PHI Net margins defensive; Competition & downgrading persistent

Research evidence excerpt

PHI Net margins defensive; Competition & downgrading persistent

Equity Research

8 July 2026 | 1:33PM AEST

INSURANCE

In this note we highlight key focus areas for MPL and NHF heading into FY26 results Julian Braganza, FIAA

+61(2)9321-8487 |

next month. julian.braganza@gs.com

Goldman Sachs Australia Pty Ltd

n Recent Resident Industry PH growth remains strong but competition is Chris Matthews, FIAA

+61(2)9321-8370 |

persisting and impacting MPL/NHF’s PH growth relative to system: We think chris.matthews@gs.com Goldman Sachs Australia Pty Ltd

2H26 PH growth could be soft (relative rate increases v industry + disciplined

growth) and MPL/NHF’s FY27 PH growth outlook expectations will be key given

the competitive backdrop + changes to policy acquisition strategies.

n Broadly Stable MPL/NHF net margins possible into FY27 from FY26 with

levers available to manage net margins including a) expense ratio benefits b)

Adjustments to policy discounting and product benefits c) Margin benefits from

downgrading. The Apr-26 premium rate increases for MPL/NHF of 5.1% and

5.5% respectively are broadly supportive of margin & claims trends flagged by

MPL/NHF; albeit with levers to manage unexpected inflationary pressures.

Claims trends to Mar-26 suggest: Relatively benign utilisation trends on a paid

basis with some ongoing risk around hospital indexation.

n Neutral rated MPL: 1) Medibank health FY30 earnings growth targets

supporting group profit growth by ~2.5% p.a. 2) APRA capital return of $250m +

gearing optimisation presents M&A / Capital return upside 3) Reducing

Cybercrime costs. 4) Stable PHI net margins. 5) Group Margin/growth upside

from non-resident business 6) Neutral on relative valuation at 20x.

n Buy rated NHF with valuation at ~15x: 1) NZ recovery material driver of group