Bupa has provisionally allocated an additional £40m rebate to UK policyholders from increased profits generated as a result of the Covid-19 pandemic.
The insurer announced the move in its interim results for the first six months of the year, which showed a pre-tax profit rise of 60% to £245m across its worldwide business with revenue up 9% to £6.5bn.
However, profits within its combined UK and Global division tumbled 59% to £9m, despite revenue rising 9% to £1.66bn, as a result of increased claims within its international private medical insurance (IPMI) arm.
The division covers 2.3 million UK domestic PMI customers and more than 491,000 IPMI customers, along with its clinical, dental and care services.
The insurer followed WPA in telling UK customers it would offer a rebate to pass back any exceptional financial benefit from the temporary disruption to medical treatments in 2020.
In March it announced the £125m payback and confirmed in June that it would complete the payments that month, with around 290,000 customers compensated so far.
Today it added that a further £40m was being set aside for another potential round of rebates.
“The final settlement is yet to be determined as we continue to see how claims rebound, and we retain a residual provision of £40m at 30 June 2021,” Bupa said.
It also noted that it was conducting around 6,000 digital GP appointments every week and 42% of business customers used its connect portal.
IPMI and dental
In its IPMI business revenue was stable but underlying profit declined as claims levels increased, rebounding from the lower levels experienced in 2020 with half of claims are now done online.
Bupa noted strong growth in its dental services due to an increasing number of private and NHS patients.
Health & Protection has reported MPs frustration as NHS dental services have been hard hit throughout the pandemic and it appears patients are turning to private provision instead.
The insurer noted: “The limitations imposed by Covid-19 safety measures are unlikely to be relaxed in the short term, thereby continuing to restrict the number of appointments and increasing costs.”
Health services revenue increased by 13% driven by increased customer activity in the clinics while underlying profit was stable year-on-year.
The Cromwell Hospital’s long Covid clinic had increased demand while it is continuing to work with NHS England providing time-critical cancer and cardiac care for NHS patients.
Worldwide revenues up
In the Australia and New Zealand business underlying profit doubled to £132m with revenue up 6% to £2.5bn which Bupa said was largely due to strong customer retention, the 2020 premium rate deferral in health insurance, and improved customer volumes in its health provision business.
Profits in Europe and Latin America slipped 3% to £68m despite revenue growing of 14% to £2bn as rising insurance claims following the disruption in early 2020 wiped out profits in other areas.
The combined India, Saudi Arabia and Hong Kong business saw profits drop 16% to £26m despite revenue rising 5% to £232m predominantly reflecting ongoing Covid-19 impact on the associate business in India.
The India operation is being rebranded to Niva Bupa and is overseen by the Bupa Global & UK from 1 July, while Hong Kong has been added to Australia and New Zealand in the Bupa Asia Pacific arm also from 1 July.
Iñaki Ereño, group CEO said he was pleased with the first half results but the business knew it could not stand still.
“In health insurance, although revenue has grown, we have seen profits reduce year-on-year driven by a higher claims figure as the disruption to healthcare services seen in 2020 has reduced,” he said.
“Our health provision businesses are coming back strongly as they navigate successive lockdowns and evolving restrictions. Customer volumes in our dental businesses are improving well.
“We are seeing occupancy rates improving in our aged care businesses as some lockdown restrictions are eased. Protecting residents and staff remains our absolute focus and we are continuing to invest in safety equipment, staff training and support.”
