The Medibank Private Ltd (ASX: MPL) share price has dropped 7% after releasing its FY26 result.
Medibank is a major private health insurer which operates the Medibank and ahm brands. It also has a growing healthcare segment called Medibank Health.
FY26 result
Below are the numbers for the 12 months to 30 June 2026:
- Revenue increased 5.9% to $9.1 billion
- Health insurance operating profit up 3.8% to $769.8 million
- Medibank Health segment profit rose 31.3% to $100.7 million
- Corporate overheads rose 2.2% to $57 million
- Net investment income fell 13.9% to $178.9 million
- Underlying profit before tax rose 1.8% to $927.9 million
- Statutory net profit up 27.5% to $638.7 million
- Dividend per share hiked by 6.7% to $0.192
What drove these numbers?
Medibank Private saw its net resident policyholders grow by 1.1%, or 22,100. Growth in Medibank doubled to 0.6%, while ahm grew 2.4% despite lower aggregator joins.
However, net non-resident policy unit growth was actually a decline of 8,200 (or 2.3%). This reflected tighter migration settings and the natural run-off of large cohorts acquired after the borders reopened.
The key reason that statutory net profit increased so much was because there was a large (financially negative) movement in the COVID-19 reserve in FY25 of $182.8 million, which wasn’t repeated in FY26.
Medibank saw another $34.9 million of cybercrime costs in FY26, which was 12% less than FY25’s figure, but it still reduced underlying profitability.
The company noted that Medibank Health benefited from contributions from the acquired Amplar Health Home Hospital and Better Medical. There was strong organic operating profit growth across all of this division’s segments.
Outlook for the Medibank share price
Turning to guidance for FY27, in terms of its resident policyholder growth, it aims to grow its market share in a disciplined way, including “improved volume momentum in the Medibank brand”.
The resident private health insurance (PHI) gross profit margin is expected to be broadly consistent with FY26, depending on the April 2027 premium increase.
Non-resident PHI gross profit is expected to see “solid” growth in FY27.
Medibank Health’s segment profit is expected to see growth of around 25% in FY27, which will benefit from a full-year contribution from Better Medical.
Finally, regarding potential acquisitions, it said it has a strong asset pipeline – it wants to pursue further growth.
I think the Medibank share price is one of the ASX dividend shares to consider for income. Today’s fall only puts it back to where it was a few months ago, but the future continues to look good for ongoing profit growth.
In my view, it’s a defensive name worth owning in a blue chip portfolio, though it’s not one of the first ASX dividend shares I’d buy today.
