Private health costs are rising — but insurer profits fell 16.6%

APRA's latest private health insurance performance statistics provide an industry-wide view of premium revenue, claims, expenses, profitability and capital.

Because APRA reports financial flows quarterly, summing the four quarters to June provides a useful comparison between the 2024–25 and 2025–26 financial years.

Private health insurers collected $32.89 billion in health insurance premium revenue in 2025–26, up 5.7% from $31.11 billion a year earlier.

But insurance claims increased faster, rising 7.0% to $28.10 billion. Claims therefore absorbed 85.4% of premium revenue, compared with 84.4% the previous year.

The political significance is that Australia's private health cost problem cannot simply be explained by expanding insurer profits.

APRA's insurance service result — broadly, the result generated from insurance operations — fell 6.2% to $1.69 billion over the financial year. Total industry profit after tax fell even more sharply, from $2.13 billion to $1.78 billion, a decline of 16.6%.

That provides some support for the Government's argument that underlying health costs were putting genuine pressure on premiums. The Government approved an average private health insurance premium increase of 4.41% from 1 April 2026 after requiring insurers to resubmit their proposed increases several times.

There is, however, an important early sign that the premium increase is providing insurers some relief. In the June quarter alone, premium revenue was 8.5% higher than a year earlier while claims rose 6.9%. The quarterly insurance service result consequently jumped 50.4% to $446 million.

For policymakers, the problem is therefore broader than insurer margins: households are paying higher premiums and, as APRA's separate statistics show, higher out-of-pocket costs, while insurers themselves are facing rapidly rising claims.

Source: APRA Quarterly Private Health Insurance Performance Statistics, June 2026. Benchmark Analytics calculations.