Private Health Insurance – Profit Reports
BUPA Australia has reported a 12% increase in profit to £278 million ($401 million) for the 12 months ending December 31.
This compares to a profit of £249 million ($359 million) for 2011.
Revenue in the 2012 calendar year was up 9% to £3.5 billion ($5 billion), compared to £3.2 billion ($4.6 billion) in 2011.
BUPA CEO Stuart Fletcher says growth in its Australian and New Zealand health insurance was driven by expansion of the corporate business, development of new products and additional marketing investment.
“The business performed very well in 2012 with revenue and profit up, driven by strong growth of share in the corporate market and the successful launch of three products targeted at families,” he says.
Mr Fletcher says the Australian Government’s move to introduce means testing for private health insurance has caused some customers to become more price-sensitive.
“This trend is expected to continue in 2013,” he said. “Price increases, which are Government-regulated, were also lower than expected, squeezing margins.”
Mr Fletcher says despite some customers downgrading their cover as a result of the rebate reform, the private health market continues to grow, with customer numbers up 4%.
“We achieved a higher share of private health insurance customer growth than any competitor in the 12 months to June 2012,” he said.
HCF Profits up despite rebate cuts
One of Australia's biggest private health insurers, HCF, has rued the former government's decision to slash rebates for private insurance but tipped increased revenue and membership numbers this financial year.
Owned by its members, HCF increased membership and net profit in 2013, despite the ''less than supportive environment''.
Health policy numbers grew by 4 per cent to 662,256 and net premium revenue grew by 10 per cent to $2.1 billion. But staff numbers and branch numbers fell, the company said in its annual report.
Managing director Shaun Larkin said: ''Significant legislative changes to private health insurance during the last parliament will make the cost of health insurance to many Australians considerably higher than it has been. These legislative changes are now in varying stages of implementation, and the impact on HCF has been obvious.''
The previous government began means testing the private health insurance rebate, and introduced other measures, in a bid to cut the cost of the rebate.
This led to stark increases in premium costs for many members, although the latest industry figures show 47 per cent of Australians have hospital cover and 55 per cent have ''extras''.
Still, the Private Health Insurance Administration Council figures show profit for the industry fell by 12.6 per cent to $1.32 billion over the year to September. Insurers' premium revenue grew by an annual 7.1 per cent, PHIAC said, but benefits increased 9 per cent.
nib posts 8% profit rise as more Aussies take out health insurance
Private health insurer nib Holdings (ASX: NHF) has posted a 7.9% rise in net profit after tax to $75.3m for its 2015 financial year, driven by 4.7% policyholder growth in its core Australian Residents division.
Operating profit rose 13% to $81.7m, while net investment income—which includes net fair value gains or losses on financial assets, rental revenue from leasing of investment properties and interest income—was up 5.8% to $31.4m.
The company declared a final dividend of 6 cents per share, bringing the full year fully franked dividend to 11.5 cents per share and representing a profit payout ratio of 67%.
Earnings per share (EPS) for the insurer finished the year up 8.8% at 17.3 cents, while net premium revenue increased 9.6% to $1.6bn.
nib operates across four divisions: Australian Residents Health Insurance, New Zealand Residents Health Insurance, International (Inbound) Health Insurance and nib Options.
Australian Residents' contribution to total net premium revenue was $1.4bn, while the New Zealand division brought in $150.4m. Revenue in the International business (comprising health insurance products for international students and workers in Australia) was $54.9m.
nib Options—which, according to nib's segment descriptions "facilitates access to cosmetic and dental treatment both overseas and here in Australia"—made an FY15 loss of $3.8m.
What NIB said
"We expect [the Australian resident private health market] will continue to grow given favourable macro-economic conditions, low consumer confidence in the public hospital system and ongoing Government policy support," said nib managing director Mark Fitzgibbon.
Speaking to nib Option's loss, Fitzgibbon said, "it's still early days for nib Options and the truth is we're still largely in 'start-up' mode and learning. Being part of a very significant global trend still makes good sense to us".
nib forecast operating profit between $85m and $90m in the 2016 financial year.
Investment income was expected to be lower than in FY15, but "still in line with relevant internal benchmarks", nib said today.