Despite younger, health-conscious customers helping keep claims under control, Australia’s largest private health insurers are split on the need for a big hike in premiums this year.
Private health insurers are split on the need for a big hike in premiums this year to keep pace with rising health costs, as low claims and soaring policyholders reflect a sector in rude good health.
The growing base of young customers, combined with a pandemic-induced dip in customer claims for health expenses, increased the gross profit margin for the industry by 17.6 per cent last year, according to data released last week by the Australian Prudential Regulation Authority.The regulator said claims costs increased just 2.4 per cent last year compared to premium growth for the sector of 3.3 per cent driven by membership growth.
Conversely, Medibank’s David Koczkar is not convinced claims growth is recovering from its COVID-induced malaise just yet. “I can’t speak for others, but when I look at our underlying claims, growth of 2.6 per cent expectation for FY24, that will be the basis upon which we review our premium increases,” he said.
The health insurer reported a 30 per cent rise in net profit to $511 million for the year ending June 30, 2023.
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