Medibank chief shrugs off sale talk
He said Medibank had been living with speculation about its ownership for years and was instead focused on challenging market conditions, such as the growth of insurance comparison sites and member downgrades and dropoffs as government income-testing of private health insurance bites.
"We don't sit around waiting for somebody to say who should own the shares," Mr Savvides said. "It's just part of the journey of being a government business enterprise."
While Labor does not support a sale, the Coalition recently reaffirmed its support for one. The Greens have said they would consider a sale if the proceeds were directed at the public health sector.
Medibank's 2012 annual report flagged that it would pay the government a special dividend of $300 million, on top of a $91 million ordinary dividend. If Medibank's board approves the proposed special dividend, this will mean the government has extracted $850.6 million in surplus capital from Medibank since it converted to "for-profit" status in 2009.
Medibank's net profit slumped 57 per cent to $126.6 million in the 2012 financial year, due to higher claims costs and a sharp fall in investment income. But revenue reached a record high for a second year running - $5.4 billion.
Medibank has 4500 employees and 3.7 million customers, or more than a quarter of the market. Next is Bupa Australia, with 3.5 million members.
Mr Savvides' comments follow remarks by Medibank's former chairman, Paul McClintock, that the government's ownership is an "aberration".
Bupa's chief executive for Australia and New Zealand, Dean Holden, was quoted as saying that "to make Medibank a true competitor in the open market is a very positive thing".
NIB has described the privatisation of Medibank as "inevitable" and tipped the private health insurance system to grow by 3 per cent to 3.5 per cent a year, with government measures having only a "moderate impact".
Frequently Asked Questions about this Article…
Medibank managing director George Savvides said the company has lived with ownership speculation for years but is focused on running the business. He highlighted that management isn’t waiting around over who should own the shares and is concentrating on dealing with challenging market conditions instead.
According to the article, Labor does not support a sale of Medibank, the Coalition has reaffirmed its support for privatisation, and the Greens say they would consider a sale only if the proceeds were directed to the public health sector.
Medibank’s net profit fell 57% to $126.6 million in 2012, mainly due to higher claims costs and a sharp fall in investment income. Despite the profit slump, revenue hit a record $5.4 billion for a second consecutive year.
Medibank’s 2012 annual report flagged a proposed special dividend of $300 million on top of a $91 million ordinary dividend. If the board approves the special dividend, the report says the government will have extracted $850.6 million in surplus capital from Medibank since it became a for‑profit entity in 2009.
The article states Medibank has about 4,500 employees and 3.7 million customers—more than a quarter of the private health insurance market. The next largest is Bupa Australia with about 3.5 million members.
Bupa Australia’s CEO for ANZ, Dean Holden, said making Medibank a true competitor in an open market would be very positive. NIB described Medibank privatisation as "inevitable" and forecast the private health insurance system could grow about 3% to 3.5% a year, with government measures having only a moderate impact.
The article highlights several headwinds: the growth of insurance comparison sites, member downgrades and drop‑offs linked to government income‑testing of private health insurance, and broader challenging market conditions that management says it is addressing.
Yes. The Greens said they would consider a sale of Medibank only if the proceeds were directed toward the public health sector. Other parties have differing positions, but no sale terms were finalised in the article.
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