Medibank has reported a fall in profit for the financial year 2020 and the appointment of a new chair.
The insurer has announced a 12.8 per cent fall in group operating profit, down to $461 million, against a 2.5 per cent increase in benefits outlays to $5.5 billion.
The result comes after the company announced further extensions in its support for customers during the COVID-19 pandemic.
The company also announced that Mike Wilkins will succeed current chair Elizabeth Alexander on 30 September.
“Despite the challenges of COVID-19 our business remains well positioned and we continue to work hard to support our customers, our people and the community," said CEO Craig Drummond.
He said, “Health has never been more important to Australians, and this is demonstrated by our ability to grow our resident policyholder numbers by 10,600 in FY20 at a time of significant uncertainty. Furthermore, as at 8 August 2020, we have seen resident policyholders grow by approximately 21,000 in FY21 so far.
“Customer advocacy has improved for both the Medibank (+7.0) and ahm (+2.7) brands over the year, while employee engagement increased to 91% in April 2020.
“We remain focused on differentiating and growing our private health insurance business through leveraging our dual brand strategy and transforming into a broader healthcare company.
“This has been the right strategy to navigate through COVID-19, and we have made good progress on our milestones in FY20.
“Health funds were among the first to act to assist customers in the pandemic. Medibank determined right from the beginning that we would support our customers as they were impacted by the changes that had to happen during COVID-19.
“We have responded quickly in our support for customers, with a support package of more than $185 million. This included a 6-month postponement of premium increases and a financial hardship package including a 50% waiver on premiums for 6 months for those in financial hardship."
Mr Drummond said forecasts the private health insurance sector would benefit from the pandemic have not been realised.
“The industry regulator APRA has said the vast majority of surgeries and extras services disrupted through COVID-19 will ultimately take place. In preparation for this, we have accrued a $297 million balance sheet liability," he said.
“While claims have largely returned back to normal levels, albeit some elective surgery in Victoria is now paused, if there are additional permanent savings we will stick by our promise and return them to customers.
“As we continue to transform into a broader healthcare company, we have expanded our no gap joint replacement pilot from Melbourne to hospitals in Sydney, Brisbane and Adelaide and recently acquired a 49% minority shareholding in East Sydney Private Hospital. Our investment will fund the capital and operational costs required for the hospital and doctors to scale their short stay model of care.
“Medibank Health has continued to grow despite the impact of the pandemic on some areas of the business. Our telehealth team has played a major role in the government’s public response to COVID-19 which meant we needed to rapidly scale operations to meet demand. Furthermore, we expect rising demand from customers for in-home care," he said.
“Despite the ongoing financial and health impacts of COVID-19, Medibank remains well positioned in the broader health industry. Strong customer and employee advocacy, a clear strategy and a sound financial position continue to buffer the company to the continuing uncertainty,” added Mr Drummond.