Health insurance profits up over 18%
Consumers are paying more for cover as private health funds rake in the dough.
Private health funds in Australia have made $1.3 billion in profits in the year to March, an increase of roughly 18% year-on-year, according to the latest figures from the Australian Prudential Regulation Authority (APRA).
These profits come off the back of seemingly endless health insurance premium hikes. Premiums went up by an industry weighted average increase of 4.48% in 2017, and have risen by almost 40% since 2011.
This is the fourth time in the last seven years that the private health insurance industry has experienced year-on-year net profit growth (after tax) in the double digits.
Since 2011, total assets for private health insurers have risen by 40.33% and their net profit after tax is up by 39.01%.
|Year||Industry weighted average||Total assets*||YoY growth||Net profit after tax*||YoY growth|
*All figures $'000
Premium revenue was also up, rising from roughly $22 billion in March 2016 to roughly $23.5 billion in 2017, as increase of 5.0%. This all coincides with weak wage growth, with the latest figures showing that seasonally adjusted Wage Price Index (WPI) rose by just 1.9 per cent over the last 12 months.
All this combined means a perfect storm for health funds. The most recent Private Health Insurance Ombudsman (PHIO) State of the Health Funds 2015-16 report found that complaints to the PHIO rose for the third straight year.
This follows a study from earlier this which found that Australians are fed up with constant premiums hikes and more than one quarter would have left their health fund if premiums had gone up by more than 5%.