News National Rival insurers praise Medibank sale plan

Rival insurers praise Medibank sale plan

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The upcoming public float of Medibank Private will increase competition in the private health insurance sector, rival NiB says.

The federal government is looking to privatise the insurer during this financial year through a public float expected to be worth around $4 billion.

The insurer’s impending stock market listing should see it become more aggressive in its battle for new customers with chief rival BUPA, nib chief executive Mark Fitzgibbon says.

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Mr Fitzgibbon, whose company has around eight per cent of the health insurance market, well behind that of BUPA and Medibank Private, said the government-owned insurer had been lagging behind its chief rival.

“I rather suspect that a privatised Medibank Private will probably be even more aggressive in trying to grow their market share,” he told analysts on Monday.

“I would expect Medibank Private won’t sit around too long allowing BUPA to eat their lunch at the top tier of the market.”

Mr Fitzgibbon said the public listing would give Medibank Private greater scope to buy out smaller competitors, meaning consolidation within the sector is a possibility.

“As a listed company it will have the ability to raise capital, its not had that ability before, so whether that plays out in more M&A activity, well time will tell.”