Health insurer nib’s yearly profit has taken a hit as Australians claim more for hospital stays, day surgery and dental work.
But the company says a likely change in government could provide a boost to the private health sector.
Australia’s only listed health insurer made a net profit of $67.2 million in the 2012/13 financial year, down slightly from $67.6 million in the previous year.
The company said its bottom line had suffered because its customers were claiming more, while it also had to pay one-off costs from its acquisition of TOWER Medical Insurance in New Zealand.
nib’s key Australian residential health insurance business paid out $863 million in claims in 2012/13, up more than 11 per cent from the previous year, putting greater pressure on its margins.
It attributed the rise in claims to the expansion of private hospitals in key markets, increased use of day hospital stays and more dental claims.
“Claims inflation is easily the biggest challenge for us as an industry,” nib managing director Mark Fitzgibbon said.
The company is working to expand into other insurance markets, such as travel and life insurance, to offset the growth in medical claims, he said.
A change of government at the September 7 election could be in the company’s interests, Mr Fitzgibbon said.
“Our assessment is that the Liberal/National Party are more likely to believe in markets to solve some of the enormous challenges facing health care,” he said.
Opposition leader Tony Abbott has previously indicated the coalition would remove the means test on the private health insurance rebate, which could increase demand for health insurance.
But Mr Fitzgibbon said the industry had to prepare for a decline in government subsidisation over the longer term.
“It’s a positive thing for government to be saying …`we expect individuals and their various funding mechanisms to take greater responsibility for funding out health care’,” he said.
“It ultimately takes us to a place where we are more relevant to the system and we generate more revenue because we fund more of the private health care system.”
Mr Fitzgibbon said he also believed an Abbott government would be more likely to privatise Medibank Private than Labor.
nib shares were up one cent at $2.14 at 1428 AEST.
