The Medibank Private Ltd (ASX: MPL) share price is moving higher this morning. This follows the release of the private health insurers' annual report for 2021.
While the financial results had already been shared with investors back on 25 August 2021, today's release comes with some added details and commentary.
At the time of writing, the Medibank Private share price is down 0.28% to $3.55 in early trade.
Let's dive into the report.
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More customers getting more back
To kick things off, the report opens with an elating one-liner, stating "We grew more in the past 12 months than we have in over 10 years." Such a statement could have investors jumping for joy.
Although the exact metric being measured isn't specified, we know that it's not pertaining to the company's net earnings after tax. In FY21, Medibank's group net profit after tax increased 39.8% to $441.2 million. We only need to go back to FY16 to see earnings grow more than this. For reference, FY16 witnessed the bottom line climb 46% to $417.6 million.
Additionally, customer numbers across the Medibank and ahm brands have slipped since 2016 as well. According to its annual report at the time, the company served 3.8 million customers. Meanwhile, the company counts 3.7 million people as customers — a reduction of nearly 3%. This might be weighing on the Medibank Private share price this morning.
However, what has increased is the amount of money paid in claims to customers. For the recent financial year, Medibank coughed up $5.6 billion in claims, increasing 2% from the prior year. In fact, the company's COVID financial support package for customers was the largest in its 45-year history.
To date, Medibank has provided $300 million, with $103 million in COVID permanent net claims savings being returned in premium relief. Adding to this, CEO David Koczkar said, "We stand by our commitment not to profit from COVID and will continue to return any related permanent net claims savings to our customers."
This act of returning some of the premiums paid by customers was in recognition of the impact COVID has had on people's ability to use their health insurance.
It appears premium return helped bolster the company's brand among customers. In the year, Medibank customer advocacy rose 5.3 points to 37.1. Likewise, ahm gained 1.8 points to finish at 43.
Medibank share price wobbles on directors retirement
In addition to the annual report, Medibank also announced the retirement of two non-executive directors of its board.
According to the release, non-exec directors Christine O'Reilly and Peter Hodgett will retire from the board on 18 November 2021. This will be at the conclusion of the annual general meeting, of which, the directors have opted not to stand for re-election.
Commenting on the news, Medibank chair Mike Wilkins said:
I would like to take this opportunity to thank both Christine and Peter for their valuable contribution to our
company during their time as directors. They both joined the Board prior to Medibank's listing on the
Australian Securities Exchange and helped guide the business through its transition from government-owned business to privatised company.
The search for two new directors is already underway.
