Key Highlights

  • Medibank’s group Revenue from external customers increased 5.9% to $9.12 billion, while underlying NPAT rose 2.9% to $636.8 million.
  • Statutory NPAT attributable to Medibank shareholders increased 27.5% to $638.7 million, compared with $500.8 million in FY25.
  • Medibank Health segment profit increased 31.3% to $100.7 million, supported by growth across the health services portfolio.
  • The fully franked FY26 Dividend increased 6.7% to 19.2 cents per share, including a final dividend of 10.9 cents.

Medibank Group (ASX:MPL) reported higher revenue and profit for FY26, with growth across Health Insurance and Medibank Health contributing to a 5.9% increase in group revenue to $9.12 billion. Underlying NPAT rose 2.9% to $636.8 million, while statutory NPAT attributable to shareholders increased 27.5% to $638.7 million. The company also increased its total fully Franked Dividend to 19.2 cents per share.

Health Insurance Delivers Measured Growth

Health Insurance remained the largest contributor to the group’s operating performance. Operating profit increased 3.8% to $769.8 million, while the Operating Margin remained unchanged at 9.0%.

Resident policyholder numbers increased by 22,100, or 1.1%, with growth of 0.6% in the Medibank Brand and 2.4% at ahm. The company reported greater competitive pressure during the fourth quarter, alongside increased switching and aggregator activity as household budgets remained constrained.

Resident premium revenue increased 4.5% to $8.27 billion. Net resident claims expense increased 4.4% to $6.92 billion, while resident claims growth per policy unit rose 2.6%. Resident gross margin increased 10 basis points to 16.3%, with customer growth weighted towards lower product tiers.

Non-resident policy units declined 2.3%, reflecting lower student growth following tighter migration settings and the natural run-off of cohorts acquired after the reopening of international borders.

Medibank Health Expands Earnings Contribution

Medibank Health recorded another year of substantial growth. Revenue increased 30.8% to $634.8 million, while segment profit rose 31.3% to $100.7 million.

The result included a full-year contribution from 100% ownership of Amplar Health Home Hospital and a six-month contribution from Better Medical. Gross Profit increased 26.5% to $327.2 million, although gross margin declined 180 basis points to 51.5%. The lower margin reflected additional Investment in the Live Better rewards programme and changes in Business mix, partly offset by efficiency gains.

Operating profit increased 27.4% to $107.3 million, with the company reporting organic growth across its health services businesses.

Investment Income Declines

Investment income was a weaker component of the FY26 result. Net investment income declined 13.9% to $178.9 million from $207.8 million.

Income from both growth and defensive portfolios declined by $7 million. The defensive portfolio was affected by a lower average RBA cash rate and wider Credit spreads, while growth portfolio income was reduced by lower income from Australian and international equities.

Other income and expenses also moved against the group, increasing to a net expense of $29.6 million from $18.9 million. Cybercrime-related costs declined 12.1% to $34.9 million, with the company indicating that costs associated with its IT security uplift are expected to be below $20 million in FY27, excluding potential outcomes from regulatory investigations or litigation.

Capital Position and Customer Benefits

Medibank reported a Fund prescribed Capital amount coverage ratio of 1.9 times. Health Insurance required capital was $1.20 billion, with the Health Insurance capital ratio at 13.3%.

The group continued to allocate resources towards customer benefits, reporting approximately $299 million in value delivered through Members’ Choice and no-gap networks, while Live Better rewards amounted to $48.6 million. More than one million members were enrolled in Live Better.

The company reported 5.3 million patient interactions through Amplar Health during the year, including 4.1 million GP consultations.

Dividend and FY27 Outlook

The Board declared a fully franked final dividend of 10.9 cents per share, taking the FY26 ordinary dividend to 19.2 cents per share, up 6.7% from FY25. The Payout Ratio was 83.0% of underlying NPAT, within the company’s stated 75% to 85% target range.

For FY27, Medibank expects resident health insurance gross margin to remain broadly consistent with FY26, while targeting further policyholder growth. The company expects Medibank Health segment profit to increase by approximately 25%, including a full-year contribution from Better Medical. It also continues to indicate capacity to pursue additional acquisitions consistent with its growth strategy.

Conclusion

Medibank’s FY26 results show continued expansion in revenue and operating profit, with Medibank Health providing a particularly notable contribution to earnings growth. Underlying NPAT increased at a slower rate than statutory NPAT, while investment income declined and health insurance faced greater competitive and affordability pressures. The higher dividend, improving policyholder numbers and expected growth in Medibank Health provide the principal financial developments heading into FY27.