Today, Medibank Private Limited (ASX: MPL) reported its result for the half year to 31 December 2017.
Medibank is Australia’s largest private health insurer with its Medibank and AHM brands.
Here are some of the highlights compared to last year:
- Health insurance premium revenue up 1.8% to $3.175 billion
- Operating profit up 14.3% to $286.1 million
- Profit per share up 5.9% to 8.9 cents
- Dividend per share up 4.8% to 5.5 cents
The health insurance company pointed to a number of initiatives that it was pleased about. It lauded its Priority program, which recognises and thanks Medibank members who have been with the company for more than 10 years, which gives them a dedicated service line, special offers and a part of the $20 million loyalty bonus.
Medibank says it is being more proactive with customer communication, sending quarterly activity statements to members. Digital registrations are now up to 50% of Medibank policyholders and 75% of AHM.
The company said that it has just experienced the lowest average premium rise in 17 years with 100% of prostheses savings passed directly to customers.
The business has identified more opportunities to grow the business by improving market share in the corporate, non-resident and diversified portfolios. It has also set up new distribution channels with Kogan.Com Ltd (ASX: KGN) and Sigma Healthcare Ltd (ASX: SIG).
Medibank CEO Craig Drummond said “Today’s result reflects the progress we have made in delivering our customers a better experience, better service, better products and more value.”
Health Insurance outlook
The company said that similar underlying revenue trends for the first half are expected for the FY18 result, including the 3.88% rate change on 1 April. Medibank said that no material change is expected in hospital utilisation growth in the second half, while extras is expected to be a bit lower. Management expenses for the FY18 year are expected to be lower than FY17.
Mr Drummond continued “There is urgency for further structural reform to the health system to maintain the downward pressure on health costs and premiums and we are looking forward to working with the committees established by the Federal Government into out of pocket costs and low value care.”
Improving affordability remains a key focus and we need to keep working even harder to deliver on this promise for our customers. – Drummond
The Medibank share price is up 2.63% this morning according to Google Finance.
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