A$1.8 billion in the first half of FY25, operating profit fell sharply, dropping 26.7% to A$105.8 million amid softer returns in its Australian health insurance book and a swing to losses in New Zealand.
NIB’s New Zealand unit recorded a NZ$10.9 million operating loss, as cost pressures and high claims inflation (17.6%) continue to erode margins. Hennin’s resignation as CEO of both the travel and New Zealand arms comes at a pivotal moment, with the insurer aiming to stabilise operations and return to profitability in the second half.
Group CEO Ed Close stressed the importance of focusing on segments that support sustainable growth. “We remain intent on managing claims inflation and refining our pricing strategy to protect long-term margins,” he told investors at the Macquarie Australia Conference.
Meanwhile, NIB’s international inbound health business delivered solid growth, with policyholder numbers rising 10.6% and profits increasing 11.2%. It remains a bright spot as the company looks to redirect capital to higher-margin, core verticals.
For insurers and reinsurers tracking the evolving dynamics of travel risk, NIB’s potential exit from the travel space mirrors a wider industry rethink. The sector, once buoyed by global mobility and rising outbound volumes, has faced a turbulent recovery post-pandemic. Uncertain immigration policy settings, macroeconomic headwinds, and rising cost-to-serve have continued to suppress performance.
Zurich’s strategic consolidation in the space is notable. In addition to acquiring Cover-More for A$741 million in 2017, the Swiss giant completed its deal with AIG for Travel Guard and associated businesses in late 2024, excluding certain Asia-Pacific components. The acquisition has allowed Zurich to widen its footprint and deepen capabilities in customer assistance and digital platforms, reinforcing its investment in customer-centric travel cover.
For Zurich, the opportunity to fold NIB’s travel brands into its portfolio could offer valuable synergies in branding, customer acquisition, and global reach - particularly in the Australian and US markets where both companies operate. However, any deal will also face scrutiny over integration risks and price discipline in a market where volatility remains a concern.
Should NIB proceed with the sale, it would mark a big step in its post-pandemic recalibration and allow the company to redeploy resources into segments like private health and NDIS plan management, where it continues to see margin strength and operational scale.
For the broader insurance community, the trend reflects an increasing focus on core discipline, risk-adjusted capital allocation, and a willingness to step away from legacy business models no longer fit for purpose. As travel remains sensitive to exogenous shocks - from geopolitical unrest to global health events - the re-pricing and repositioning of such portfolios will remain central to underwriting strategy.
With guidance unchanged for FY25 and a payout of 13 cents per share due in April, NIB appears committed to delivering shareholder returns while rationalising its portfolio. The strategic review of its travel unit may ultimately signal a broader repositioning that aligns with both the macro risk environment and a sharper focus on sustainable, scalable health insurance solutions.
1. Cover-More (Zurich Insurance Group)
3. nib Travel
4. Southern Cross Travel Insurance (SCTI)
5. Bupa Travel Insurance
6. InsureandGo (MAPFRE Group)
7. Medibank Travel Insurance (underwritten by Cover-More)
8. Qantas Travel Insurance
9. Fast Cover Travel Insurance
10. RACV / NRMA / State-Based Motoring Clubs
The Australian travel insurance sector is experiencing a sustained rebound, driven by renewed demand in the wake of post-pandemic travel recovery. After several years of contraction and uncertainty, the market is now entering a phase of stabilised growth, albeit one shaped by inflationary headwinds, digital disruption, and evolving customer expectations.
Recent estimates suggest that the Australian travel insurance market was valued at just over AUD 11 billion in 2024, with forecasts indicating moderate to strong growth over the next decade. Some projections anticipate the market could reach AUD 16 billion or more by 2034, representing a compound annual growth rate in the mid-single digits. More aggressive forecasts suggest growth as high as 17% annually through 2030, fuelled by the resurgence in outbound travel and a sharp increase in policy take-up among younger travellers.
Single-trip travel insurance policies have gained particular traction, reflecting demand for flexibility and cost efficiency. These products are proving attractive not only for leisure travellers but also for the growing digital nomad and remote working segments.
There has been a noticeable pivot in consumer behaviour, with travellers now seeking more comprehensive coverage that extends beyond traditional trip cancellations and lost baggage. Medical emergencies, pandemic-related disruptions, and geopolitical volatility are front of mind for consumers when selecting policies.
This shift has driven insurers to broaden the scope of standard policies while also developing modular add-ons that cater to specific risks, such as natural disasters, active conflict zones, or high-risk destinations. The inclusion of 24/7 assistance services, digital claims processing, and real-time policy management tools are becoming baseline expectations.
Technology is reshaping the competitive landscape. From AI-enabled claims processing to mobile-first policy servicing, digital integration is no longer optional. Insurers that lag in platform agility or user experience are at a competitive disadvantage.
Digital-native brands and insurtechs are also driving innovation in distribution, leveraging travel platforms and aggregators to offer embedded insurance options at the point of sale. These frictionless offerings are especially appealing to younger demographics less inclined to shop for standalone policies.
While top-line growth is returning, profitability remains challenged. Inflation, particularly in healthcare and repatriation costs, has driven up claims values, putting pressure on loss ratios and requiring premium recalibration across the market.
This, in turn, raises concerns about accessibility and price sensitivity - especially among younger travellers and families. Some insurers have reported a slight shift toward basic cover, though lapses in comprehensive coverage can create longer-term risks for both consumers and underwriters.
The outlook for Australian travel insurance is broadly optimistic, but the sector is in flux. Market players must contend with legacy operational inefficiencies, rising claims inflation, and increasing demand for personalisation and transparency.
For insurers evaluating portfolio strategy, such as NIB with its potential divestment of its travel arm, the key consideration will be balancing capital efficiency with brand positioning. As global players like Zurich continue to consolidate their footprint through acquisitions, scale, service sophistication and digital capability will be critical competitive levers.
In this environment, underwriters, intermediaries, and reinsurers alike are being urged to rethink risk frameworks, recalibrate pricing models, and invest in platforms that can flex with shifting travel behaviours and geopolitical uncertainty.
