Global health care cost blamed
by Dionisia Tabureguci
Health insurance service provider, FijiCare Insurance Limited (FIL), maintained a declining trend of net profits despite a slight improvement in its trading figures and a steady dollar value to incurred claims.
Last month, FijiCare directors released the company's annual report, which showed the company's after-tax profit figure of F$182, 099 for the financial year ended December 31, 2004, a 27 percent drop compared to the same period in 2003.
Apart from factoring in the results of the company's new Medical Centre, which did not do too well in its first year, the low figures were attributed to external factors rather than bad business in a highly competitive local insurance market.
"The continuing rise in health costs worldwide was one of the major factors that affected profits," says managing director Peter McPherson.
"Net claims increased due to the cost of doing business overseas against the weakening Fiji dollar, the increase in administrative costs, the fluctuation in exchange rates, varying currency values as well as the increased price of reinsurance, were all attributing factors. FIL also experienced increases in cost for local doctors and pharmaceutical prescription drugs," McPherson adds.
These factors coincided with the company's review of its renewal portfolio and consolidation of its renewal base of business which resulted in FIL closing 2004 with a lower profit after tax, says McPherson.
The company 's metamorphosis into the near future began when it opened FijiCare Medical Centre in May last year.
FIL chairman Ross Porter says the Medical Centre was set up as an opportunity to expand business, introduce new products and services, as well as to attempt to control and minimise costs.
"Whilst the new Medical Centre has taken us longer than expected to settle into a stand alone profit centre, it has started to contribute to the better management of claims and will produce a good flow-on effect in future years, particularly in reducing potential fraudulent claims and improving the management of overseas evacuations," he says.
The new FIL that is set to emerge from the current changes would see it offering a wider range of products, including offering members alternative options to overseas medical hospitals for medical treatment. Porter is expecting a lot of future growth to be contributed by the Medical Centre despite its slow start.
"Plans to increase the Medical Centre's services to our policyholders and the public generally, are well underway. It is expected the centre will play a strong part in contributing to the group's overall growth and profitability in the future years," he says.
FIL declared a dividend of three cents per share during the year. But share price movement during the month was stagnant with no shares traded.
Health talk...FijiCare managing director Peter McPherson(closer to camera) and board chairman Ross Porter. Picture by Dionisia Tabureguci.
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NOTE: This article was published in the Fiji Business Magazine as: External factors dent FijiCare 2004 profit; p 7, October 2005 edition.
Fiji Business is a publication in the Islands Business International portfolio and sold only in the Fiji islands as an accompaniment to Islands Business Magazine.
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by Dionisia Tabureguci
Health insurance service provider, FijiCare Insurance Limited (FIL), maintained a declining trend of net profits despite a slight improvement in its trading figures and a steady dollar value to incurred claims.
Last month, FijiCare directors released the company's annual report, which showed the company's after-tax profit figure of F$182, 099 for the financial year ended December 31, 2004, a 27 percent drop compared to the same period in 2003.
Apart from factoring in the results of the company's new Medical Centre, which did not do too well in its first year, the low figures were attributed to external factors rather than bad business in a highly competitive local insurance market.
"The continuing rise in health costs worldwide was one of the major factors that affected profits," says managing director Peter McPherson.
"Net claims increased due to the cost of doing business overseas against the weakening Fiji dollar, the increase in administrative costs, the fluctuation in exchange rates, varying currency values as well as the increased price of reinsurance, were all attributing factors. FIL also experienced increases in cost for local doctors and pharmaceutical prescription drugs," McPherson adds.
These factors coincided with the company's review of its renewal portfolio and consolidation of its renewal base of business which resulted in FIL closing 2004 with a lower profit after tax, says McPherson.
The company 's metamorphosis into the near future began when it opened FijiCare Medical Centre in May last year.
FIL chairman Ross Porter says the Medical Centre was set up as an opportunity to expand business, introduce new products and services, as well as to attempt to control and minimise costs.
"Whilst the new Medical Centre has taken us longer than expected to settle into a stand alone profit centre, it has started to contribute to the better management of claims and will produce a good flow-on effect in future years, particularly in reducing potential fraudulent claims and improving the management of overseas evacuations," he says.
The new FIL that is set to emerge from the current changes would see it offering a wider range of products, including offering members alternative options to overseas medical hospitals for medical treatment. Porter is expecting a lot of future growth to be contributed by the Medical Centre despite its slow start.
"Plans to increase the Medical Centre's services to our policyholders and the public generally, are well underway. It is expected the centre will play a strong part in contributing to the group's overall growth and profitability in the future years," he says.
FIL declared a dividend of three cents per share during the year. But share price movement during the month was stagnant with no shares traded.
Health talk...FijiCare managing director Peter McPherson(closer to camera) and board chairman Ross Porter. Picture by Dionisia Tabureguci.
_____
NOTE: This article was published in the Fiji Business Magazine as: External factors dent FijiCare 2004 profit; p 7, October 2005 edition.
Fiji Business is a publication in the Islands Business International portfolio and sold only in the Fiji islands as an accompaniment to Islands Business Magazine.
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