Health insurance premium rises are starting to fade: NIB

The steam may be finally running out of the fast-paced rise in health insurance premiums of the past decade, with one of the nation's largest insurers seeing the level of 'claims inflation' nearly halve over the past year.

NIB chief executive Mark Fitzgibbon said on Wednesday the slowing trend of cost increases encountered by health insurers that was seen over the past year has continued.

For his company, claims inflation fell to 2.9 per cent in the year to June, well below the expected rate of closer to 5 to 6 per cent. For the year ahead, that is seen moving to between 3 and 5 per cent.

"We've seen a decline in claims inflation," Mr Fitzgibbon told shareholders at the company's annual meeting on Wednesday. "Last year it was a tick under 3 per cent and this year it will be 3 to 5 per cent but so far it is more towards 3 per cent than 5 per cent. That's good news for potential premium increases."

The broad theme affecting the industry is the increasing unwillingness of government to fund rising health costs, he said. And that will continue.

"The industry is not clear why claims inflation fell last year," NIB chairman Steven Crane told the meeting. "It is hard to clarify what happened. Some people said it may have been due to the World Cup, but then it continued. That was one hypothesis ... and it stayed down."

He suggested that the public debate about rising health costs and health insurance premiums has "had an effect on the way people go to their doctor and surgeons".

"We have to submit our pricing (proposal to the government) now. It is announced in April. We can't assume it will be 6 to 7 per cent," he said.

Also staying the hand of health insurers is the declining affordability of health insurance as policyholders reduce the extent of their coverage to limit price rises.