The private health insurer says its under provisioning indicates underlying claims growth per policy unit was 2.4 per cent for the 12 months to June 30, rather than the 2.0 per cent reported at its full-year results in August.
“This, when combined with our October claims payments indicates a trend, and we now expect the increase of claims per policy unit in the second half of FY19 to continue throughout FY20,” Medibank said on Wednesday.
The ASX-listed firm said its claims experience highlighted the need for further government reform as private health insurers struggle to improve affordability against rising costs.
Shares in Medibank were 7.94 per cent lower at $3.13 after 40 minutes of trade on Wednesday, still up 22 per cent for 2019.
Health insurers are increasingly feeling the pinch as a rising number of Australians abandon private hospital cover due to the cost.
APRA’s 2018/19 annual report on private health insurers showed the number of Australians with private hospital cover fell by a net 30,000, with Medibank’s hospital cover customers dropping by 16,000 to 2.81 million over the financial year.
Medibank’s total policyholder growth for the year was 0.8 per cent – driven by its budget AHM brand – and the company said it had grown policyholders by a further 0.6 per cent, or 10,000 people, in the first quarter of FY20.
There are no changes to other outlook comments provided at Medibank’s FY19 financial results.
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