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Declining intentions to take out health insurance

Source: Roy Morgan Single Source (Australia), 12 months ended September 2014, n = 50,587; 12 months ended September 2015, n = 50,279; 12 months ended September 2016, n = 50,634; 12 months ended September 2017, n = 50,020; 12 months ended September 2018, n = 50,377.
Base: Australians 14+ who intend to purchase private health insurance in the next 12 months.
Over the next 12 months, 1.31 million Australians who currently do not have private health insurance intend to take it out. This represents the lowest number over the last five years and is down by 17.1% (from 1.58 million) or 270,000 from the intention level over the same period 12 months ago. The highest level over the last five years was 1.64 million intenders in 2015. 

This is one of the main findings from the latest Roy Morgan ‘Private Health Insurance Intender Profile Report’ September 2018. The data in this latest report represents some of the findings from Roy Morgan’s Single Source survey which is based on in-depth interviews conducted face-to-face with over 50,000 consumers per annum in their homes, including detailed questioning of over 8,000 with members of health insurance funds. The profile of intenders presented here is based on a sample of 798 interviews conducted in the 12 months to September 2018. 

Potential for growth in health insurance coverage


There are approximately 9.8 million Australians over 14 who do not have private health insurance and with 13.4% of them (1.31 million) intending to take it out in the next year, there is good potential to increase coverage. This will depend on the ability of funds to convert these intenders to members and ensuring that existing members are retained.

The following chart shows that despite the currently strong growth potential with 1.31 million intenders, the fact that this has declined from 1.58 million (down 17.1%) over the last year, is of some concern.

Private Health Insurance Intentions Next 12 Months - Number of Intenders (Will take out health insurance cover)


Source: Roy Morgan Single Source (Australia), 12 months ended September 2014, n = 50,587; 12 months ended September 2015, n = 50,279; 12 months ended September 2016, n = 50,634; 12 months ended September 2017, n = 50,020; 12 months ended September 2018, n = 50,377.
Base: Australians 14+ who intend to purchase private health insurance in the next 12 months.


Need to understand who the intenders are

In order to improve the chances of converting these health insurance intenders to fund members there is a need to understand in-depth who they are and what drives them.

The following chart shows that intenders are dominated by the under 35 age groups with 55.4%. The 14 to 24 segment is the largest group with 28.4%, followed by the 25 to 34 year olds with 27.0%. Both of these age groups are well over represented compared to their overall population share.

Males are also over represented among intenders, accounting for 54.6% well ahead of females (45.4%).

Private Health Insurance Intentions Next 12 Months – Age Profile of Intenders


Source: Roy Morgan Single Source (Australia), October 2017 to September 2018, n = 50,377.
Base: Australians 14+ who intend to purchase private health insurance in the next 12 months (Index 100 = Average Australian).


Understanding the interests and attitudes of intenders

There is a need to go beyond demographics for a greater understanding what drives these intenders by looking at their interests and activities. The full intenders report covers a great number of interests, activities and media for this segment, with only a few of what is available being illustrated here.

The following chart shows that there are a number of major differences from the overall population.

In terms of activities, these intenders are more likely to participate in jogging, gym/weight training, and basketball and agree that they ‘love to do as many sports as possible.’ On health issues, they have above average agreement on; ‘I avoid dairy foods whenever possible’; ‘I try to buy organic food whenever I can,’ and ‘I’m concerned about my sugar intake.’

Media consumption is a lot different to the Australian average with less newspaper readership, less commercial TV and less commercial radio. They love the internet as shown by the fact that they are above average on heavy internet usage.

Profile of Private Health Insurance Intenders – Health/Fitness/Media

Source: Roy Morgan Single Source (Australia), October 2017 to September 2018, n = 50,377.
Base: Australians 14+ who intend to purchase private health insurance in the next 12 months (100 = Australian population average).


Norman Morris, Industry Communications Director, Roy Morgan says:

“This research has shown that although intention levels for new private health insurance members have fallen over the last year, the fact that they remain high at over 1.3 million still represents great growth potential. The conversion of these intenders to become members is dependent on tailoring the product and message to the many different lifestyles, activities and attitudes that are illustrated in the full intenders report.

“The cost of health insurance is the main reason people do not renew their cover and is obviously a major reason that others do not take it out. We have also seen that the younger age groups are even less convinced that it is even necessary to have. Cost is a difficult objection to overcome unless it is accompanied by a message that shows a more holistic understanding of the target market.

“Data used in this release is only a small part of what is available from the full database that includes attitudes to health insurance, reasons for not renewing, intentions of existing members, brand preference, type of cover, lapsed membership etc. Data has also been collected over many years enabling valuable trended insights into this highly competitive market. To find out more ask Roy Morgan.”


For comments or more information please contact:
Suela Qemal, General Manager - Financial Services & Consulting
Office: +61 (3) 9629 6888
Suela.Qemal@roymorgan.com


About Roy Morgan

Roy Morgan is the largest independent Australian research company, with offices throughout Australia, as well as in Indonesia, the United States and the United Kingdom. A full service research organisation specialising in omnibus and syndicated data, Roy Morgan has over 70 years’ experience in collecting objective, independent information on consumers.

Margin of Error

The margin of error to be allowed for in any estimate depends mainly on the number of interviews on which it is based. Margin of error gives indications of the likely range within which estimates would be 95% likely to fall, expressed as the number of percentage points above or below the actual estimate. Allowance for design effects (such as stratification and weighting) should be made as appropriate.

Sample Size

Percentage Estimate

40%-60%

25% or 75%

10% or 90%

5% or 95%

1,000

±3.0

±2.7

±1.9

±1.3

5,000

±1.4

±1.2

±0.8

±0.6

7,500

±1.1

±1.0

±0.7

±0.5

10,000

±1.0

±0.9

±0.6

±0.4

20,000

±0.7

±0.6

±0.4

±0.3

50,000

±0.4

±0.4

±0.3

±0.2