The Australian Prudential Regulation Authority (APRA) has released its quarterly private health insurance statistical publication for the March 2020 quarter, which provides an industry aggregate summary of key financial and membership statistics for the private health insurance industry.
Key takeaways from the publication include the impact of COVID-19 – leading to a sharp decline in equity markets and driving significant investment losses in the March quarter of this year. This resulted in negative profits this quarter and a consequent fall in industry profitability in the year ending March 2020.
However, insurance margins improved slightly in the March quarter of 2020, with fund benefits falling at a faster rate than premiums. This quarterly outcome differs to the recent trends in insurance margins which declined over the 12 months to March 2020 with growth in fund benefits (claims) exceeding growth in premium revenue.
Additional key performance statistics for the industry in the quarter revealed premium revenue dropped 1.59% from $6.30 billion in December 2019 to $6.20 billion in March 2020. Net investment income also declined a staggering 450.65% from $82.36 million last December to -$288.78 million in March 2020.
Fund benefits (claims) also fell by 2.42% from $5.46 billion last December to $5.33 billion this March, with net profit after tax also taking the fall with a 114.54% from $371.01 million to -$53.93 million.
