The Australian Prudential Regulation Authority (APRA) has released its quarterly private health insurance (PHI) publications for the June 2022 quarter.
The publications provide industry aggregate summaries of key financial and membership statistics for the private health insurance industry.
The industry reported a decrease in net profit after tax over the year to June 2022 (down 28.0 per cent to $1.1 billion) compared to the previous year. This decline was driven by a fall in investment income, partially offset by higher insurance profits.
The higher insurance profits were driven by a combination of modest claims experience due to COVID-19 related restrictions and movements in insurers’ Deferred Claims Liabilities (DCL1), partially offset by measures taken by private health insurers (i.e. premium rate increase deferrals, givebacks to policyholders) to fulfil their commitments not to profit from COVID-19. Premium revenue increased 3.5 per cent over the year to June 2022, mainly reflecting solid growth in membership, while fund benefits (claims) increased marginally. These trends resulted in strengthening gross and net margins, which increased to 16.9 per cent and 7.0 per cent respectively.
Investment income fell from $604 million in the year to June 2021 to -$293 million in the year to June 2022.
Hospital treatment membership increased by 2.1 per cent or 235,699 persons during the year. The growth was broad-based, with membership in the 50+ age group increasing by 2.4 per cent or 112,942 persons and membership among the younger population (insured persons aged 20 to 49) increasing by 1.8 per cent or 74,294 persons.
Key performance metrics for the industry in the year ended:
June 2021 | June 2022 | Change (annual) | |
Premium revenue | $25.7 bn | $26.6 bn | 3.5% |
Fund benefits (claims) | $22.0 bn | $22.1 bn | 0.6% |
Gross margin | 14.5% | 16.9% | 2.4pp |
Net margin | 5.0% | 7.0% | 2.0pp |
Net investment income | $603.9 m | -$292.5 m | – |
Net profit after tax | $1.5 bn | $1.1 bn | -28.0% |
Copies of the June 2022 quarterly publications are available on APRA’s website at: .
Footnote
1 Claims are benefits reported in financial statements in accordance with the relevant accounting standards, including claims incurred but not reported and claims that are processed but not yet paid which are on an accrual basis. Other benefits statistics in the Membership and Benefits, and Benefits Trends sections of this publication refer to benefits paid and reported on a cash basis. The DCL was raised by insurers to meet the cost of procedures deferred during the pandemic.
