The pace of change in Australia’s private medical
insurance industry quickened in August with the announcement by
private health insurer MBF Australia that, subject to policyholder
approval, it plans to demutualise and seek a listing on the
Australian Securities Exchange. MBF’s move follows a similar
decision in July by another Australian private health insurer, NIB
Health Funds, to go the demutualisation and listing route.
MBF, the country’s largest non-government health
insurer, has 800,000 members, giving it a market share of about 8
percent. NIB Health Funds is the sixth largest and has 640,000
members. In addition to health insurance, MBF offers life and
travel insurance and financial planning services through its
ClearView Retirement Solutions unit. In the year ended 30 June
2006, MBF reported a pre-tax profit of A$187 million ($154
million).
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Commenting on the decision, MBF chairman John Conde said: “The
board believes demutualising is in the best interests of
policy-holders; our current structure has served us well but limits
our ability to access capital and grow to achieve our full
potential.”
Proposed merger
UK health insurer BUPA has confirmed that its Australian unit, BUPA
Australia, had entered into initial discussions relating to a
potential merger with MBF. “Together, MBF and BUPA Australia would
create the country’s leading health fund, which would be in a
stronger position to hold down premiums, whilst providing greater
efficiencies and improved services for members, “said BUPA
Australia’s MD, Richard Bowden.
BUPA Australia, which is branded Mutual Community in South
Australia and Northern Territory and HBA in Victoria and New South
Wales, has more than 1 million members, giving it a market share of
about 10 percent. The majority of BUPA Australia’s members are in
Victoria (550,000) and in South Australia (351,000).
A merger of BUPA Australia and MBF would create a company rivalling
in size the country’s largest health insurer, government-owned
Medibank Private. Medibank, which is set to be privatised in due
course, has about 3 million members and a market share of about 30
percent.
BUPA Australia is now seeking the necessary regulatory approvals
for its proposal and will re-initiate discussions with MBF once
these approvals have been progressed.
