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Careful financial management enabled market-leading support for members
Prudent management of HBF’s investments portfolio and rigorous financial discipline across the fund in the 2020 financial year (FY20) have ensured market-leading support for members and the community during COVID-19.
HBF Chief Executive Officer John Van Der Wielen said a positive 2.1 per cent return from the fund’s investments portfolio underpinned the surplus result in FY20.
“Through the careful management of HBF’s capital reserves – which are critical to the fund’s long-term stability – we delivered a 2.1 per cent return in a year when many organisations reported negative returns,” he said.
“The investments return equated to $34.7 million – a substantial part of our overall $38.8 million surplus result in FY20. Delivering a surplus result helped ensure HBF was able to continue providing value for members and keep health insurance affordable, in line with our ethos as a not-for-profit organisation.
“In particular, HBF implemented an industry-leading response to COVID-19 as the only major health insurer to commit to a 12-month premium increase cancellation for all members, providing an average saving of $75 per policy.
“In addition, we put in place a range of hardship support measures that had been taken up by approximately 15,000 members by the end of the 2020 financial year.
“And we once again had one of the highest payout ratios of all the major health insurers, with 88.6c per $1 received in premiums returned to members through claims during FY20.
“This has been a challenging year but I am proud of HBF’s response to support our members in these difficult times.”
The 2.1 per cent return on HBF’s investment portfolio, led by Mark Barnaba as Chair of the Management Investment Committee, was driven by two key factors – a well-timed 50 per cent reduction in HBF’s equity exposures in October 2019 to reduce risk and a gradual increase in equities in mid-March 2020 as the capital markets began to rally following the severe contraction due to COVID-19.
In addition to the benefits provided to members in FY20, HBF used its strong financial position to progress key initiatives under its strategic plan.
This has included expanding HBF into the east coast market, offering premium products as an experienced not-for-profit PHI with a strong and proud history in WA. The campaign is based on the quintessential Western Australian quokka to introduce the HBF brand to the rest of Australia. Gaining greater scale will help ensure HBF can provide value for members over the long-term.
HBF continued to advance its transformation strategy with the launch of a new mobile app and progress made in replacing the fund’s technology platforms with the latest digital technology.
HBF’s strategic plan also includes exploring merger and acquisition opportunities and new business partnerships to deliver improved experiences for members. A significant achievement in 2020 was the decision to establish HBF-owned Member Plus dental clinics in Western Australia, through an agreement with Pacific Smiles Group.
“In FY20, not only did we act to support our members now but we also continued to invest in the future through our east coast expansion, technology transformation, and other strategic growth initiatives that are aimed at providing long-term value for our members,” Mr Van Der Wielen said.
“For example, in FY20 we spent $41 million of the $200 million earmarked in a transformation package that will provide a far more intuitive, personalised and modern service for our members. We also launched our innovative east coast advertising campaign aimed at attracting new members to the value we provide as an experienced not-for-profit health fund.”
Download the Annual Report 2020 (PDF)
Contact: Lauren Underhill, HBF Corporate Affairs, CorporateAffairs@hbf.com.au / 0438 925 050
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