In the last two years, the purchase of Private Health Insurance policies taken out for the first time has grown rapidly to an annual rate of 288,000. These are the latest findings from the Roy Morgan Research Consumer Finance Survey.
In the last two years, the purchase of Private Health Insurance policies taken out for the first time has grown rapidly to an annual rate of 288,000. These are the latest findings from the Roy Morgan Research Consumer Finance Survey of over 50,000 interviews per annum.
The announcement in early 2012 by the Australian government regarding Health Insurance reforms has led to an increase in new entrants to the market. The introduction of income testing for the Medicare Levy Surcharge from 1st July, 2012 resulted in a surge of new entrants with the aim of avoiding the payment of the Medicare Levy Surcharge.
Over a four year period, the annual number of policies taken out for the first time has nearly doubled from 162,000 in March 2009 to 288,000 in March 2013.
Further analysis of the new entrants segment reveals that they are primarily young singles or young couples without children. Almost three quarters of this group earn an annual Personal Income of below $60,000.
Within the Private Health Insurance market, the proportion of customers who have shopped around before renewing their policy has steadily increased, resulting in a lower rate of automatic renewals.
Source:Roy Morgan Single Source (Australia), 6 month moving average, average sample size = 11,197
Base: Australians 14+ Private Health Insurance customers
Norman Morris, Industry Communications Director, Roy Morgan Research, says:
“The reforms to the rebate tier system which took place mid last year coincided with a surge of new entrants to the market. Increased advertising, comparison tools and competition within the industry could also be a contributing factor to the rapid growth in new policy uptake.
The decline in the level of automatic renewals is a threat to established industry players who do not keep up their marketing effort.”
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