Medibank Private Ltd. posted a 2.9% increase in underlying net profit after tax to A$636.8 million for the 2026 financial year, as its health services division surged 31.3% to A$100.7 million. The insurer’s shares fell 7.95% to A$4.63 following the results presentation on August 19, 2026, extending declines from a 52-week high of A$5.31.
Group operating profit rose 6.7% to A$813.5 million, supported by a 5.9% increase in revenue to A$9.12 billion. Underlying earnings per share climbed 2.9% to 23.1 cents, while the fully franked dividend was lifted 6.7% to 19.2 cents per share, maintaining an 83% payout ratio.
The core health insurance business delivered a 3.8% rise in operating profit to A$769.8 million, with gross margins steady at 17.0% and expense ratios unchanged at 8.0%. Policyholder growth slowed to 1.1% overall, with Medibank’s ahm brand expanding 2.4% compared to a 0.6% gain for the main brand. Direct channel sales accounted for 81% of new policies in the second half, up from 74% in the first half.
Medibank Health, the insurer’s growth engine, reported a 31.3% jump in segment profit to A$100.7 million, alongside a 30.8% revenue increase to A$634.8 million. The division’s operating margin compressed to 16.9% due to a A$10 million investment in growth initiatives. Live Better membership grew 11.6% to 1.04 million, with rewards claimed rising 48% to A$49 million. GP consultations climbed 26.7% to 4.13 million, while acute home health admissions increased 13.7% to 27,400, freeing capacity equivalent to 194,000 hospital bed days.
Non-resident health insurance policy units declined 2.3% to 346,200, though gross profit remained flat at A$110.3 million. FY26 hospital claims included a non-recurring A$74.8 million COVID-19 utilization benefit, which management noted would unwind in FY27, adding approximately 150 basis points to hospital claims growth per policy unit.
Net investment income fell 13.9% to A$178.9 million, reflecting a decline in fund portfolio returns to 5.71% from 6.38%. The insurer’s capital position strengthened, with the prescribed capital amount coverage ratio improving to 1.9 times, though unallocated capital decreased by A$69 million to A$182.9 million, partly due to the A$163.5 million acquisition of Better Medical.
For FY27, Medibank guided for broadly stable resident private health insurance gross margins and a A$10 million productivity savings target. Expenses are expected to grow 5.4%, while cybercrime costs are projected to fall below A$20 million, down from A$34.9 million in FY26.
