What is a for-profit insurer?

About for-profit insurers

A for-profit insurer focuses on returning profits to shareholders from premiums paid by members after it has:

• covered operating costs
• paid benefits to members
• set aside additional capital to ensure a very high likelihood of being able to pay future benefits to members.

Every for-profit insurer in Australia is an open insurer so anyone can take out a policy with a for-profit insurer.

How many for-profit health insurers are there in Australia? 

In Australia, there are 8 private health insurers that operate on a for-profit basis.

Most of these funds are members of Private Healthcare Australia.

Are for-profit insurers more expensive than not-for-profit insurers?

For-profit insurers are not necessarily more expensive to join than not-for-profit insurers.

This is because the price of health insurance is affected by:

• the level of cover you choose
• how well the fund is managed
• how competitive the insurer’s products are in the market, for example, a large for-profit insurer with many members and a streamlined corporate structure may offer cheaper policies than a not-for-profit insurer.