APRA releases quarterly private health insurance statistics for December 2021
The Australian Prudential Regulation Authority (APRA) has released its quarterly private health insurance (PHI) publications for the December 2021 quarter.
The publications provide industry aggregate summaries of key financial and membership statistics for the private health insurance industry.
In the year to 31 December 2021, the industry reported a profit of $1.8 billion, an improvement from the $558.8 million reported in the preceding year. The increase in profitability in the year to December 2021 was driven by recovery in insurance profits and investment income following the weak margins and investment returns during the height of the pandemic in 2020.
Premium revenue grew 5.8 per cent over the year, from a combination of membership growth and premium rate increases. Claims growth fell due to various COVID-19 restrictions imposed across Australia throughout the year as well as being impacted by movements in insurers’ Deferred Claims Liabilities (DCL)1. As a result of these factors, gross and net margins increased in comparison to the prior year to 17.2 per cent and 7.7 per cent respectively.
Investment earnings increased in the year to December 2021 due primarily to strong returns on equities investments.
Hospital treatment membership increased by 228,506 persons during the year to 31 December 2021. The longer-term ageing trend in hospital membership continued in the year with membership in the 50+ age group increasing by 119,425 persons whereas membership among the younger population (insured persons aged 20 to 49) increased by 61,372 persons during the year.
Key performance metrics for the industry in the year ended:
| December 2020 | December 2021 | Change (annual) |
Premium revenue | $25.0 bn | $26.4 bn | 5.8% |
Fund benefits (claims) | $22.1 bn | $21.9 bn | -1.2% |
Gross margin | 11.3% | 17.2% | 5.9pp |
Net margin | 1.9% | 7.7% | 5.8pp |
Net investment income | $270.2 m | $448.6 m | 66.1% |
Net profit after tax | $558.8 m | $1.8 bn | 229.3% |
Copies of the December 2021 quarterly publications are available on APRA’s website at: Quarterly private health insurance statistics.
Footnote
1 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.
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The Australian Prudential Regulation Authority (APRA) is the prudential regulator of the financial services industry. It oversees banks, mutuals, general insurance and reinsurance companies, life insurance, private health insurers, friendly societies, and most members of the superannuation industry. APRA currently supervises institutions holding around $9 trillion in assets for Australian depositors, policyholders and superannuation fund members.