Australia’s biggest health insurer, Medibank Private, has lifted its market share and revenue but says the outlook for growth in the domestic market is flat.
Medibank posted a one per cent drop in full-year net profit to $445.1 million as a result of a fall in investment income.
However health insurance premium revenue for the year to June 30 rose 1.2 per cent to $6.32 billion as a result of premium increases.
Average revenue per policy for Australia’s biggest health insurer increased by 1.9 per cent for the year.
“Our customer base remained stable at 3.74 million, in a market which saw industry growth continuing to slow,” Medibank said in a statement.
The insurer lifted market share slightly in the second half of 2017/18 to 26.9 per cent, the first time it had recorded growth in a decade.
Medibank’s customer count grew by 0.3 per cent compared to a 1.3 per cent reduction in 2016/17.
Claims paid out by the health insurer rose by $47.7 million, or 0.9 per cent, to $5.2 billion.
Of those expenses, hospital claims were down slightly by about $1 million to $3.91 billion, while extras claims went up 3.9 per cent to $1.31 billion.
Dental expenses, which make up more than half of extras claims, rose three per cent, as did optical, physiotherapy and chiropractic claims, while alternative therapies claimes were up 10 per cent.
Revenue for the Medibank Health division increased by 6.9 per cent, or $39.8 million, due to a 12 month contribution from its HealthStrong mobile aged care service, as well as growth in travel, life and pet insurance revenue.
The health insurer suffered a $43.7 million reduction in investment income due to lower market returns and a conservative asset allocation strategy.
Chief executive Craig Drummond said the full-year results demonstrated the core health insurance business is back on track.
He also said the company is close to acquiring an in-home health care business worth an estimated $70 million.
“This is an opportunity to add scale and capability to our in home offering, through a national in-home care business with clinical experience and capability,” he said.
The Medibank at home division expects to more than double its customers from 936 to 2000 in 2018/19, not including an estimation from the at home business nearing acquisition.
Looking ahead, Mr Drummond said the outlook for the private health insurance market was flat for 2018/18 and while Medibank aimed to lift market share the company is also facing higher expenses.
He said the company expects flat overall private health volumes to continue into the next financial year.
Medibank’s shares had fallen by as much as 5.5 per cent on Friday but had recovered to be down 1.26 per cent to $3.13 at 1340 AEST.
PREMIUM MEDIBANK PROFIT
* Net profit down 1pct to $445.1m
* Revenue up 1.2pct to $7.01b
* Fully-franked final dividend of 7.2cps, up from 6.75 cents