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Medibank Private has boosted its annual profit by almost half to $417.6 million but the health insurer is losing customers and says it needs to provide better value so it can arrest a fall in its market share.

Medibank’s profit for the 12 months to June 30 lifted as its revenue from insurance premiums rose four per cent to $6.17 billion and claims paid out rose by just one per cent to $5.15 billion.

The private health giant said it had benefited from buying healthcare services more efficiently than in the past, a focus on management costs, and lower-than-expected hospital utilisation rates across the industry.

The company said the timing of elective surgeries may have been the reason why fewer people went to hospital in the first half of the financial year.

Despite the rise in profit, recently appointed chief executive Craig Drummond said the increase in premium revenue had been soft and was disappointing.

The number of policyholders at the close of the financial year was down 2.5 per cent at 1.80 million, from 1.846 million a year earlier, as customers found it harder to afford the increase in premiums and dropped their cover. Health insurers generally were also finding it harder to attract new customers.

More customers were switching insurers, and that had contributed to Medibank’s loss of

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