HBF seeks alliances to avert disaster
Perth-based health insurance firm HBF is formulating a strategy to offer other forms of financial services to its more than 900,000 members and customers through strategic alliances.
The boldest corporate move in its 60-year history is borne out of necessity, with the mutual group’s board identifying a pressing need to diversify and subsidise the growing losses being incurred by the organisation’s flagship hospital cover operations.
“The board has identified that with the ageing of the population, we need to diversify and are going to have to have alternative sources of revenue,” HBF executive John LeCras says.
These new sources of revenue are yet to be decided, but will most likely be achieved through alliances with companies already operating in the financial services space, LeCras says.
The organisation is “shaking the tree” at the moment, although LeCras says the group will remain measured in its assessment and will not be seeking outlandish joint ventures.
“We will certainly not be selling used cars to members. The key thing is to provide benefit to our members and therefore any joint venture will have to be a good cultural fit,” he says.
The group has projected that over the next 20 years, the benefits to be paid to members aged between 70 and 74 years will blow out from below $50 million to more than $330 million.
HBF was formerly the Hospital Benefits Fund and traditionally offered its members both hospital and ancillary insurance cover.
“We already regard ourselves as being in financial services, as we underwrite general insurance in the areas of home, car and travel insurance.”
According to LeCras, the mutual group is the fourth biggest provider of home and car insurance in Western Australia and the leading provider of travel insurance.
“The biggest driver behind the push to diversify is that we, along with other health insurance providers, will face enormous challenges over the coming years as the population continues to age.
“The key thing to understand is that we are very committed to being and remaining a mutual structured organisation and that any initiative we undertake will be in members of the group’s best interests,” LeCras says.
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