Medibank Private Ltd (ASX: MPL) shares are under pressure today following the release of the insurer's half-yearly results for FY21.
At the time of writing, the Medibank share price has dipped to $2.83, down 2.08%.
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What did Medibank announce today?
The private health insurance provider announced a net profit after tax of $226.4 million for the 6 months ending 31 December 2020 – a 27.3% increase compared to the prior corresponding period (pcp).
The company attributed the increased profit primarily to a net gain of 49,000 policy holders over the period. 17,600 of these new customers signed up for Medibank-branded insurance itself.
"This is the first time we have grown the Medibank brand in any 6-month period since 2013 and this trend has continued into February," the company said in a media release today.
Medibank's results stand in stark contrast to the private health insurance industry at large. According to the Australian Prudential Regulatory Authority, industry profitability was down by 2 percentage points on the pcp — driven largely by the COVID-19 pandemic.
The pandemic led many private health insurance providers, including Medibank, to postpone premium increases for 6 months. Medibank stated the postponement cost the company $109 million in revenue. Despite this, revenue from premiums did rise 0.3% to $3.3 billion.
In further good news for shareholders, net claims expenses also decreased by 0.8% compared to the pcp, or $24.1 million. Gross claims fell by 1.8%, including a $99 million COVID-related reduction in claims and risk equalisation payable for the period. Underlying claims, adjusted for COVID impacts and provision movements, rose by 2.6%.
The company announced a dividend of 5.8 cents per share fully franked.
Medibank CEO to retire
Along with today's financial announcements, Medibank Private CEO Craig Drummond announced he is retiring from the position come 30 June.
Mr Drummond made the following comments about the results release and his impending retirement.
"Pleasingly Medibank is on a clear strategic path to grow the private health insurance business at a faster rate and continue its transformation into a broader healthcare company."
"Leading Medibank through this transition has been incredibly rewarding."
The Medibank share price during Mr Drummond's tenure saw a modest decline – starting around $3 when he first started while opening this morning at $2.89. During his time, Medibank shares hit a high of $3.65 and a low of $2.33.
Future outlook
Medibank is continuing its investment in healthcare. The company also announcing an expansion of its no gap joint replacement pilot into 6 regions. The pilot is a part of the company's investment into a 'short-stay model of care' program – a long-term venture aiming to reduce hospital-related expenses for both customer and company.
As of 15 February, Medibank Private is still the leading private health insurance company in Australia with a 26.9% market share and 3.7 million customers, according to comparison site ComparingExpert.
