Medibank Private Limited

Group operating profit increased 6% to $381.7 million, and underlying EPS was $0.108 per share, in line with last year. In health insurance, gross profit rose 4.4% on 4.3% revenue growth, with gross margin stable at 16.2%; operating profit increased 3.5% to $361.5 million, and operating margin remained 8.5%. Resident claims expense increased 4.9%, resident claims growth per policy unit increased 20 basis points to 2.5%, and nonresident gross profit increased 6.9% to $55.6 million with gross margin up to 35.6%. Medibank Health segment profit increased 28.5% to $48.3 million on 27.5% revenue growth. For FY26, management expects resident claims growth per policy unit of 2.6% to 2.9%, health insurance expenses of $690 million to $695 million, nonrecurring cyber costs of around $35 million, and Medibank Health organic operating profit growth in 2H to be similar to 1H plus about $6 million from Better Medical. They also said the resident outlook and nonresident outlook are unchanged.

David Koczkar framed the quarter as another good result, pointing to improving customer engagement, stronger health insurance momentum, and continued growth in Medibank Health. He emphasized Medibank’s role in driving the health transition through primary care, virtual care, and partnerships with hospitals, saying the company is investing to change how care is delivered rather than waiting for system-wide reform. His tone was confident and persistent, with repeated references to resilience, strong customer relationships, and a clear vision through FY26 and toward 2030.

Mark Rogers said the group delivered balanced growth and reinvestment, with operating profit up 6% to $381.7 million and underlying EPS of $0.108. He highlighted stable resident gross margin at 16.2%, resident operating margin at 8.5%, Medibank Health margin of 17.7%, and the capital position at 1.9x PCA and a 13.8% capital ratio of premium revenue. He also noted Better Medical acquisition funding through unallocated capital, the interim dividend of $0.083 per share, expected FY26 cyber costs of around $35 million, and FY26 health insurance expenses of $690 million to $695 million including $10 million of productivity savings.

Analysts focused on claims inflation, the 5.1% premium increase, revenue mix/downgrading, and whether lower utilization and mix benefits can persist into FY27. Management said the bridge from cash claims to premium increase is mainly the 150 basis point revenue mix impact, and they linked the FY27-versus-FY26 claims difference mainly to the unwind of the COVID tailwind and the fully embedded New South Wales private room rate cost, which together they said are about 80 basis points. Questions also covered aggregators, hospital partnership payments, risk equalization, and capital deployment; management said aggregators affect only ahm, that hospital partnership payments are growing and cover over 80% of benefit outlays, that they expect to remain a modest receiver on risk equalization, and that future capital is likely to go first into primary care but could eventually support broader health investments or even consolidation.