It's been a complicated 12 months for Medibank Private. The largest health insurance provider in Australia underwent a transformation last year when it decided to launch on the Australian Securities Exchange (ASX).
The newly privatised company will undergo another directional change as it looks to revitalise its brand image from an "expensive" health fund, The Australian reports.
According to the publication, Medibank will aim to reposition its brand, as consumer research shows some Australians are avoiding the insurance provider, considering it an expensive option. The same research also found the brand was strong in terms of trust and recognition, though this was not enough to meet the demands of many people who require low-cost health cover.
Medibank Private's Chief Executive, George Savvides, told the Macquarie Securities conference in Sydney the health fund is actually competitively priced – a factor for its ASX flotation in the first place – though the company aims to spread this message further in the coming months.
"In the next couple of weeks, you'll see Medibank, as we go into our June intense media campaign, with a new message coming through in television and billboard advertising, which is all about raising the awareness that we actually do drive into the sensitive price points," he explained.
Medibank shares in troubled waters
The brand revitalisation will also be part of a wider strategy to provide better dividends for shareholders. Medibank Private's share price has fluctuated and struggled to settle to a meaningful level for some time.
Last week signalled the first time that shares fell below the institutional offering price of $2.15. Despite the health fund's flotation being among biggest in the Australian Government's initial public offering (IPO) history, the share price dipped to $2.13 on 4 May, showing how difficult the second quarter has been for the newly privatised health insurance provider.
Medibank's so far short tenure on the ASX started strongly, reaching $2.22 on its opening day last November. Share prices even reached $2.59 in February, leaving retail IPO shareholders – who purchased the stock for $2 a share – with a paper gain of 29.5 per cent.
However, the recent slump will be a concern for the company and its investors, who might want the change in brand image to come into effect sooner rather than later.