Fund Manager Summary on Medibank Private Ltd (ASX:MPL)
In March 2026, Perpetual Asset Management commented that Medibank Private Ltd (ASX:MPL) is a well‑run, stable business with a 5.9% gross yield including franking, supported by a 5.1% approved premium increase and cost‑saving clinical initiatives such as shifting post‑surgery care to home. Fund manager commentary collectively portrays MPL as a core private health insurer with repeated earnings upgrades driven by strong claims management and clinical‑practice changes (Alphinity), supportive premium outcomes and policyholder growth (Airlie, Pendal, Perpetual), and a strategic pivot into preventative and primary care that includes the $159m Better Medical acquisition and a Medibank Health division target of $200m operating profit by FY30 versus consensus $126m (Pendal, Investors Mutual), which could drive mid‑to‑high single‑digit EPS CAGR if executed; however, managers also flag clear risks — regulatory intervention and political sensitivity, stress among hospital operators, revenue‑mix headwinds and rising cash claims per policy plus temporary opacity as MPL cycles from accrual to cash — so actionable priorities are to monitor premium approvals and pricing trajectory, claims inflation and cash‑flow conversion, the execution and margins of healthcare services and hospital ventures, and potential regulatory developments that could compress margins or necessitate further pricing adjustments.
Commentary From The Managers
There are 9 insights from 6 fund managers regarding their investment in Medibank Private Ltd (ASX:MPL) available on Thesis Tracker.
Unlock Updates With ThesisTracker Pro
Don’t let information asymmetry undermine your investment returns. Join other engaged investors on ThesisTracker Pro.
Updates are made available to members within 12 hours of being released. The completeness, accuracy or current status of the investments referenced are not guaranteed.
Commentary From The Managers
Perpetual Asset Management
2 Mar 2026
$4.40
Summary
- Perpetual Asset Management believes Medibank Private is a solid, well‑run business in a stable industry and continues to hold because it delivers an attractive gross yield and earnings support from recent premium increases.
- Attractive yield: ~5.9% gross including franking, which is higher than peer names discussed today except for GQG.
- Business quality: Operationally strong and focused on efficiency improvements that should protect margins.
- Regulatory risk: The principal risk is potential additional government regulation in the private health sector.
- Revenue/earnings support: Government approval of a 5.1% premium increase for next year provides near‑term profit underpinning.
- Cost innovation: Initiatives to shift post‑surgery care to the home aim to reduce hospital stays and lower costs for both customers and providers.
- Sector implications: Efficiency moves can pressure some hospital operators (eg, Ramsey) but help Medibank’s cost profile and customer outcomes.
Pendal Group
23 Feb 2026
$4.45
Summary
- Pendal Group believes higher premiums were necessary to offset deteriorating revenue mix and rising claims, and continues to hold because the base case of 6–7% EPS growth at a reasonable ~18.5x PE remains intact while margins appear stable.
- MPL rallied 6% the day before the result on announced premium increases, but the gain was reversed after the result.
- Premium increases: industry +4.4%, MPL +5.1%.
- Revenue mix headwinds deteriorated by 50bp to 1.5% and cash claims per policy rose 3.5%; together these effects fully account for the ~5% pricing.
- Margins should remain stable, but there is no obvious buffer to absorb further industry or political headwinds.
- Result clarity: MPL results are typically strong and clean; this result was more opaque.
- Cash flow signals suggested cash claims may be under more pressure than accruals imply, which management attributes to faster claim settlements.
- Conservative management actions: extended benefit limits for some policies and increased hospital indexation to offset low utilisation.
- Outlook: no change to consensus; full visibility requires MPL to cycle from accrual to cash accounting over the next 12 months.
Investors Mutual Limited
31 Dec 2025
$4.79
Summary
- Investors Mutual Limited believes Medibank Private (MPL) is strategically positioned and continues to hold because the acquisition of Better Medical and the focus on preventative health are expected to deliver standalone returns and reduce hospitalisations, supporting the core health insurance business.
- Quarter performance: MPL was broadly flat in the December quarter.
- Acquisition: Announced purchase of Better Medical, a network of 61 medical clinics across QLD, VIC, SA and TAS for $159m.
- Scale: The deal builds on MPL’s existing primary care footprint (~105 centres), increasing scale and geographic reach.
- Strategy: Deploying capital into preventative health to earn a reasonable stand-alone return on capital while aiming to reduce hospitalisations, which benefits the health insurance business.
- Policy tailwind: The federal government’s November increase to bulk billing incentives is expected to be positive for MPL.
- Investment rationale: Strategic acquisitions, expanded primary care scale and supportive policy changes underpin continued conviction.
Pendal Group
3 Nov 2025
$4.84
Summary
- Pendal Group updates their investment thesis on Medibank Private Ltd (MPL) following the recent investor day.
- The focus was on the Medibank Health division, which offers wellbeing services, telehealth, at-home care, and new hospital ventures.
- This division, while small, is crucial for sustainability and aims to position MPL as an integrated player in the healthcare sector.
- MPL has set a new target to grow this division to $200m operating profit by FY30, exceeding consensus forecasts of $126m.
- If successful, this growth could add 6% to consensus earnings by FY30.
- Key growth drivers include organic revenue growth of ~10%, supported by at-home care and new health monitoring technologies.
- Additional support is expected from fixed cost leverage, maturation of hospital ventures, and increased capital deployment.
- Achievement of these targets could result in a mid-to-high single digit EPS CAGR and a differentiated franchise compared to health insurance peers.
Airlie Funds Management
1 Aug 2025
$5.04
Summary
- Airlie Funds Management notes a strong performance from Medibank Private, with a 30% increase over the past year, including dividends.
- The fund has trimmed its position in Medibank, reflecting its significant size in the portfolio.
