Medibank Private Limited's FY26 results contain a detail that matters more to the distribution side of health insurance than the headline profit figures: the country's largest private health insurer cut what it pays aggregators, at the same time as it leans harder into an owned-care ecosystem designed to keep customers from shopping around in the first place.
For a distribution channel that has spent the past few years growing its share of the market, that is a signal worth reading closely.
Nationally, comparison platforms have been taking a larger share of health insurance sales each year. Figures from the Private Health Insurance Intermediaries Association put nearly one in three policies sold in 2024-25 through its member platforms, including Compare Club, Compare the Market and iSelect, a rise of 23.8% on the year before and a jump to 28.6% of all referred policy sales nationwide.
Medibank's own FY26 numbers move in the opposite direction. Resident sales commissions fell to $39.3 million from $46.6 million, a drop the insurer attributed directly to fewer aggregator-sourced joins at ahm, its budget brand and the one most exposed to comparison-site traffic.
Direct joins at ahm rose to 51% of new business, up from 47% in FY25 and 46% at the half-year mark, while ahm's overall acquisition rate fell 130 basis points to 17.3%, a decline the insurer attributed to reduced aggregator activity, partly offset by direct sales. Medibank said it partly reinvested the $5m saved on commissions into marketing aimed at bringing customers in directly instead.
That shift away from aggregator spend sits alongside a second, related move: Medibank is building a suite of services designed to make customers less likely to leave once they've joined, which is the same pool of switchers that aggregator platforms depend on for revenue.
Live Better membership, the insurer's rewards and wellness programme, grew 11.6% to 1.039 million participants who claimed $48.6 million in rewards over the year. The group's primary care network, including the newly acquired Better Medical clinics, delivered 4.13 million GP consultations, and Medibank said 57% of resident policyholders were now engaging with some form of health and wellbeing offering.
Medibank's lapse rate did rise, up 40 basis points to 10.5% across the group, but the insurer said it expects this to have performed better than the rest of the industry, attributing the outcome to the value customers place in its differentiated products and broader health proposition rather than price alone. If that holds, it points to a strategy where switching behaviour is increasingly shaped by service bundling rather than premium comparison, which is precisely the lever comparison sites are built to exploit.
nib Holdings is pursuing a comparable diversification strategy, reporting that its adjacent business lines, including its Health Services arm, delivered their highest first-half underlying operating profit since FY19.
The insurer credited that result to a continued recovery in New Zealand, strong performance in international health insurance, and profitability within Health Services, with its international portfolio specifically citing policyholder growth through Pacific Australia Labour Mobility participants, temporary graduates and skilled workers.
Whether that growth reflects a similar move away from intermediated channels is not something nib has disclosed, but the underlying strategy of diversifying earnings beyond core underwriting mirrors Medibank's own direction.
There is also a structural dimension to Medibank's model that goes beyond commissions. Insurance Business has reported that Medibank now owns or holds stakes in more than 160 GP clinics nationwide, while Bupa, which currently operates 33 medical centres, has flagged plans to expand to 130 within three years.
Doctors interviewed for that coverage raised concerns that referral pathways sitting inside the same corporate group that funds the care could reduce patient choice, a concern that sits alongside, rather than instead of, the commercial logic of building customer stickiness through owned primary care.
The Australian Medical Association and Catholic Health Australia have called for a dedicated regulator to oversee insurers moving into clinical service delivery, arguing existing oversight from APRA, the ACCC and the Private Health Insurance Ombudsman is too narrow.
Federal Health Minister Mark Butler has said the government has no plans to allow private health insurers to move into general practice services, adding that "any move by insurers into GP services would be a significant change to Medicare and is not being considered," while allowing that insurer investment in "prevention and complementary services" remains acceptable within Medicare's rules.
Medibank Health, the group's non-insurance division, posted segment profit growth of 31.3% to $100.7 million for FY26, now representing roughly 12% of group operating profit, while Health Insurance operating profit grew a comparatively modest 3.8% to $769.8 million on a gross margin held flat at 17.0%.
Underlying NPAT for the year reached $636.8 million, up 2.9%, with a fully franked final dividend of 10.9 cents per share taking the full-year payout to 19.2 cents.
Medibank's FY27 outlook points to segment profit growth of approximately 25% for Medibank Health and further acquisitions in primary care and wellbeing.
The group's mergers and acquisitions activity, including the Better Medical purchase, has been funded from existing capital rather than new debt or equity raising, according to the results.
Medibank's FY27 outlook also points to resident policyholder growth pursued "in a disciplined way," with resident PHI gross margin expected to hold broadly steady.
Whether the strategy behind that discipline, less reliance on commission-based distribution and more investment in owned care that keeps customers inside a single ecosystem, becomes standard practice across the sector, or stays a Medibank-specific bet, is likely to shape how much of the health insurance market comparison platforms and intermediaries can continue to reach.
