Insurer vows to return $800m to customers

Health fund Bupa will give its members a cash handout of up to $314 per policy in October as part of its promise to return its pandemic savings.

Insurers including Bupa have said they will compensate customers for the fact far fewer operations and extras services were carried out due to Covid-19.

Bupa is set to return cash to 1.7 million eligible members shortly before the insurance giant hikes premiums by about 3.18 per cent on November 1.

Bupa announced on Monday it would return an extra $160m to customers on top of the $155m it committed to cashbacks in June.

Since the start of the pandemic, the insurer has committed a total of about $800m in financial support for its customers.

Eligible customers will receive payments of between $35 and $314, depending on their policies.

The cashback will be available to all domestic Australian resident policyholders who had private health cover with Bupa for a minimum of three months between July 1, 2021 and June 30 this year.

It excludes ambulance only policyholders, overseas visitors and students with hospital cover.

Bupa Health Insurance managing director Chris Carroll said Bupa was “honouring its pledge” to customers that it would not benefit financially from Covid-19.

“We know many Australians are doing it tough because of higher inflation and rising cost of living pressures,” he said.

Insurers promised not to profit from Covid-19 but they were nevertheless one of the only parts of Australia’s health system to benefit from the pandemic.

They paid out nearly $1bn less in benefits and gained hundreds of thousands more members as people signed up in a bid to skip lengthy queues for surgery and other procedures in public hospitals.

Insurers have since the start of the pandemic in 2020 returned some of their profits to customers including through cashback payments, delays to premium rises and support for those experiencing financial hardship.

Bupa pushed back its premium increases for 2022 from April to November 1, which it claims means it can pass on an additional $146m in Covid-related savings.

The Australian Competition and Consumer Commission (ACCC) has said it is keeping a close eye on insurers to make sure they return all profits made due to Covid-19 as promised.

“We expect insurers to return all benefits from procedures that were not performed and are not expected to be performed later,” ACCC deputy chair delie Rickard said in December last year.

“This may be particularly applicable to extras treatment and geographic areas that were subject to extended lockdowns.”

In June last year, nearly 14 million Australians or approximately 54.3 per cent of the population, had some form of private health insurance, an increase of 1.4 per cent from June 2020.