The NIB Holdings Limited (ASX: NHF) share price is edging lower on Tuesday morning. This comes as the private health insurer announced an update regarding one of its business segments.
At the time of writing, NIB shares are fetching for $6.80, down 1.02%. In comparison, the S&P/ASX 200 Index (ASX: XJO) is also down 0.47% to 7,349.4 points.
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What did NIB announce?
According to its release, NIB advised that travel insurance sales to Australian and New Zealand residents will be temporarily paused. This includes all brands as well as white label partners with current underwriting arrangements coming to an end.
NIB confirmed that international sales, which account for 75% of total NIB travel insurance sales are not affected. The pause is also expected to not have a material financial impact on the group.
The halt is scheduled to occur next week on 5 October.
Travellers who purchased travel insurance before this date will not be affected, and coverage will continue as normal.
NIB is currently pursuing new underwriting arrangements to ensure they are cost-effective and support future growth ambitions. However, it's anyone's guess where the NIB share price could end up in the coming months.
NIB managing director, Mark Fitzgibbon commented:
Refreshing underwriting agreements on a regular basis helps ensure we deliver optimal and sustainable outcomes both commercially and for our customers. The ending of current arrangements is obviously disruptive but we'll emerge in better shape as travel and market conditions recover.
COVID-19 and prolonged border closures continues to have an impact on all elements of the travel industry.
We plan to resume selling travel insurance to Australian and New Zealand residents as soon as possible to support our customers.
NIB share price summary
NIB shares have been on the move since this time last year, rocketing 60% over the period. When looking at year-to-date, its shares are up around 15%.
Based on today's price, NIB commands a market capitalisation of roughly $3.14 billion and has approximately 457.7 million shares outstanding.
