Medibank Private chief ready to sell
Speaking at the first Senate estimates hearing since the Coalition announced steps to sell Medibank, Mr Savvides confirmed the business had paid $1 billion in dividends to the government since it converted to profit several years ago.
Medibank, Australia's biggest private health insurer, was "busy and working well", he said.
"The issue around competition, if you look at the other funds, NIB floated on the ASX and its behaviour seems to be of a health fund that's dealing with competitive tension ... the Bupa organisation, through a series of acquisitions, is comparable to the size of Medibank," Mr Savvides said. "Other privatisations, like the Commonwealth Bank and others ... go on to be both competitive and successful."
It has long been Coalition policy to privatise Medibank Private. But a sale was seen as controversial given Medibank's capital base is almost entirely built on taxpayer contributions and previous demutualisations have rewarded members.
Mr Savvides said Medibank's 2013 profit of $315 million, up 60 per cent on the previous year, had been driven by cost-cutting and improvements in investment income.
However, he said, people were searching for cheaper products - in response to moves by the former government to reduce taxpayer support for private health insurance - and claims were growing faster than premiums.
Advisers for the long-mooted sale will be appointed by the end of November, senators were told, and a scoping study will be completed by the 2014 budget.
Frequently Asked Questions about this Article…
Medibank Private is being prepared for sale as part of the Coalition's long-standing policy to privatize the company. Despite challenges in its core private health division, the managing director, George Savvides, believes the company is ready for sale.
Medibank Private reported a profit of $315 million in 2013, which was a 60% increase from the previous year. This growth was attributed to cost-cutting measures and improvements in investment income.
The sale of Medibank Private is controversial because its capital base is largely built on taxpayer contributions. Additionally, previous demutualizations have rewarded members, raising concerns about the implications of privatization.
Medibank Private is Australia's largest private health insurer. It faces competition from other funds like NIB, which is publicly traded, and Bupa, which has grown through acquisitions to a size comparable to Medibank.
Medibank Private is facing challenges such as customers searching for cheaper products due to reduced taxpayer support for private health insurance. Additionally, claims are growing faster than premiums, adding pressure to the business.
Advisers for the sale are expected to be appointed by the end of November, and a scoping study is planned to be completed by the 2014 budget. These steps are part of the preparation process for the sale.
Since converting to a profit several years ago, Medibank Private has paid $1 billion in dividends to the government, highlighting its financial contribution as a government-owned entity.
While the article does not provide specific predictions, it mentions that other privatizations, like that of the Commonwealth Bank, have gone on to be both competitive and successful, suggesting a positive outlook for Medibank Private post-privatization.
Call 1300 880 160
Start a chat
Schedule a call
