Bupa has added 150,000 customers across UK its private medical insurance (PMI), health trusts, dental and cash plans products in 2022.
Meanwhile the Bupa Global international PMI business has returned to profitability as it increased prices to manage rising claims and completed a major reorganisation creating three regional units: Middle East & Asia Pacific, Europe, and UK & Africa.
Bupa UK Insurance and Global both saw higher premiums collected during the period. Insurance premiums were £872m, up £99m or 13%, while Global premiums were £380m, up £17m or almost 5%.
The details were revealed in the group’s half year statement for the six months to 30 June which showed a pre-tax profit of £189m, down 35% from £291m in the same period of last year.
However this was driven primarily by exceptional and one-off costs, with the business posting underlying profit of £280m, up from £234m, and overall revenue of £6.7bn, up from £6.5bn.
Bupa’s UK insurance business delivered “significant” growth due to an increase in customers over the year so far and the impact of the return of premium in 2021, the insurer said.
Within the Bupa Global business, it said revenue had increased and profitability improved, “driven by increased customer volumes, strong retention, and pricing adjustments to reflect claims inflation”.
Noting the geographical reorganisation it added: “This supports our plans for long-term sustainable growth by responding to the distinct needs of our customers and our people in each region, with an increased focus on digital experience.”
In its health services business, revenue grew substantially while underlying losses reduced, driven by higher customer numbers in clinics and the Cromwell Hospital and strong growth across all product and service lines. Three new health clinics were opened and the Cromwell Hospital opened a new outpatient centre in London over the period.
However, Bupa reported that underlying losses in its UK dental business increased driven by sector-wide pressures, including an ongoing shortage of dentists, particularly for NHS work, and of dental nurses.
Productivity in this business has not yet returned to pre-Covid levels, and Bupa added it was adversely affected by increased costs due to workforce supply constraints, rising energy prices, and growing consumer caution towards elective treatment as a result of cost-of-living pressures.
And while the group conceded the long-term opportunity in UK dental remains attractive, current industry pressures mean poor returns will continue into the near term.
The combined Bupa UK and Global division saw profit for the period more than treble to £74m, up from £16m in the same period last year. This was on the back of a 9% rise in revenue to £1.8bn.
International businesses
The Bupa Asia Pacific business saw revenue decline by 3% to £2.7bn largely due to the continued commitment to return savings from Covid to Australian health insurance customers, ongoing portfolio optimisation in its dental and aged care businesses as well as the impact of the pandemic across these underlying businesses.
Underlying profit was £131m, a fall of 5% reflecting localised lockdowns and staff availability in the group’s health services business and increased costs and reduced occupancy in its aged care businesses due to the impact of Covid.
And in the Europe and Latin America business underlying profit declined by 29% to £57m despite revenue growing by 11% to £2.1bn.
Bupa noted customer growth across most businesses was more than offset by increased claims levels in insurance businesses due to the reduced disruption from Covid and ongoing challenges in Bupa Chile as a result of regulatory interventions and judicial decisions.
Overall the insurer said it was pleased with the results: “We are continuing to navigate the impacts of Covid-19, both direct and indirect, across our markets, although these are generally reducing in most locations.
“The recruitment and retention of healthcare workers remains an ongoing sector-wide challenge in multiple markets – impacting our health provision businesses, notably UK Dental, and aged care businesses in UK and Australia.
“Inflation continues to increase costs for our businesses and for our customers, although we are encouraged by recent customer growth across our markets as they see value from the healthcare services we provide.”
