Australia’s largest not-for-profit health fund, HCF, and Western Australia’s largest health fund, HBF, have announced they are considering a merger.
The proposed merger would see the creation of a new major national player in the health insurance industry with 18.4 per cent market share.
"The merger is a logical fit, given both funds’ not-for profit structure and member-first approach," said HCF in a statement. "Any merger will be subject to regulatory approvals and other conditions."
The Boards and Councillors of HCF and HBF must approve the proposed merger.
According to HCF CEO and managing director, Sheena Jack, a merger of Australia’s third and fifth largest health funds would give not-for-profit health insurers a greater voice in the industry.
“The not-for-profit business model exists for its members, rather than shareholders and plays a vital role in our economy, not just in private health insurance but across many industries. The best interests of our combined membership would, as always, be our number one focus,” said Ms Jack.
“This merger of equals would provide a significant increase in size which will enable greater benefits to be passed on to members. Strategically, this merger would create a truly national player with combined strength to grow both brands and better compete in what is a challenging industry,”
HCF chairman, Robert Goaley, said its number one priority has always been its members and this will continue.
“HBF lives by that philosophy too. Combined, we could reduce upward pressure on premium increases due to an enhanced competitive position in the market and offer a superior customer experience,” said Mr Goaley.
The merged entity would have a combined asset position of $4 billion. The merger could be completed in the middle of the year following required regulatory approvals, including from the ACCC and APRA.
If approved, an entity will be established with a Board comprising equal numbers of directors from HCF and HBF, with a transition period during which the operations of the two will be combined.