Medibank to give back $20m to customers and launch new loyalty program

ASX-listed health insurance provider is launching a new customer loyalty program for long-standing members

Medibank will give $20 million back to customers as part of a one-off loyalty bonus coinciding with the launch of its new Priority program for long-standing members.

The health insurance provider made the announcement as part of its half-year financial results presentation today. Medibank reported a net profit of $245.6 million for the half-year to 31 December 2017, up 5.9 per cent year-on-year off total revenue of $3.47 billion. Other highlights included an increase in operating profit to $277.3 million, premium revenue growth of 1.8 per cent and adjusted health insurance profit of $243.5 million.

Medibank CEO, Craig Drummond, attributed the “solid” result to business changes made over the past 18 months as well as initial benefits from its productivity program. Like many of its competitors, the company has been working to take a more customer-centric position on its products and services, which Drummond said was starting to pay off.

According to its financial report, service NPS improved on the Medibank brand to +15.6, and +30.4 on the ahm sub brand.

“Today’s result reflects the progress we have made in delivering our customers a better experience, better service, better products and more value,” he said. “This half, we have paid $2.6 billion in claims on behalf of our customers, supporting them with their health and well-being.”

Read more: Medibank CEO: We're getting better at customer experience

As part of these ongoing efforts, Medibank will launch a Priority program for customers who have been with the insurance provider for at least 10 years. Drummond said the focus is on formally recognising and thanking these more loyal members with benefits such as a dedicated service line, health professionals supporting them when they go to hospital, and partner-only offers.

In line with the launch, Medibank will also give $20m in a one-off loyalty bonus to customers in June this year, starting with Priority customers.

“This means customers who have been with us for more than 10 years and have hospital and extras cover, will be able to put the bonus towards increasing their extras limits or seeing a physiotherapist,” Drummond said.

The offer is also a nod to the concerns Australians have about ever-rising private health insurance premiums and the affordability of such cover.

“We have just delivered our lowest premium increase in 17 years because of the work we have done to cut our own costs and because we passed on 100 per cent of savings from prostheses reforms,” Drummond claimed, adding management expenses were down 1.9 per cent this year.

“There is urgency for further structural reform to the health system to maintain the downward pressure on health costs and premiums and we are looking forward to working with the committees established by the federal Government into our-of-pocket costs and low-value care.

“Improving affordability remains a key focus and we need to keep working even harder to deliver on this promise for our customers.”

Initiatives for FY18 will include targeting 250,000 proactive customer interactions, expanding health concierge services for health pathway guidance, and quarterly activity statements for 1 million Medibank and ahm customers with extras limits and health reminders.

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