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    2023 Half Year Results - A solid result with business momentum returning

    Duration: 1.44 | Size: 76.59 MB

    We’ve delivered a solid result, driven by our commitment to support our customers – a focus which continues to drive our business and inform the decisions we make.

    We recognise the significant impact the cybercrime has had on our customers, and we continue to support them through our Cyber Response Support Program. Our learnings from this event continue to shape our response and we’ve shared a cybercrime update below, including an outline of what happened, our customer and technology response, the steps taken to close down the attack path and our focus areas moving forward.

    While we did see impacts to resident policyholder growth in the second quarter, we’re seeing positive signs of recovery and steady performance in Medibank Health despite the external environment.

    We increased resident policyholders by almost 35,000 over the past 12 months. However, with the loss of almost 13,000 policies in the second quarter, growth over the last 6-month period was more subdued, with policyholders up 1,700. Policyholder losses slowed in January, followed by growth of 200 this month up to 18 February. A standout has been the significant growth in our international business which added 33,400 (+17%) non-resident policies over the half.

    Understanding our customers and supporting their needs will always be at the heart of our business. While our short-term focus is on regaining momentum in our core resident business, our strategy to grow as a health company has not changed and we remain focused on supporting our customers and providing them with greater access, choice and control over their health.

    Increasing value for our customers
    As cost-of-living pressures continued to rise, we maintained our long-term focus on affordability. We worked hard to keep premium increases as low as possible for our customers, delivering our lowest premium increase in 22 years and deferring it for 2 months. Our COVID customer support now exceeds $1 billion – the largest financial give back from any Australian health insurer to date – and we remain committed to not profit from COVID.

    Customers saved around $12 million in out-of-pocket costs through our Members’ Choice Advantage network and we paid around $3 billion in total claims. Our no gap network expanded to 27 hospitals, giving more choice and savings to customers needing common procedures like joint replacements or endoscopies. We also broadened the range and doubled the number of providers in our Live Better Rewards program, with customers redeeming around $16 million in rewards points to date.

    HY23 value

    Focusing on our customer experience
    By creating simpler solutions and better connections to health and wellbeing, we delivered a better experience for our customers. Digital claims were up 29% and self-service interactions increased 24% this half. As we continued integrating Live Better into the My Medibank app, almost two thirds of new Live Better users joined via the app, which we continue to enhance with the development of Home for Health, connecting health and wellbeing services. While customer advocacy was impacted by the cybercrime event, this has begun to rebound as we’ve worked to support our customers.

    2023 half year results focusing on our customer experience

    Supporting the health and wellbeing of our customers
    Enrolments in our preventative health programs increased by 6% and Live Better Rewards is on track to achieve 670,000 members by July. Around 25% of our customers admitted to hospital received personalised support through our Health Concierge program and we delivered around 1.3 million virtual health interactions to our customers and the community.

    We’ve invested in new care settings to provide more choice for our customers. East Sydney Private Hospital opened a new orthopaedic theatre to deliver short stay surgery and support the public system, and construction continues at Macquarie University Hospital on a world-class orthopaedic surgical centre in Sydney and at Adeney Private Hospital in Melbourne which we expect will open mid next year.

    We’re also supporting more public patients through our Amplar Health team, delivering virtual healthcare services for state governments that are helping reduce the pressure on hospitals and strengthen our health system.

    2023 half year results supporting the health and wellbeing of our customers

    Delivering for shareholders
    Our shareholders will receive an interim fully franked ordinary dividend of 6.3 cents per share.

    Key financials
    Continued momentum in the Health Insurance business, solid performance in Medibank Health despite the external environment, and a strong capital position resulted in Group operating profit increasing 7.4% to $307.8 million. Investment income grew to $55.9 million but was offset by $26.2 million of non-recurring costs associated with the cybercrime event.

    2023 half year results key financials

    An update on the cybercrime
    Outline of what happened:

    • The criminal accessed our systems using a stolen Medibank username and password used by a third party IT service provider
    • The criminal used the stolen credentials to access Medibank’s network through a misconfigured firewall which did not require an additional digital security certificate
    • The criminal was able to obtain further usernames and passwords to gain access to a number of Medibank’s systems and their access was not contained
    • Following the triage of a security alert on 11 October we closed down the criminal’s attack path and can reconfirm no further activity by the criminal since 12 October 2022 has been detected inside our systems

    What we’ve done in response
    Our customers

    • Continued to support customers through our Cyber Response Support Program
    • Continue to maintain additional resources in our phone and messaging channels to continue to support customers through 2H23
    • Launched additional security measures for customers who call us

    Our technology

    • Implemented further controls around our technical perimeter, including ensuring that the firewall authentication was fully configured across the whole network
    • Bolstered existing monitoring and added further detection and forensics capability
    • Successfully completed Operation Safeguard

    External review/OAIC investigation

    • Deloitte conducting an external review, and that review is ongoing
    • Co-operating with the Office of the Australian Information Commissioner in its formal investigation

    Our focus moving forward
    Prioritise the support for our customers and ensure they have confidence in the protection of their data

    Continue to strengthen our security environment, which currently defends around 18 million perimeter attacks a day

    Reinforce with our people that security is everyone’s business, and uplift the security literacy of all our users

    Continue to evolve our approach to data management, particularly in light of impending reform to the Privacy Act and changing community expectations

    HY23 cybercrime

    *This is a summary of our financial results presentation and the other reports we’ve shared today. For a full overview of our HY23 results, we recommend you review the available documents on our downloadable reports section on this page or on our investor centre.

    For further information please contact:

    For media

    Emily Ritchie
    Senior Executive, External Affairs
    +61 429 642 418

    For investors/analysts

    Christina Nallaiah
    Head of Investor Relations
    +61 468 362 553

    For a complete list of all ASX announcements, please visit our Investor Centre.

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