Threat to Medibank from Comparison Sites

The number of policyholders under the Medibank Private brand has shrunk. Only fractionally, but there are less Medibank Private policyholders today than two years ago. All of the growth is coming within Medibank’s no frills insurance brand, ahm.

Mathias Cormann didn’t like my suggestion that comparison websites present an increasing threat to Medibank Private’s business. The finance minister followed me on the ABC’s The Business last night (the relevant section starts at 3:30) and said comparison sites have been around since he was running a health insurance business more than 10 years ago.

Nothing has changed, apparently. True, I haven’t run a health insurance business. But the numbers presented in Cormann’s Medibank IPO document suggest the world has changed since his own time on the tools.

It is being loudly trumpeted that Medibank is a growing business and that is born out in the policyholder numbers. They grew 1.04% in the 2013 financial year and 1.46% in 2014. More than 1.8 million Australians have a health insurance policy with the company. But table 3.4 on page 43 of the prospectus provides the interesting detail.

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