Medibank Private boss takes aim at health insurance aggregators amid ‘risk of commission-driven churn’

Medibank Private’s boss has blasted “aggressive” health insurance comparison websites pushing “churn” between different providers, saying their chase of lucrative commissions are driving up premiums.

Chief executive David Koczkar said aggregators were used by consumers looking for a good deal, but the commissions they charged could account for “between 20 and 30 per cent of first-year premiums”.

“They’re paid by insurers ... eventually that is part of the consideration for premium increases because they add to the cost of delivering insurance,” Mr Koczkar told The West Australian.

Commissions paid by the sector to aggregators had almost doubled over the past two years to around $200 million, he said.

Three quarters of comparison website sales in the 2024-25 financial year were switching between funds, and only one quarter was attracting new people to the industry, he said.

“The concern is that aggregators may be incentivised to (pocket) more commission by driving churn,” Mr Koczkar said.

“So there’s a question of value for the industry, but there’s also a question of value for consumers, and we need to shine a light on this issue.

“What we’re calling for is more transparency, and we want the industry to have a look at this cost area that’s been growing in plain sight.”

Mr Koczkar said he wrote to Health Minister Mark Butler about it on Thursday, after raising the issue with him personally previously, and had also pushed for action at the Federal Government’s CEO Forum involving leaders from private hospitals, health insurers and healthcare providers.

“What I’ve said is, if we’re serious about keeping pressure off premium increases and improving affordability, every cost in private health should be held to the same standard,” Mr Koczkar said.

Aggregators did not represent every fund or product — with Medibank not present at all — and while its AHM brand was part of most comparison websites, it had been removed in December from one of them due to “unacceptable” terms, he said.

That was expected to have some impact on customer volumes in the short term, Mr Koczkar said, adding the only generally comprehensive comparison was available through the Government’s www.privatehealth.gov.au website.

Mr Koczkar’s comments came as Medibank’s 2025-26 results showed its total number of policyholders inched one per cent higher, skewed to lower tier products, and there was higher switching amid increased competition and fierce aggregator marketing.

Australian resident customer numbers lifted 1.1 per cent, with strength among the 25 to 30 age group observed.

But the number of non-resident policy units went backwards by 2.3 per cent, attributed to lower student growth, reflecting tighter migration settings, and “natural run-off of large cohorts acquired following borders reopening”.

The insurer booked a 2.9 per cent lift in full-year underlying net profit, which strips out one-off items, to $636.8 million, saying Australians were continuing to prioritise their health amid cost of living pressures.

Revenue rose 4.6 per cent to $8.58 billion — compared to a 5.4 per cent increase in expenses — and paid-out claims to customers also lifted by 4.6 per cent to $6.8b.

Mr Koczkar said Medibank’s claims payout ratio remained above the industry average.

In a bid to lift non-resident customer numbers, the company has introduced three new visitor health covers, with average daily joins doubling since launch, he said.

Medibank has observed virtual GP consultations outpacing face-to-face and people increasingly turning to AI first to ask about their health, their care and the right health insurance cover.

The company also observed a significant shift towards preventative health, with individuals and employers increasingly investing in physical, mental and financial wellbeing.

Mr Koczkar told a conference call that Medibank was “very well positioned to grow” in this space with a range of targeted products and programs including its Live Better rewards system.

The program allows members with eligible hospital or extras cover to earn up to $400 a year worth of redeemable points for taking actions like exercise or making healthy food choices and was “the reason one-in-three people choose Medibank”, he said.

The insurer declared a fully franked dividend of 19.2¢ a share, up 6.7 per cent.