HCF Profit Falls 55% as Claims Costs Climb

The private health insurer's 2025-26 net profit dropped to $87.8 million as claims expenses outpaced revenue growth.

Updated on Nov. 5, 2026 in Healthcare

HCF Profit Falls 55% as Claims Costs Climb

Live Poll

Are you likely to downgrade your private health cover because of rising premiums?

HCF reported a 2025-26 net profit of $87.8 million, down 55% from $195.3 million the prior year. The insurer said claims expenses rose 11.5% while insurance revenue grew 8%.

Why it matters

The gap between claims costs and approved premium increases squeezes insurer margins and raises questions about the cost of private health cover for Australian policyholders. Rising medical technology, pharmaceutical and specialist demand are cited as the main pressures.

HCF's incurred claims expenses rose 10.5% to $4.04 billion while operating expenses fell $5.4 million to $532.4 million. Membership grew 3.9% to 2.15 million Australians, though the insurer's 2025-26 profit still fell sharply.

The players

HCF

HCF is a not-for-profit private health insurer in Australia that covers around 2.15 million members.

The details

HCF attributed the decline to hospital and treatment costs outpacing the government-approved blended premium increase of 4.41%. The insurer paid $3.95 billion in hospital, extras and medical benefits during the year, and its total insurance revenue grew to $4.52 billion.

2025-26: HCF full-year results reporting period.
2026: Federal government approved a 4.41% blended premium increase.

Market Landscape

Aon's 2027 Global Medical Trend Rates Report projects Australian employer medical plan costs will rise 4.9% next year. HCF's claims growth outpacing premium rises is consistent with that cost trajectory across the private health sector.

Rising claims costs that outpace approved premium increases can pressure the price of private health cover for policyholders. Members should watch for premium adjustments as insurers respond to higher medical technology and pharmaceutical costs.

The takeaway

Insurers facing rising claims costs may pass pressure on to premiums, so reviewing your private health cover each year is worthwhile. Compare level of cover and extras against your actual needs.