APRA releases quarterly private health insurance statistics for March 2021

The Australian Prudential Regulation Authority (APRA) has released its quarterly private health insurance (PHI) publications for the March 2021 quarter.

The publications provide industry aggregate summaries of key financial and membership statistics for the private health insurance industry.

Year to March 2021

The PHI industry reported a small decline in net profits after tax in the year ending March 2021. Net margins fell 1.6 percentage points during the year, mainly due to the deferral of the April 2020 premium increases and other concessions provided to policyholders in response to the COVID-19 pandemic. The industry reported higher investment earnings in the year to 31 March 2021, following the COVID-19 induced shock to investment markets in the March quarter 2020.

Total hospital treatment membership increased by 170,219 persons during the year to 31 March 2021. However, the longer term ageing demographic trend in hospital membership continued, with membership in the 50+ age group increasing by 97,291 persons. These longer-term trends have been contributing to increasing average claims per policy as older age groups generally claim more than the younger population.

Key performance statistics for the industry in the year ended:

March 2020

March 2021

Change (annual)

Premium revenue

$25.0 bn

$25.2 bn

0.7%

Fund benefits (claims)

$21.7 bn

$22.2 bn

2.1%

Gross margin

13.0%

11.8%

-1.2pp

Net margin

4.0%

2.3%

-1.6pp

Net investment income

$94.7 m

$645.5 m

581.4%

Net profit after tax

$973.1 m

$951.5 m

-2.2%

March 2021 Quarter

The industry reported higher insurance profits in the March quarter 2021, with fund benefits (claims) falling at a higher rate than premium revenue. The insurance result was largely offset by lower investment income, and this resulted in the industry reporting a 1.1 per cent decrease in net profits after tax in the quarter.

The number of hospital episodes declined in the quarter and remain below pre-COVID levels while the number of ancillary services at the end of March 2021 remained slightly above pre-COVID levels.

The quarterly fall in investment income was due to lower returns on interest bearing investments.

Key performance statistics for the industry in the quarter:

December 2020

March 2021

Change (quarterly)

Premium revenue

$6.5 bn

$6.4 bn

-0.8%

Fund benefits (claims)

$5.7 bn

$5.4 bn

-4.2%

Gross margin

12.0%

15.0%

3.0pp

Net margin

3.0%

5.9%

2.9pp

Net investment income

$220.6 m

$86.5 m

-60.8%

Net profit after tax

$342.4 m

$338.8 m

-1.1%

Copies of the March 2021 quarterly publications are available on APRA’s website at: Quarterly private health insurance statistics.

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