👉 Background: Medibank Private was founded in 1976 by the Australian Government as a not-for-profit private health insurer. It turned into a for-profit entity in 2009 and it listed on the ASX in 2014. In 2022, a cyberattack stole the data of 9.8 million of Medibank's customers.

👉 What happened: Last year, Medibank vowed to recover from this debacle by growing its resident policyholder growth by between 1.2% - 1.5%. But now, Medibank has reported that its net resident policyholder growth was just 0.7%.

👉 What else: The good news is its non-resident policy growth jumped more than 25% because more foreign students took up its private health cover. Unfortunately, that didn't impress investors enough.

What's the key learning?

💡Not all policyholders are valued the same way for private health insurers - that's because these different policyholders generate different levels of revenue and stability for insurers.

💡Resident policyholders are considered more stable because are likely to stay with their insurer for longer and provide steady revenue. In fact, Medibank Private has a retention rate of roughly 75% of their policyholders year on year. But non-resident policyholders, such as international students or temporary workers, generally hold policies for shorter periods of time.

💡So, while non-resident policyholders grew by 25%, investors are more focused on the sustainability provided by resident policyholders which is crucial for Medibank’s long-term success.