The private health insurer says its FY16 results were driven by hospital utilisation rates that were “lower than expected”. Revenue from ordinary activities were up 2.5 per cent, at $6.7 billion.
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The health insurance industry’s growth had continued to slow as customers found it harder to afford the increase in premiums and dropped their cover.
“While Medibank has paid $5.1 billion in claims this year on behalf of our customers, some challenges remain with the value we offer to our customers”.
Customers’ switching from one insurer to another had increased, and contributed to Medibank’s loss of market share.
Mr Drummond, who began in July from National Australia Bank where he was chief financial officer, said that revenue growth was soft due to the “underperformance” of the Medibank brand and a slowing market.
During Medibank’s yearly results announcement this morning, Drummond said the organisation needs to be easier to deal with and the new core system will be key to improving the customer experience.
CEO Craig Drummond said the company will focus on bettering its customer service and product offering and expects its new core policy management system to be fully operational in 2017.
The revenue increase comes after the federal government approved average premium rate increases of 6.59 per cent from April 2015 to 5.64 per cent from April 2016.
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The full year dividend of 11 cents per share was declared, compared to the inaugural single payment of 5.3 cents in the first seven months of the company’s operation after listing.
