Medibank says it is 'back on track' after reporting $6.9 billion in revenue for the full-year to 30 June 2018 with a 9.7 per cent increase in profit to $548.8 million.
The company's health insurance business dominate the result, reporting a $38.1 million increase in operating profit to $535.6 million, on the back of a 1.2 per cent rise in premium revenue. The company paid $5.3 billion in benefits.
"At a Group level, policyholders grew by 4,800 in FY18, compared to a 24,200 reduction in FY17," said Medibank in a statement, adding it had achieved a reduced lapse rate during the year.
"Management expenses fell by 2.0% to $557.2 million, with the management expense ratio (MER) down from 9.1% to 8.8%. This reflects the progress made on Medibank’s productivity program which has delivered savings of approximately $20 million during the year," it said.
The company's investment income fell 31.4 per cent to $95.6 million, which it attributed to lower returns across both growth and defensive portfolios and a more conservative asset allocation.
According to CEO Craig Drummond, “The progress in our company is pleasing. We are now positioned for growth with a focus on leveraging our dual brands, building competitive advantage in health insurance and transforming into a broader health services company.
“The highlight for the year has been a substantial turnaround in customer advocacy and retention, driven by consistently delivering a better customer experience, more value and recognising customer loyalty. These improvements have seen market share grow 5 basis points over the past 6 months. This is the first time in a decade we have experienced growth over a 6-month period.
“This result demonstrates that our core health insurance business is back on track and in the coming year we will continue to transform our relationship with our customers and deliver a more personalised and proactive experience.
“Customer feedback has been very positive on the Priority program we launched this year and the $20 million one-off loyalty bonus. The next step will be the launch of our Live Better loyalty offering which will reward customers for taking healthy actions."
The company reported revenue in its Medibank Health business rose 6.9 per cent to $615.9 million. Its operating profit increased by $11.6 million or 32.5 per cent.
Mr Drummond said transforming Medibank into a broader health services company is a core part of its strategy.
"We have made progress in scaling Medibank at Home, providing customers with choice over how and where their healthcare is delivered. Medibank at Home trials have expanded to include dialysis, in addition to chemotherapy and palliative care. In its first year of national rollout, rehabilitation in the home delivered services to 850 customers, ahead of our target, while HealthStrong has had good momentum since joining Medibank 12 months ago."
The company said it expects the flat overall health insurance market to persist but that it is targeting modest market share growth in the current year.