Shares in Medibank Private Ltd (ASX: MPL) recovered from a poor start this morning following news the company will be returning around $105 million to its customers.
At the time of writing, the Medibank share price is $3.16 – 0.48% higher than its previous close.
For comparison, the S&P/ASX 200 Index (ASX: XJO) is down 0.67% right now.
Let's take a look at today's news from the healthcare and health insurance company.
Image source: Getty Images
Medibank's COVID-19 support
Medibank has announced it will be returning $105 million in COVID-19 net claims savings. Around 2 million of its customers will be eligible for the give back.
Medibank customers with extras-only policies will receive up to $52, while those holding hospital and extras policies could get $175.
It will also be postponing premium increases for 6 months.
Additionally, ahm customer extra limits will be extended by a year as many customers couldn't use their extras during COVID-19 lockdowns.
The give back will be funded through a partial release of the savings Medibank made when customers were forced to defer their claims because of COVID-19.
Australian Medibank and ahm customers who held policies between 1 July 2020 and 30 June 2021 are eligible for the support. Most customers will receive the financial support by the end of September.
The company has now handed out $300 million worth of COVID-19 support.
Medibank doesn't expect COVID-19 to impact its operating earnings for the 2021 financial year.
Commentary from management
Medibank's CEO David Koczkar said of the company's financial support package:
We've been there for our customers to help them navigate through this challenging time, and this give back is just another example of how we are supporting our customers…
We said right from the start of the pandemic that we would not profit from COVID-19, and that we were committed to returning any COVID-19 savings back to our customers because it is the right thing to do. And today's announcement shows that we have done what we said we would.
Medibank Private share price snapshot
Lately, the Medibank share price has been performing well on the ASX. It's currently 4% higher than it was at the start of 2021. It has also gained 7% since this time last year.
The company has a market capitalisation of around $8.6 billion, with approximately 2.7 billion shares outstanding.
