Medibank Claims Costs Expected to Grow Despite Uncertainty Around Catch Up Procedures

Medibank is Australia's largest private health insurer, with 1.8 million policyholders covering approximately 3.5 million people under the Medibank and ahm brands. Medibank Private was established in 1976 to bring increased competition to the private health insurance industry, with the government selling the business in 2014 via an initial public offering. The ahm business was acquired in 2009, with Medibank successfully using the brand to grow its share of younger customers. The dual brand strategy has successfully allowed the group to offer differentiated pricing and messaging to grow members and profits. Medibank has over 400,000 policyholders under the ahm brand, up from only 160,000 in 2010. In our opinion, Medibank offers steady long-term defensive earnings growth.