Medibank (ASX:MPL) share price slips as customers hit 3.7 million

What's moving the Medibank share price today?

| More on:
A man sitting at his dining table looks at his laptop and ponders the CSL balance sheet and the value of CSL shares today

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Medibank Private Ltd (ASX: MPL) share price is moving higher this morning. This follows the release of the private health insurers' annual report for 2021.

While the financial results had already been shared with investors back on 25 August 2021, today's release comes with some added details and commentary.

At the time of writing, the Medibank Private share price is down 0.28% to $3.55 in early trade.

Let's dive into the report.

More customers getting more back

To kick things off, the report opens with an elating one-liner, stating "We grew more in the past 12 months than we have in over 10 years." Such a statement could have investors jumping for joy.

Although the exact metric being measured isn't specified, we know that it's not pertaining to the company's net earnings after tax. In FY21, Medibank's group net profit after tax increased 39.8% to $441.2 million. We only need to go back to FY16 to see earnings grow more than this. For reference, FY16 witnessed the bottom line climb 46% to $417.6 million.

Additionally, customer numbers across the Medibank and ahm brands have slipped since 2016 as well. According to its annual report at the time, the company served 3.8 million customers. Meanwhile, the company counts 3.7 million people as customers — a reduction of nearly 3%. This might be weighing on the Medibank Private share price this morning.

However, what has increased is the amount of money paid in claims to customers. For the recent financial year, Medibank coughed up $5.6 billion in claims, increasing 2% from the prior year. In fact, the company's COVID financial support package for customers was the largest in its 45-year history.

To date, Medibank has provided $300 million, with $103 million in COVID permanent net claims savings being returned in premium relief. Adding to this, CEO David Koczkar said, "We stand by our commitment not to profit from COVID and will continue to return any related permanent net claims savings to our customers."

This act of returning some of the premiums paid by customers was in recognition of the impact COVID has had on people's ability to use their health insurance.

It appears premium return helped bolster the company's brand among customers. In the year, Medibank customer advocacy rose 5.3 points to 37.1. Likewise, ahm gained 1.8 points to finish at 43.

Medibank share price wobbles on directors retirement

In addition to the annual report, Medibank also announced the retirement of two non-executive directors of its board.

According to the release, non-exec directors Christine O'Reilly and Peter Hodgett will retire from the board on 18 November 2021. This will be at the conclusion of the annual general meeting, of which, the directors have opted not to stand for re-election.

Commenting on the news, Medibank chair Mike Wilkins said:

I would like to take this opportunity to thank both Christine and Peter for their valuable contribution to our
company during their time as directors. They both joined the Board prior to Medibank's listing on the
Australian Securities Exchange and helped guide the business through its transition from government-owned business to privatised company.

The search for two new directors is already underway.

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Healthcare Shares

Stethoscope with a piggy bank in the middle.
Broker Notes

Australian health insurance: Does Macquarie prefer Medibank or NIB shares?

Medibank and NIB shares have both surged in 2025. Here’s what Macquarie expects now.

Read more »

Two brokers analysing stocks.
Healthcare Shares

Why does Macquarie think Fisher & Paykel shares are a buy?

Fisher & Paykel Healthcare Corporation Ltd (ASX: FPH) shares have been on form over the past 12 months. During this…

Read more »

Overjoyed man celebrating success with yes gesture after getting some good news on mobile.
Healthcare Shares

Which small cap ASX share is jumping 10% on strong results

Investors have been bidding this stock higher today. But why?

Read more »

Cropped shot of an attractive young female scientist working on her computer in the laboratory.
Healthcare Shares

Why Macquarie forecasts 30-50% upside for these ASX All Ords healthcare stocks

Macquarie updated its target price on these three ASX All Ords healthcare stocks.

Read more »

A woman jumps for joy with a rocket drawn on the wall behind her.
Healthcare Shares

Guess which ASX 200 stock is jumping 10% on big news

This stock is catching the eye with a strong gain on Thursday. But why?

Read more »

a young woman holds her hand to her ear and leans sideways as if to listen to something that's surprising her as her eyes and her mouth are wide open.
Healthcare Shares

Down 15% since January, are Cochlear shares now a buy?

Let's see what analysts are saying about this blue chip.

Read more »

Green arrow with green stock prices symbolising a rising share price.
Healthcare Shares

Guess which popular ASX 200 stock is up nearly 60% in less than 2 months?

Investors who bought this ASX 200 stock in the recent dip have been strongly rewarded.

Read more »

A senior pharmacist talks to a customer at the counter in a shop.
Healthcare Shares

Are Sigma Healthcare shares a good buy now after the merger with Chemist Warehouse?

Sigma Healthcare shares have soared 154% in 12 months. Can this stellar run continue?

Read more »