Medibank will this week attend the 2025 Macquarie Australia Conference where group executives will meet with investors and participate in a Q&A session with Macquarie analysts.
The following business update and healthcare insights will be shared with investors during the conference.
Business resilience
Medibank’s operating businesses are not expected to be directly impacted by global market volatility with all of our operations based in Australia.
We expect that our primary exposure to this global volatility to be in the investment portfolio where we have approximately $240 million invested in domestic and international equities (1), however these assets have generated a positive return in the first four months of 2025.
Medibank’s investment portfolio is also exposed to the RBA cash rate, where a 25bps movement has an approximate $7 million annual impact to investment income.
Any further reductions in the RBA cash rate are expected to provide some cost-of-living relief to Australians supporting healthcare affordability, customer growth and health industry resilience.
Delivering for our customers
This year, we have progressed several initiatives that are aimed at supporting the health of our customers, recognising their loyalty and keeping healthcare affordable as cost-of-living remains a concern in the community. This includes:
- A cash give back to Medibank customers of a further $160 million announced in February 2025, bringing the total amount of support Medibank has provided to customers as part of our COVID-19 support package to a record $1.62 billion – the largest of any health insurer in Australia. This give back applies to all customers who are members on 30 June 2025
- A limit rollover for ahm customers at 30 June 2025 enabling them to claim on unused extras for services such as dental, physiotherapy and psychology over the next 12-months (2)
- A $50 million investment in mental health over the next 5-years which aims to increase access to innovative models of care, give customers more choice around mental health providers and unlock a range of new mental fitness prevention initiatives
- An increase in the number of agreements with diagnostic providers which will further reduce customer out-of-pocket costs for pathology and radiology services
We remain focused on keeping premiums affordable for our customers, while balancing rising health costs.
On 1 April 2025, our average health insurance premium increased by 3.99% – the lowest of the four largest funds in Australia and below the industry’s premium weighted average increase of 4.38%.
Sustained momentum in customer growth
APRA statistics for resident PHI released in late February 2025 demonstrate continued industry resilience despite ongoing cost-of-living pressures. Resident industry policyholder growth was 2.33% over the 12- month period to 31 December 2024 compared to 2.06% in the 12 months to 31 December 2023.
Importantly, growth in the number of customers new to the industry remains robust, while the number of under 30-year-olds with hospital cover has had the largest 12-month increase since 2012.
We have remained disciplined in our approach to growth by targeting priority segments (including families, corporates and those new to the industry) and focusing on customer retention.
We continue to monitor and act on sensible opportunities for growth, which strengthens our brands, differentiates our products and accelerates growth in the Medibank brand.
We expect that we have grown broadly in line with market during the March 2025 quarter, including volume growth in the Medibank brand, and remain on track to deliver volume growth in the Medibank brand in FY25.
Non-resident policy unit growth in the March 2025 quarter was higher than in 1H25, while the number of customers transitioning to resident policies has increased. We have continued to invest in this attractive market with a particular focus on growing our share of the worker and visitor segments during FY26 and further improving customer life cycle management.
Resident claims trends have continued
Trends impacting claims during 1H25 have continued into the second half, including ongoing softness in extras claims and lower risk equalisation payments which reflects the benefit of favourable age claiming patterns and our disciplined approach to growth.
Hospital claims have continued to be below expectations since 31 December 2024 (but not as significantly as in late November and December).
Private hospital indexation has increased in line with expectations, and we continue to broaden our relationships with hospitals, funding strategic initiatives through our partnership approach to contracting that helps offset higher levels of indexation.
Based on claims trends in the March 2025 quarter, expected claims per policy unit growth for FY25 continues to be 2.4% to 2.6%.
Supporting the health transition as we grow
Medibank is committed to creating the best health and wellbeing for Australia. Our strategy to grow as a health company is enabling us to differentiate our health insurance offering by investing and innovating across our key focus areas including in the health and wellbeing, primary care and specialist and acute care segments.
We are broadening our relationship with customers, with around half of Medibank policyholders now engaging with our health and wellbeing services.
Our preventative program enrolments are at an all-time high, while our Live Better rewards program now boasts over 900,000 participants.
Our Online Doctor program offered through Medibank’s Overseas Student Health Cover app has seen more than double the number of interactions in March 25 FYTD compared to the same time last year.
Momentum continues across our primary care network. Myhealth is seeing improved billing mix and higher growth in consultation numbers in March 25 FYTD versus the prior corresponding period. Myhealth’s strong multidisciplinary and multichannel capabilities are enabling this growth, with future momentum bolstered by political investment and support for change in the primary care sector to better meet the health needs of consumers.
We see further opportunities to grow in primary care by expanding our offerings to Medibank customers, growing our clinic footprint and pursuing inorganic growth.
Our Amplar Health network continues to focus on emerging customer needs across both the public and private health systems. We have recently partnered with the Federal Government to better support the residents of 30 aged care homes through virtual nursing services and began delivering a new transition care service to hospital patients in South Australia who no longer require acute care. This is alongside the recent opening of Nundah Private Hospital which integrates hospital and community mental healthcare, as well as Adeney Private Hospital – Australia’s first no-gap hospital.
Medibank will continue to advocate for our customers and accelerate the health transition, while diversifying our earnings in health.
We remain focused on further volume growth and expanding our healthcare offerings, including delivering more services to Medibank customers and offering existing services to a wider set of payors.
We continue to target at least 15% average organic profit growth per annum between FY24 and FY26 in Medibank Health plus a 12-month contribution from Myhealth in FY25. We aim to augment this by investing between $150 million and $250 million through M&A during the same period.
(1) As at 31 December 2024
(2) Excludes non-annual limits and optical and orthodontics where they have separate limits
This announcement has been authorised for release by the Board.
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