- The insurance industry in Australia has enough plans and policies to cover health, life, businesses, property, and casualty.
- During the pandemic, the health insurance stocks have been mostly performing bullish on ASX
- Two significant healthcare insurance companies, MPL & NHF, demonstrated resilient performance, despite COVID-19 impacting their business adversely.
Healthcare, one of the largest and most complex sectors in today’s times, is grabbing everybody’s attention. Especially at a time when the world is reeling under the effects of disruptive COVID-19 pandemic, it becomes very important to take good care of health and own a health insurance plan.
The insurance industry in Australia has enough plans and policies to cover health, life, businesses, property and casualty. During the pandemic, the health insurance stocks have been mostly performing bullish on the ASX.
In this article, we will discuss two important health insurance stocks listed on the ASX.
Medibank Private Ltd
Headquartered at Melbourne, Medibank Private Ltd (ASX:MPL) is a leading health insurance provider operating at a large scale across Australia. The group is engaged in offering various health insurance plans and runs through Medibank and AHM brands. In addition, Medibank provides a wide range of health services in Australia including mental health support, preventive and better integrated primary, care and after-hours health support.
MPL performed well to grow policy holders 0.6% in FY20 amid the pandemic. This may garner confidence that MPL’s target for even 1% growth in FY21 is achievable. Also, an anticipated premium increase is expected to strengthen earnings in 2021. The company intends to achieve A$20 million in productivity savings in FY21 and an extra A$30 million in FY22-FY23.
Meanwhile, Medibank has been in news since last week for a different reason. The Catholic Not For Profit Calvary is teaming up with the private health insurer Medibank to deliver a new programme designed specially to provide medical care at home, as a complete substitute to hospital admission in South Australia.
To be about to start this year end, the programme is named – My Home Hospital and will be available for needy patients 24 hours a day, all days of the week. Patients can be referred to this programme via their practitioners, hospital’s emergency department or even from their aged care facility. Participant patients will be appointed a care coordinator who will be working with them and their families or carers and chart down a treatment plan along with the clinical support provided both one-to-one and even virtual care centre.
This particular agenda is being pushed by Wellbeing SA, the State Government’s health and wellbeing agency. As per the agency, with this plan, the percentage of existing health services getting delivered by hospitals at home can be increased from 1.3% to straight 5%.
Medibank – which has more than 3.7 million consumers – already works with the SA Government’s Community Care Programme through local business Home Support Services.
It should be noted that the Medibank’s share price has climbed 10% in five years. MPL closed at A$2.670 on 27 October 2020, with a market capitalisation of A$7.40 billion.
NIB Holdings Limited
NIB Holdings Limited (ASX:NHF) is a health insurance company providing medical insurance to the residents of Australia and New Zealand. Workers and international students in Australia are also benefitted through NIB. The company, in addition, provides international level medical insurance services to those travelling and working overseas.
With the launch of chatbots to assist customers, NIB became the first insurance company to introduce artificial intelligence in private health insurance in Australia. Also, NIB’s portfolio features insuring travel through World’s Nomad Group. Its travel insurance plan gives cover for overseas medical and dental; medical evacuation; passport and travel documents; lost and stolen luggage among many other things.
Taking on the Covid-19 challenge, NIB in March, had rolled out a member and community support package which contains increased coverage for lung, bladder, chest, kidney or other Covid-19 related treatment across all levels of hospital at no extra cost.
NIB Holdings released its 2020 annual report for the year ended 30 June 2020 according to which NIB group, revenue grew by 3.4% to A$2.5 billion. Net profit after tax however, dropped 40% to $89.2 million. Covid-19 had vital negative impact on the company’s international students and travelers, a major disturbance to nib travel operations.
It should be noted that the NIB’s share price has climbed 15% in five years. The stock closed at A$4.300 on 27 October 2020, with a market capitalisation of A$1.98 billion.