Medibank’s Underlying NPAT Climbs 8.5%, Dividend Rises 8.4% in FY25
Medibank Private Limited reported a robust FY25 with an 8.5% rise in underlying net profit after tax and an 8.4% increase in fully franked dividends, driven by growth in both resident and non-resident health insurance segments and expanding health services.
- Underlying NPAT rises 8.5% to $618.7 million
- Fully franked dividend increased 8.4% to 18.0 cents per share
- Medibank Health contributes approximately 10% of group operating profit
- Strong growth in resident and non-resident private health insurance
- Continued investment in AI, digital innovation, and health service expansion
Robust Financial Performance Amid Industry Challenges
Medibank Private Limited (MPL) has delivered a solid financial performance for the fiscal year ended 30 June 2025, reporting an underlying net profit after tax (NPAT) of $618.7 million, marking an 8.5% increase from the previous year. This growth reflects the company’s resilience and disciplined strategic focus in a competitive and evolving private health insurance market.
The company declared a fully franked dividend of 18.0 cents per share, up 8.4%, underscoring its commitment to delivering shareholder value alongside sustainable growth. Medibank’s operating profit rose 8.9%, supported by strong earnings across its core health insurance business and the expanding Medibank Health segment.
Growth in Resident and Non-Resident Health Insurance
Medibank’s resident private health insurance segment saw policyholder growth accelerate to 1.4%, doubling the prior year’s rate, with improved retention despite industry-wide switching pressures. The company’s ahm brand notably grew by 4.3%, benefiting from targeted marketing and product differentiation.
Non-resident health insurance, covering overseas visitors, workers, and students, continued to be a strong growth driver with an 11.6% increase in average policy units and a 22.4% rise in gross profit. Medibank is focusing on expanding its offerings in this segment, particularly targeting skilled workers and visitors, while navigating challenges such as student visa reforms.
Expanding Health Services and Digital Innovation
The Medibank Health segment contributed around 10% of group operating profit, growing 27% to $76.7 million. This includes organic growth and the full-year contribution from Myhealth Medical Group, which Medibank now owns 91% of. The company is investing heavily in virtual care, homecare, and preventative health programs, reflecting a strategic pivot towards integrated health services beyond traditional insurance.
Medibank has embedded artificial intelligence and generative AI across its operations to enhance customer experience, streamline workflows, and support personalised care models. These innovations aim to simplify health journeys and improve access, particularly in mental health and primary care.
Managing Costs and Capital for Future Growth
Management expenses rose 6.5%, driven by investments in technology, marketing, and product development, balanced by productivity savings. Cybersecurity costs related to ongoing regulatory investigations and IT security enhancements amounted to $39.7 million, with expectations for slightly lower costs in FY26.
Medibank remains well capitalised, with a prescribed capital amount coverage ratio of 1.8x and increased unallocated capital, positioning the company to pursue mergers and acquisitions aggressively. The company plans to invest between $150 million and $250 million in M&A over FY24 to FY26, focusing on expanding primary and virtual care footprints and corporate health and wellbeing sectors.
Outlook and Strategic Priorities
Looking ahead to FY26, Medibank anticipates moderated industry growth but aims to sustain disciplined market share gains through improved retention, targeted acquisitions, and product innovation. Claims growth per policy unit is expected between 2.6% and 2.9%, with proactive claims management and expanded use of AI in payment integrity programs.
The company will continue to deepen health engagement with customers, expand personalised and preventative care models, and leverage partnerships to support Australia’s health system transition. Sustainability commitments, ethical AI use, and embedding environmental health considerations remain integral to Medibank’s long-term strategy.
Bottom Line?
Medibank’s FY25 results set a strong foundation for disciplined growth and innovation, but regulatory and market dynamics will test its agility in the year ahead.
Questions in the middle?
- How will ongoing regulatory investigations and cybercrime costs impact Medibank’s future profitability?
- What specific M&A targets will Medibank pursue to accelerate its health services expansion?
- How effectively can Medibank sustain policyholder growth amid intensifying competition and industry reforms?