Medibank's First-Half Profit Slumps on Higher Claims, FVE Reduced to AUD 3.10

Narrow-moat Medibank reported a weak first-half fiscal 2020 result, with a 9% fall in NPAT to AUD 179 million reflective of industry challenges. The core health insurance business performed worse than the headline implies, down 20%, with investment income of AUD 38.5 million a sharp recovery from a meagre AUD 4.1 million last year. We expect the tough operating environment to persist, but claims inflation should slow.