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The Australian Prudential Regulation Authority (APRA) has released its quarterly private health insurance (PHI) publications for the March 2022 quarter.

The publications provide industry aggregate summaries of key financial and membership statistics for the private health insurance industry.

Premium revenue grew 5. 6 per cent over the year, from a combination of membership growth and premium rate increases. Claims costs fell 2. 8 per cent over the year due to various COVID-19 imposed restrictions, particularly in the March 2022 quarter and by movements in insurers’ Deferred Claims Liabilities (DCL)1. These factors increased both gross and net margins compared to the previous year to 18. 8 per cent and 9. 2 per cent respectively.

In the year to 31 March 2022, the industry reported an increase in net profit after tax of $2. 0 billion, rising from $952 million reported in the preceding year. This increase in profitability was due to higher insurance profits partially offset by a fall in investment income. A proportion of the reported insurance profit is expected to be offset over the coming months through insurer commitments not to profit from COVID-19, such as via premium increase deferrals or other giveback means.

Investment earnings fell in the year to March 2022, with falls in returns experienced across all investment classes due to financial market volatility.

Hospital treatment membership increased by 2. 0 per cent or 224,858 persons during the year to March 2022. The longer-term ageing trend in hospital membership continued in the year with membership in the 50+ age group increasing by 2. 5 per cent or 114,384 persons whereas membership among the younger population (insured persons aged 20 to 49) increased by 1. 6 per cent or 64,634 persons during the year.

Key performance metrics for the industry in the year ended:

March 2021

March 2022

Change

(annual)

Premium revenue

$25. 2 bn

$26. 6 bn

5. 6%

Fund benefits (claims)

$22. 2 bn

$21. 6 bn

-2. 8%

Gross margin

11. 8%

18. 8%

7. 0pp

Net margin

2. 3%

9. 2%

6. 9pp

Net investment income

$645. 5 m

$207. 9 m

-67. 8%

Net profit after tax

$0. 95 bn

$2. 0 bn

107. 8%

Copies of the March 2022 quarterly publications are available on APRA’s website at: Quarterly private health insurance statistics.

Claims are benefits reported in financial statements in accordance with the relevant accounting standards, including claims incurred but not reported and claims that are processed but not yet paid which are on an accrual basis. Other benefits statistics in the Membership and Benefits, and Benefits Trends sections of this publication refer to benefits paid and reported on a cash basis. The deferred claims liability (DCL) was raised by insurers to meet the cost of procedures deferred during the pandemic.