- Despite the trim, the investment setup remains attractive, with good potential for growth.
- There is decent policyholder growth and manageable claims expected to continue.
- Regulatory risks are present, particularly with hospital operators facing challenges and seeking government intervention.
- Overall, Medibank is well-positioned for ongoing growth, bolstered by strong market share and effective management during COVID.
- Airlie Funds Management anticipates that the company will continue to deliver positive results moving forward.
Alphinity Investment Management
17 June 2025
$4.90
Summary
- Alphinity Investment Management considers Medibank (ASX: MPL) as one of their top portfolio positions.
- Medibank has shown consistent earnings upgrades over the last three years.
- The company benefits from a high quality management team skilled in managing claims.
- Medibank has been proactive in changing clinical practices to improve patient outcomes and reduce claims costs.
- The combination of these factors has led to consistent earnings outperformance.
- Alphinity's confidence is based on real underlying fundamentals driving these upgrades.
- This trend is not viewed as a short-term blip, but rather a sustained pattern.
- As long as earnings revisions persist, Medibank is seen as a core contributor to portfolio alpha.
Airlie Funds Management
31 Mar 2025
$4.44
Summary
- Airlie Funds Management continues to hold Medibank Private due to a solid 1H25 result.
- The company announced a premium rate rise of 3.99%, exceeding market expectations.
- This increase has helped reduce some of the "regulatory risk" discount previously affecting the stock.
- The positive performance reflects confidence in Medibank's operational stability.
Ten Cap
28 Feb 2025
$4.35
Summary
- Ten Cap notes a positive performance from Medibank, highlighted by a beat in results.
- Coinciding with this was a surprisingly positive government rate announcement.
- However, there is a noted dislocation in rate and rhetoric.
- The government has urged insurers to pay more to private hospitals.
- Ten Cap continues to view the sector as fundamentally challenged.
- This challenge is attributed to ongoing structural headwinds.
Airlie Funds Management
30 Sept 2024
$3.65
Summary
- Airlie Funds Management views Medibank as pivotal in Australia’s health transition, serving over 4.2m customers and alleviating pressure on the public healthcare system.
- Medibank paid out $6.3bn in health insurance claims in the last financial year, underscoring its role in funding medical care.
- Regulatory tensions exist as the private health insurance sector faces criticism for profitability amid rising healthcare costs.
- Private hospitals are struggling due to labor shortages and inflation, leading to calls for government bailouts, which may not resolve underlying structural issues.
- Medibank is investing in new models of care, shifting focus from expensive hospital stays to virtual care and home care, aiming to lower overall healthcare costs.
- The transition is essential to prevent increased government spending on healthcare, estimated to rise significantly over the next forty years.
- Federal Health Minister acknowledges that the government cannot sustain unprofitable hospital models and that some closures may be necessary.
- Medibank has returned $1.46bn to customers during the pandemic, maintaining a gross profit margin below pre-pandemic levels, indicating a commitment to not profiting from the crisis.
- Despite regulatory uncertainties, Airlie Funds Management sees an investment opportunity in Medibank, which has grown earnings per share at 8% p.a. over the past decade.
- Medibank exhibits financial strength with a capital ratio of 14.1% and zero debt, positioning it well for future challenges.
- As Australia’s largest health insurer, Medibank holds a 27% market share, allowing it to negotiate better terms with hospitals.
- Management quality is strong under CEO David Koczkar, who has driven policyholder growth and cost management since 2014.
- Valuation metrics are attractive, with Medibank trading below its long-term P/E average and offering a dividend yield of 4.6%.
The completeness, accuracy or current status of the investments referenced are not guaranteed.
Frequently Asked Questions
Who is investing in Medibank Private Ltd (ASX:MPL)?
Fund managers including Ten Cap, Alphinity Investment Management, Airlie Funds Management, Pendal Group, Investors Mutual Limited and Perpetual Asset Management have invested in Medibank Private Ltd (ASX:MPL).
Why do fund managers invest in Medibank Private Ltd?
Fund managers invest in Medibank Private Ltd due to its solid growth prospects and stable management. The company has consistently upgraded earnings, indicating strong underlying fundamentals. With a significant market share and effective claims management, Medibank is well-positioned despite regulatory challenges in the health sector. Additionally, the recent premium rate rise has alleviated some regulatory risk. Investors are attracted by its potential for sustained earnings growth and favorable dividend yields, underpinning a favorable risk/reward profile.
What happened to Medibank Private Ltd (ASX:MPL)?
Fund managers, including Pendal Group, are investing in Medibank Private Ltd due to its strategic focus on expanding the Medibank Health division. This segment, which includes well-being services, telehealth, and at-home care, aims for a significant increase in operating profit to $200 million by FY30, surpassing industry forecasts. The anticipated organic revenue growth of around 10% is supported by new health technologies and hospital ventures, enhancing Medibank's market position and potential earnings growth in a competitive landscape.
What is the short interest in Medibank Private Ltd (ASX:MPL)?
The short interest in Medibank Private Ltd (ASX:MPL) is 1.21% which makes it the 193rd most shorted stock on the ASX. Of the 2.8B shares that Medibank Private Ltd has on issue, 33.3M have been sold short.
What does Medibank Private Ltd (ASX:MPL) do?
Medibank Private Ltd. engages in the underwriting and distribution of private health insurance policies. It operates through the Health Insurance and Medibank Health segments. The Health Insurance segment offers private health insurance products including hospital cover and ancillary cover, as stand-alone products and packaged products. The Medibank Health segment refers to a range of activities including contracting with government and corporate customers to provide health management services, as well as providing a range of telehealth services in Australia. The company was founded in 1976 and is headquartered in Docklands, Australia.