Medibank has announced its result for the six months to the end of December 2020 highlighting policyholder growth of 49,000 across its portfolio of brands.
The company reported a 16.6 per cent increase in group operating profit to $255.2 million with stable premium revenue of $3.3 billion.
Medibank's net claims expense decreased by $24.1 million, or 0.8 per cent, to $2,819.1 million. It said this reflects a 1.8 per cent decrease in gross claims expense that includes a $99 million COVID-related reduction in claims and risk equalisation payable for the period.
The company reported policyholder growth of 49,000 or 2.7 per cent over the six months. It said when adjusted for suspensions and reactivations due to the pandemic, policyholder growth of 2.2 per cent was still higher than the growth of 0.7 per cent experienced in the first six months of the calendar year 2020.
The Medibank brand achieved policyholder growth of 17,600. The company said this is the first time the brand has achieved growth in any 6-month period since 2013.
“Today we have delivered a high-quality result underpinned by strong policyholder growth," said CEO Craig Drummond, who also announced his intention to retire from the company at the end of June 2021.
“We’ve seen a real shift in Australians prioritising their health and wellbeing given COVID and heightened pressure on the public system. This has resulted in the private health insurance proposition becoming more compelling for many Australians, including those who were previously uninsured.
“While it’s far too early to say the decline in industry participation has definitively bottomed, the private health insurance market has proved increasingly resilient and we’ve seen a flight to quality that the Medibank and ahm brands offer."
Mr Drummond said the company has also achieved a significant improvement in customer retention. He said retention across both brands (Medibank and ahm) improved by approximately 30 per cent over the past 12 months.
“Our company has emerged strongly from the disruption caused by COVID. We supported our customers and our people, and we did so without receiving any COVID-related government subsidies," he continued.
“As we’ve already promised our customers, we will continue to assess our COVID deferred claims liability every 6 months. Any permanent net claims savings due to COVID will be given back to our customers through additional customer support in the future.
“This half our Medibank Health business has performed strongly, with significant demand for homecare and virtual care including telehealth.
“Our short stay model of care is gaining traction, with our no gap joint replacement pilot expanding to 6 regions."
Mr Drummond said the company's outlook includes the objective of achieving policyholder growth in excess of 3 per cent, including growing the Medibank brand by 1 per cent.
He said the company is targeting $20 million in productivity savings in the financial year 2021 with an additional $30 million next year.