The Australian Prudential Regulation Authority (APRA) has released its quarterly private health insurance (PHI) publications for the September 2022 quarter.
"The industry reported a significant decrease in net profit after tax over the year to September 2022 (down 49.6 per cent to $0.9 billion) compared to the previous year. This decline was driven by a large fall in investment income, while insurance profits were flat," it said.
Premium revenue for the year to September 2022 increased by 2.4 per cent to $26.8 billion.
"These increases were tempered by some insurers delaying premium increases in order to fulfil their commitments not to profit from COVID-19," said APRA.
Over the same period, claims increased 2.8 per cent to $22.4 billion.
"Gross and net margins declined from the higher growth in claims relative to premium revenue," it said, adding, "Investment income fell from $571.0 million in the year to September 2021 to -$359.5 million in the year to September 2022, driven by falls in fixed interest investments and the value of equities."
Hospital treatment membership increased by 2.2 per cent or 256,768 people during the year to September 2022.
Private Healthcare Australia said it was the ninth consecutive quarter of membership growth with a record 14.37 million Australians now holding private health cover.
“The Australian public clearly believes private health insurance is value for money, despite claims to the contrary from some powerful vested interest groups, who are inexplicably campaigning for a greater share of the cash private health funds have agreed to pay back to consumers as a result of the pandemic,” said Private Health Australia CEO Dr Rachel David.
“We’ve also seen sustained positive growth in Extras coverage with a record 14.36 million people eligible to receive benefits for dental, optical, physiotherapy and other allied health services. In the year to September 2022, health funds paid an annual record high of $5.69 billion for Extras benefits, up 4.7 per cent on the previous year. Many Australians owe their good dental health to their health fund membership.
“Health funds have paid a total of more than $22.4 billion in claims on behalf of members for the year to September 2022, an annual increase of 2.8%. Furthermore, health funds have the highest rate of return to customers of any form of insurance in Australia," added Dr David.