Medibank Names Former National Australia CFO Drummond as CEOby
Drummond to take over July 4 after George Savvides retires
He faces slowing premium growth, regulatory uncertainty
Drummond, 55, will take over on July 4, Medibank said in a statement to the Australian stock exchange Tuesday. Chief Operating Officer David Koczkar will serve as acting CEO from April 1 when the incumbent, George Savvides, retires, it said.
Drummond, who left National Australia on March 15 after spending just over two years as CFO, is taking the helm as the nation’s largest health insurer grapples with slowing premium growth and regulatory uncertainty. In an investor presentation last month, Medibank highlighted moderation in premium growth and a drop in volumes, while the government is undertaking a review to improve the effectiveness of the health insurance sector.
Drummond “brings with him deep experience in regulated service industries requiring a strong customer focus,” Medibank Chairman Elizabeth Alexander said in the statement.
He helped oversee the sale of almost all of National Australia’s underperforming businesses, including its U.K. unit. He was also behind Australia’s largest ever rights offering and along with National Australia CEO Andrew Thorburn refocused the lender toward Australia and New Zealand.
Australia provides its citizens with free or subsidized health care at clinics and hospitals through government program Medicare. It also encourages people through tax benefits to take out private health insurance through companies like Medibank.
About 47 percent of Australians were covered by private insurers for hospital treatment as of Dec. 31, while 56 percent were insured for other services such as dental and optical, according to the Australian Prudential Regulation Authority.
Medibank, owned by the federal government till October 2014, was listed via an initial public offering. It is valued by the market at A$7.8 billion ($5.9 billion), having risen more than 30 percent since the IPO in November 2014 compared with a 5 percent decline for the benchmark S&P/ASX 200 Index.
Prior to joining National Australia, Drummond led Bank of America Merrill Lynch in the country for four years. He was CEO of Goldman Sachs JBWere before that, according to National Australia’s website.