Medibank sets out three-year turnaround targets

Craig Drummond has revealed his three-year targets for the insurer in his first major strategy update.

Craig Drummond during the Medibank AGM earlier this month. Picture: Aaron Francis/The Australian.

Medibank boss Craig Drummond has set three-year targets to turn around the insurer’s poor customer performance score in his first key strategy platform for the insurance giant.

Mr Drummond, outlining his strategy to investors in Melbourne today, reconfirmed that his performance, and that of his executive team, would be judged against the health insurance giant’s customer net promoter score, which he said the company was determined to improve.

Medibank has topped the list of customer health insurance complaints this year amid a drop in its market share, as it also fights a case against the competition regulator for allegedly misleading members.

Mr Drummond, an ex-NAB executive who took on the top job at Medibank in July, said today he had a relentless focus on delivering for customers.

He said he was not about to announce a large “step change” in strategy but he said Medibank needed to do a better job in its core business, as he outlined new three-year targets for the insurer. The three-year customer milestones include driving complaints to below its market share, improving its net promoter score to be best in class against its major rivals and stabilising its market share.

“I am not here to play the short game,” he said.

The chief executive said the company had to fix its customer pain points and get the basics right. He said he now had the right team in place, after a shake-up of the executive team, adding that he was building a culture of accountability.

He added he wanted to drive down call wait times to below one minute. They were as high as eight minutes when he joined the company.

Mr Drummond also said that the company had previously underinvested, particularly in the consumer segment, to drive future growth in the business but he added he planned to turn that around.

“I am shifting the focus from infrastructure to customers,” he said.

“It hasn’t been easy for customers to do business with us, this is about to change.

“The conversation I want to have in 12 months’ time is how we leveraged this work to be better than we have been before.”

Mr Drummond also said that the fundamental challenge in the health insurance industry was the growth in healthcare costs across the sector. He said while government reform had a role to play, it needed a collaborative approach from the sector to address the issues.