In morning trade the NIB Holdings Limited (ASX: NHF) share price has dropped lower following the announcement of its 2020 premium increases.
At the time of writing the private health insurer's shares are down almost 1% to $6.62.
What did nib announce?
This morning nib revealed that the Federal Minister for Health has given it approval to increase its health insurance premiums by an average of 2.9% across all products. These changes are effective from April 1 2020.
This is the sixth year running that that nib has delivered a premium change lower than the previous year. It is also the lowest premium increase in 17 years.
A commitment to affordability.
The health insurance giant's managing director, Mark Fitzgibbon, revealed that the company is committed to keeping health insurance affordable for its members.
He said: "We are very mindful of the growing concerns from consumers regarding the value and affordability of private health insurance which is why we've worked extremely hard to deliver the lowest premium change in 17 years."
"Still, the reality for both private health insurance, and the healthcare industry as a whole including government who fund the lion's share of our nation's healthcare, is that the cost and frequency of medical treatment is rising."
"While this means consumers are receiving the treatment they need for sickness or injury, it does place pressure on claims costs. In the last financial year alone, we paid out a record $1.7 billion in claims on behalf of our Australian resident members, with our largest single claim in excess of $310,000," he explained.
Medibank premiums.
The average premium increase announced by nib is lower than the one revealed by its rival Medibank Private Ltd (ASX: MPL) today.
This morning Medibank revealed that the Federal Minister for Health has given it approval to increase its Medibank and ahm health insurance premiums by an average of 3.27% from April 1 2020.
This is its lowest average premium increase in 19 years. Medibank's shares are up 0.5% to $3.23 at the time of writing.
