Nib Holdings expects conditions to remain challenging for its travel insurance business as the division suffered a steep decline in first-half earnings due to border closures caused by the pandemic.

The listed group says Nib Travel, the third largest travel insurer in the Australian market, continues to be “materially affected by COVID-19 restrictions on travel” although there has been a “small improvement” in sales.

“COVID-19 has had many malign consequences across the Nib group,” MD and CEO Mark Fitzgibbon said. “It’s… caused uncertain market conditions and totally disrupted parts of our business such as… travel insurance.”

Nib Travel’s operating income in the six months to December 31 plunged 90.8% to $4.4 million from a year earlier. It reported gross written premiums of $2.8 million, down 97.2% from a year earlier as the number of polices sold dived to 25,450 from 605,635.

A non-cash impairment charge of $7 million against the division’s intangible assets has been made to reflect the “more difficult outlook for travel,” Mr Fitzgibbon said.

“It’s all a bit gloomy at the moment yet COVID-19 will pass and our travel business is well positioned for recovery and growth when travel restrictions are relaxed or borders re-open,” he said.

“The hiatus is actually providing us with an opportunity to recalibrate and modernise the business.”