HBF reports higher surplus on lower costs

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HBF reported a healthy surplus in 2017-18 helped by the first fall in operating costs in a decade.

The Perth-based private health insurer reported a net surplus of $60.8 million in 2017-18, up 2.1 per cent on the previous year, despite paying a record $1.634 billion in benefits to members.

It said the average HBF member received 4 per cent more in hospital benefits and 4.6 per cent more in extras benefits, compared to the previous year.

According to CEO John Van Der Wielen, “This result will help ensure next year’s premium increase will be even lower than this year - and this year’s increase was already one of the lowest of any health fund.”

The insurer pointed to significant cost-saving decisions during the year, including withdrawing from membership of Members Own Health Funds, ending AFL sponsorships and its use of intermediaries, closure of branches where demand had fallen and internal restructuring to create a flatter and more efficient structure.

It said changes were also made to some products with the goal of ensuring future premium increases are kept to a minimum.

"During the year, HBF made a conscious decision to focus more on looking after its existing members than acquiring new ones," it said, highlighting the decision to end offering short-term incentives to attract new members.

“Enticing sign-up offers are common practice in health insurance, but we believe our offering should speak for itself,” said Mr Van Der Wielen. “We’d much rather direct those funds into higher benefits and better service for our members.”