Younger customers have flocked to Medibank Private as the coronavirus pandemic raged over the past year, with the fund seeing its number of policyholders grow by 4.6 per cent.
The $9.7 billion health insurer has recorded a close to 40 per cent profit jump to $441.2 million, and declared on Wednesday investors will receive a final dividend of 6.9 cents per share, taking its full-year payout to 12.7 cents from 12 cents a share in the prior year.
David Koczkar plans to evolve Medibank from a health insurer to a healthcare business.Credit:Arsineh Houspian
Chief executive David Koczkar said heightened concerns about the coronavirus and pressures on the public health system had boosted the appeal of private health insurance.
The company added 82,500 net policyholders in 2021, with premium revenues increasing 2.1 per cent to $6.7 billion. Youth-focused brand ahm provided the biggest boost, with memberships up 10.9 per cent for the year.
“Our ahm brand continues to attract younger customers, which will have positive impacts on the overall sustainability of the health system,” management said in its full-year report.
The increase in younger customers also meant the insurer had to pay more into the “risk equalisation pool”, however. All health funds must contribute to this fund to help ensure sustainability across the sector and guarantee that insurers with a higher proportion of older or sick members are supported.
Medibank paid $24.6 million into the pool in 2021, compared with the $7.9 million it received in 2020.
The 2021 result was also powered by a rise in the company’s investment income, which had plummeted last year due to COVID-related sell-offs on global markets. Medibank’s investments returned $120 million for the year, a jump of $117.6 million on a year ago.
Mr Koczkar warned policyholder growth is expected to slow in 2022, with the company targeting gains of just 3 per cent into the next year.
The insurer said in its full-year report it would step up its focus “on enhancing value by moderating health system cost growth, particularly in a post-COVID-19 environment.”
More to come.
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