“We made a commitment”: Medibank returns $200m in cash-backs to customers

“We made a commitment”: Medibank returns $200m in cash-backs to customers

Health insurer Medibank (ASX: MPL) has announced it will return a further $215 million to its customers as part of its COVID-19 support package, bringing the total amount of financial give back since the start of the pandemic to $1.37 billion.

Customers will receive funds through a $200 million cash-back which will be deposited into their bank account within the next seven months. The range allocated to customers will vary, with some set to receive the minimum $50 while others may get up to $260, depending on the level of coverage they have.

Medibank said that on average, extras-only policyholders will get around $55, while customers with hospital and extras are set to receive roughly $165.

For the third year in a row, ahm customers will also be given an additional 12 months to use their unused extras limits, which is valued at up to $15 million.

“We made a commitment in 2020 that we would not profit from COVID-19, and we’ve stuck by that promise. While COVID restrictions have eased, claims have been lower than expected, which is why we are announcing a further $215 million will be returned to customers,” Medibank chief customer officer Milosh Milisavljevic said.

“This will bring the total amount of support Medibank has provided to customers to $1.37 billion through our COVID-19 give back program, which is the largest give back of any Australian health insurer.

“At a time when household budgets are under pressure, we hope this extra cash in our customers’ pockets will be welcome news.”

The group also recently announced to shareholders that it had doubled its net profit to $343.2 million, but noted this was significantly impacted by the adoption of AASB 17 insurance contracts. The change in accounting methods increased statutory net profit for the first half of FY24 by $80.7 million due to the timing and value of COVID-19 claims savings and give-backs.

Underlying net profit also rose by 16.3 per cent to $262.5 million, while revenue was up 3.3 per cent to hit $4.02 billion. Medibank’s main health insurance segment made an operating profit of $317 million, reflecting a 4.3 per cent rise.

The Medibank Health division also jumped by 8.5 per cent to $26.7 million.

“Our Health Insurance business has remained resilient despite the challenging economic conditions. We delivered a strong performance in Medibank Health and made some substantial steps in our expansion in health,” Medibank CEO David Koczkar said.

“In our resident business, net resident policyholders grew by 3,400. This growth was driven by families and those taking out cover for the first time.

“By making disciplined choices in how and where we grow, we remain focused on achieving sustainable growth for the long term. This includes continuing to strengthen our business through our IT security uplift program.”

The company also reported that cybercrime costs related to the 2022 hack which saw the personal data of 9.7 million Medibank and ahm customers stolen came to $17.6 million - a 32.8 per cent fall.

Medibank anticipates full-year costs relating to the cybercrime will land between $30 million to $35 million, but this amount does not include any potential findings from regulatory investigations or legal disputes.

The group is facing lawsuits from Quinn Emanuel Urquhart & SullivanBaker McKenzie, and a joint complaint from Maurice Blackburn Lawyers, Bannister Law Class Actions and Centennial Lawyers.

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