ASX-listed private health insurance provider to introduce more discounts and services in ongoing effort to be more customer oriented
About 150,000 Medibank young adult customers will receive a 10 per cent discount on policies this year as part of the health insurer’s ongoing quest to secure and reward customer loyalty.
The 10 per cent discount, which will apply to hospital cover customers between 18 and 29 years of age from April, was just one of the many customer-led benefits highlighted by the ASX-listed company in its half-year report released today. The discount is the direct result of the Federal Government’s Department of Health Private Health Insurance Reforms.
Medibank reported a 2.4 per cent increase in group operating profit to $293 million for the six months to 31 December, bringing group NPAT up 15.4 per cent to $207.7m.
Strong improvements in customer advocacy were front and centre in the financial report. Medibank Service Net Promoter Scores (NPS) for example, were up 8 points to +24 compared to the prior period, and ahm Service NPS also rose 5 points to +35.
Medibank also boasted of 6400 new resident policyholders since 30 June 2018, a reflection CEO, Craig Drummond, said of the success of its dual brand strategy, strong recovery as a brand and improved customer retention. This was in stark comparison with a loss of 4200 customers in the previous corresponding period.
“It is pleasing to see that by making decisions that are in the best interests of our customers, we have strengthened our company,” Drummond said. “We have had strong improvement in customer advocacy and our net promoter score. Customer NPS gap to peers and service NPS both continued their positive trajectory.”
Medibank brand preference is the highest it has been since the IPO in 2014, Drummond continued, sitting at 22.3 per cent. “Our share of ombudsman complaints remained well below market share,” he said.
“This gives us confidence we have the right strategy and team in place to grow the core business, while continuing to transform Medibank into a broader health services company.”
As part of the push to be more customer focused, Medibank said its next ambition is that every customer has at least one health interaction through the course of a year with the company by 2020. Other priorities include personalising and integrating health into customer experiences, strengthening digital member services across its two brands, maintaining brand momentum, and further automation for personalised contact and support.
Specific examples include more in-home care services for customers, higher excess options, expanded health concierge and hospital assist tools to include additional services and channels.
Another big area of focus is the ‘Priority’ customer loyalty program, which Medibank introduced in 2018 accompanied by a one-off $20m loyalty bonus. The company said ‘live better’ rewards were due in mid-year, slightly later than first planned, rewarding members for healthy choices. The loyalty program is being offered to customers who have been with the insurance provider for at least 10 years.
The latest half-year wins continue what Drummond claimed was a “substantial turnaround” in customer advocacy and retention for Medibank, first showcased through the group’s full-year 2018 financial results.
Of course it’s not all positive, and Drummond acknowledged affordability is still a big issue facing health insurance providers as a whole and that a robust public health system remains vital.
“We want a system that is more affordable, easier to use and creates greater customer value,” he said. “We are working hard without our business to achieve this, but these challenges cannot be solved by private health insurers alone.”
As a result, Drummond said Medibank is working with the Federal Government and is adopting optional reforms including the young adult discounts, higher hospital excesses and rural and regional travel allowances.
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