28/10/2009 - 13:03

HBF reports $130m full-year loss

28/10/2009 - 13:03

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The HBF group has booked a $130 million net loss for the 2009 financial year as the state's largest health insurer's investments were hit hard.

HBF reports $130m full-year loss

The HBF group has booked a $130 million net loss for the 2009 financial year as the state's largest health insurer's investments were hit hard.

Last month, HBF had warned members that it expected to report a net loss of $115 million for its health fund, and an operating profit of $15.6 million for 2008/09.

The 2009 financial year net loss compares to the $5.3 million group loss reported the previous year.

HBF chairman Harvey Collins said in the report that HBF Health had made an operating surplus of $14.8 million, while HealthGuard reported a $5.4 million operating surplus and HBF Insurance recorded a $4.2 million operating profit.

"The poor performance of financial markets, however, has meant that overall, the Group experienced a $130 million deficit during the year due to a $158 million loss on investments," he said.

He added that the investment loss should be considered in context of that between 2000 and 2007, the group's investments grew from $200 million to $780 million.

"The loss on investments experienced during the past two years means that at the end of June 2009 HBF Group's investments stood at $676 million and we remain very well capitalised, both in terms of regulatory requirements and industry benchmarks," Mr Collins said.

The investment loss has also prompted HBF to take a more conservative approach with its investment strategy for 2009/10, and the board has decided to forego the normal consumer price index increases in salaries for employees, including the board and management.

In 2008/09, salaries and employee expenses were $65.8 million.

Contributions or premium revenue increased by $74.6 million to $1.018 billion, driven largely by increased rates on health insurance activities.

Net benefits or claims rose by $77 million to $852.2 million.

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