Medibank’s ‘back on track’ thanks to strong customer focus: CEO

ASX-listed health insurance provider aims to transform relationship with customers and deliver a more personalised and proactive experience

Medibank’s fortunes are rising thanks to a “substantial turnaround” in customer advocacy and retention, driven by consistently delivering a better customer experience, more value and recognising customer loyalty, according to CEO, Craig Drummond.

“These improvements have seen market share grow five basis points over the past six months. This is the first time in a decade we have experienced growth over a six-month period,” Drummond said in announcing the company’s full-year 2018 results. 

“This result demonstrates that our core health insurance business is back on track and in the coming year we will continue to transform our relationship with our customers and deliver a more personalised and proactive experience.”

The ASX-listed health insurance provider made the announcement as part of its 2018 full-year results presentation today. While Medibank Private reported a 1 per cent slide in full-year profit, there are signs the business is stabilising and making a solid turnaround. 

Medibank reported a group net profit after tax of $445.1 million, down 1 per cent from $449.5 million. Other highlights included a group operating profit of $548.8 million for the financial year ended 30 June, up 9.7 per cent.

Operating profit in health insurance rose 7.7 per cent to $535.6 million, backed by revenue growth of 1.2 per cent and lower costs. Other results show $5.3 billion in benefits was paid to customers and $35 million was generated in additional value to customers.

Medibank's latest progress fits nicely into its core strategy of transforming the organisation into a broader health services company, Drummond noted.

“We are now positioned for growth with a focus on leveraging our dual brands, building competitive advantage in health insurance and transforming into a broader health services company,” he said.

Related: Medibank CEO: We're getting better at customer experience

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

Customer strategy

Recapping on successful customer achievements of 2018, Medibank reported a 20 per cent year-on-year improvement in brand Net Promoter Score (NPS), and recorded better customer satisfaction. The company said it plans to continue its customer advocacy efforts and will aim to drive service and brand NPS for Medibank and ahm to be best-in-class against major private health insurance peers.

By 2020, it hopes every Medibank customer will have at least one health interaction through the year with the company. It also plans to more than double the number of customers receiving Medibank at Home services in 2019.

“We have made progress in scaling Medibank at Home, providing customers with choice over how and where their healthcare is delivered,” Drummond said.

As part of the core customer moves, Medibank outlined three key strategies and priorities for 2019. The company said it aims to deliver differentiated products and services for customers; continue to improve healthcare value for customers; and expand the offering for customers and grow the business.

As part of the effort to differentiate products and services, the company said it aims to transform its relationship with customers to a more personalised and proactive experience.

A key pillar involves recognising and rewarding customer loyalty. The Priority program - aimed at members with 10 years or more - was launched in the second half of 2018 alongside a $20 million one-off customer giveback. Drummond said customer feedback, in particular, has been very positive on the Priority program it launched this year, as well as on the rollout of the $20 million one-off loyalty bonus.

“The next step will be the launch of our Live Better loyalty offering which will reward customers for taking healthy actions.” The target launch of the program is slated for March 2019.

The company is also investing in data to help it better understand customers and personalise the experience. As an example, it’s providing healthcare services at the customer’s choice of location, including the home.

It also has several trials underway with nurses in the contact centre and nurse Web chat, to integrate health expertise across the frontline, in addition to its Health Concierge program. Health Concierge, for example, engaged with more than 13,000 customers during the financial year, including several new customer groups, the company reported.

The company also claims to be providing better information and new tools to help customers make more informed healthcare choices. In addition, there's ongoing investment in digital self-service enhancements and an increasing number of customers registered to use its digital channels (Medibank +40 per cent, ahm + 7 per cent).

Another initiative is improving transparency in a bid to improve its healthcare value. Under the plan, Medibank aims to reduce unexpected out-of-pocket costs for customers through the delivery of Medibank’s Procedure Cost Estimator.

Medibank said its interactive tool, ‘People Like You’, is helping customers understand their potential health needs and understand the common hospital procedures within their demographic, based on claims data.

It is also in consultation with hospitals around publishing Patient Reported Experience Measures Survey (PREMS) data.

Follow CMO on Twitter: @CMOAustralia, take part in the CMO conversation on LinkedIn: CMO ANZ, join us on Facebook: https://www.facebook.com/CMOAustralia, or check us out on Google+:google.com/+CmoAu 

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Show Comments

Blog Posts

Sustainability trends brands can expect in 2020

​Marketers have made strides this year in sustainability with the number of brands rallying behind the Not Business As Usual alliance for action against climate change being a sign of the times. While sustainability efforts have gained momentum this year, 2020 is shaping up to be the year brands are really held accountable for their work in this area.

Ben King

CSR manager & sustainability expert, Finder

The trouble with Scotty from Marketing

As a Marketer, the ‘Scotty from Marketing’ meme troubles me.

Natalie Robinson

Director of marketing and communications, Melbourne Polytechnic

How do we break out of our marketing echo chambers?

Clients and agencies can get stuck into a particular way of behaving and viewing the world, but there are ways to break out of our marketing echo chamber.

Steve O'Farrell

Managing Partner, The Royals

It's a good idea. Customers really should control their data. Now I understand why it's important.

Elvin Huntsberry

Salesforce CMO: Modern marketers have an obligation to give customers control of their data

Read more

Instagram changes algorithms every time you get used to them. It really pisses me off. What else pisses me off? The fact that Instagram d...

Nickwood

Instagram loses the like in Australia; industry reacts positively

Read more

I tried www.analisa.io to see my Instagram Insight

Dina Rahmawati

7 marketing technology predictions for 2016

Read more

The saying is pretty tongue in cheek. It's not saying that marketers are bad people, nor that they don't take themselves seriously. There...

LYF Solutions

The trouble with Scotty from Marketing - The CMO view - CMO Australia

Read more

Given Scotty's failed track-record in the marketing realm the memes and the ridicule is very apt and is in no way a reflection on marketi...

denysf

The trouble with Scotty from Marketing - The CMO view - CMO Australia

Read more

Latest Podcast

More podcasts

Sign in