Bupa may make more than 100 members of staff redundant as part of a restructuring of its UK business, a spokesman confirmed this morning. A 90 day collective consultation process is underway in a bid to minimise job losses.
Financial results for 2009 released today show that the majority (63%) of the surplus achieved by the organisation was generated outside the UK, where customer numbers fell by 5% due to rising unemployment.
Bupa UK Membership, which has been renamed Bupa Health & Wellbeing UK, experienced a relatively stable number of claims but saw the cost of claims increase, reflecting rising medical inflation. The cost of cancer treatment has increased by almost 40% over the last five years, driven by a new generation of cancer drugs.
The results report released today warns that the business will need to be managed "carefully" in 2010 given the fact that recovery in the job market is likely to lag behind the pickup in economic growth in many of Bupa's markets. Cost-control measures introduced in 2009 included extended networks for cataract treatment and physiotherapy (strongly opposed by practitioners) and redundancies in its preventative and wellbeing division.
Bupa claims that the new UK insurance operating platform will "transform operational efficiency and enhance speed and flexibility of new product development" in 2010 and reported that it has already secured or extended contracts with a number of multinational companies, adding approximately 100,000 new customers in 2010.
Bupa International, which provides expatriate insurance, reported an increased surplus but a 3% decline in customer numbers.
Overall, Bupa's revenues were up 17% in 2009 to £6.94bn (57% of which was generated outside the UK), generating a before tax surplus of £416.5m, more than double that achieved in 2008. The underlying surplus before taxation was up 4% to £428.2m.
The post-tax surplus for the financial year was £300.8m, up from £112.4m in 2008. Private health insurance, care homes and other health services accounted for 74%, 13% and 13% of Group revenues, respectively.
Ray King, Bupa's chief executive, said: "In a year during which a number of our core markets were impacted by economic recession, the Bupa Group demonstrated its resilience by maintaining customer numbers, increasing surplus and repaying a significant amount of debt.
"The markets in which Bupa operates offer excellent opportunities for long-term growth, driven by customers' desire to access better healthcare. The global trends of ageing populations, rising affluence, the increasing incidence of chronic disease and advances in medical technology will drive demand for our services.
"Bupa is well positioned to take advantage of these trends given our geographic breadth, strong balance sheet, trusted brands and excellent market positions. We are investing in our portfolio in pursuit of organic growth and remain focused on delivering our strategy of helping customers live longer, healthier, happier lives."