Australia private health insurance net profit surges by 107.8% in Q1
In the year to 31 March 2022, net profit after tax reached $1.42b.
Australia’s private health insurance industry net profit after tax grew by 107.8% to $1.42b in the first quarter of 2022 compared to $950m in the same quarter last year.
According to data released by Australian Prudential Regulation Authority (APRA), the leap in net profits was mainly attributable to higher insurance profits for the quarter, offset by a fall in investment income.
Premium revenue grew 5.6% over the year, from a combination of membership growth and premium rate increases. Claims costs fell by 2.8% over the year due to various COVID-19 imposed restrictions, particularly in the March 2022 quarter and by movements in insurers’ Deferred Claims Liabilities (DCL). These 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.
These factors increased both gross and net margins compared to the previous year to 18.8% and 9.2%, respectively.
Meanwhile, investment earnings fell in the year to March 2022, with falls in returns experienced across all investment classes due to financial market volatility.
Hospital treatment membership increased by 2% or 224,858 persons during the year to March 2022. The longer-term ageing trend in hospital membership continued in the year with membership in the 50+ age group increasing by 2.5% or 114,384 persons whereas membership amongst the younger population (insured persons aged 20 to 49) increased by 1.6% or 64,634 persons during the year.
“A proportion of the reported insurance profit is expected to be offset over the coming months through insurer commitments not to profit from COVID-19, such as via premium increase deferrals or other giveback means,” APRA said.
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