An insurance company giving us a break on unclaimed premiums? That’s unheard of! Nope, that’s actually what Medibank (ASX: MPL) are doing with Australians having been notably more cautious through the pandemic, enabling the private health insurer to return $105 million to its customers.
The refund is part Medibank’s COVID-19 financial support package which is available to Medibank and ahm customers. It was created due to the changing nature of private health insurance during the pandemic where Australians spent significantly more time at home and subsequently resulted in fewer claims than the insurer had forecast into their pricing of policies (pre-COVID).
“Today’s announcement will return around $105 million in COVID-19 permanent claims savings back to our customers via premium relief, recognising that COVID-19 restrictions limited how our customers could use their health insurance,” said Medibank CEO, David Koczkar.
“This latest give back is the next phase of our broader Medibank financial support package and customer give back program. Today’s announcement will take Medibank’s total broader COVID-19 financial support package and give back program to $300 million so far.
“We said right from the start of the pandemic that we would not profit from COVID-19, and that we were committed to returning any COVID-19 savings back to our customers because it is the right thing to do. And today’s announcement shows that we have done what we said we would.”
Approximately 2 million policies will be eligible for the refund which will be up to $52 for extras only policies and $175 for hospital and extras policies.
With this latest return bringing the program’s total return to $300 million, it is now the largest financial support package in Medibank’s 45-year history. The Company also expects that COVID-19 will not have an impact on their FY21 operating earnings which will be announced on 25 August 2021.
For the Half-Year ended 31 December 2020, Medibank reported revenue of $2.8 billion with net profit after tax up 26.8% to $226.4 million.
“This latest phase of our package will be welcomed by our customers, some of who are still doing it incredibly tough as lockdowns continue in various locations across the country,” said Koczkar.