Macroeconomic Factors Affecting Medibank Private Ltd

Macroeconomic Factors Affecting Medibank Private Ltd 1
ANALYSIS OF THE MACROECONOMIC FACTORS AFFECTING MEDIBANK
PRIVATE LTD
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Macroeconomic Factors Affecting Medibank Private Ltd 2
Analysis of the Macroeconomic Factors Affecting Medibank Private Ltd
PESTEL Analysis
This analytical tool entails Political aspects, economic, social aspects, technological aspects,
environment as well as legal aspects that might affect Medibank Private Limited
macroeconomic environment (Fern Fort University 2018). Basically, PESTEL analysis offer
details information on the operating challenges the company would face in the prevalent
macroeconomic environment other than the competitive forces. In other words, PESTEL
analysis is important in analysing Medibank macroeconomic factors since it would assist the
company in assessing variations in macroeconomic environment aspects and how these
aspects could have direct impact on its as well as other players within insurance sector.
Furthermore, PESTEL analysis is also important for Medibank Limited to analyse some of
the macroeconomic environment which is more likely to shape its competitive and strategy
landscape. It offers details information on operating challenges Medibank is more likely to
face in the prevalent macroeconomic setting other than the competitive forces.
Political Aspects
Medibank operates in the insurance sector in over dozen nations and expose itself to
numerous types of the political system and political environmental risks (Medibank 2015). In
accomplishing success in the dynamic insurance sector actors numerous nations usually entail
diversifying systematic risks of the political environment in which the company operates in
(IBISWorld 2017). Medibank face some political impact risks whereby the varying tax
legislation, employment regulation and consumer protection force the company to adjust in
order to take advantage of the government expenditures (Fern Fort University 2018).

Macroeconomic Factors Affecting Medibank Private Ltd 3
The company would be affected by Private Health Insurance Rebates which is based on the
Tier System to determines the organization eligible for what to rebate based on their income
(Financial Review 2018). The Australian government move to introduce Lifetime Health
Cover by encouraging individuals to join the private health insurance earlier is also a move
that is likely to affect Medibank operations significantly (IBISWorld 2017). This move would
result in increased sales over the period. Another political aspect likely to affect Medibank is
foundation of Medicare Surcharge Levy which mostly aimed at encouraging high income
earners to acquire private health insurance instead of rely on public services. This move
would result in increased sales for Medibank.
Economic Aspects
The exchange rate for euros against other currency are a bit favourable in Australia, this
makes health insurance investment attractive option for different investors especially foreign
investors who are very keen to avoid losing any amount of cash in the exchange transaction
(IBISWorld 2017). With the high economic growth rate experienced in Australia, there is
relatively low level of risk for Medibank operating within the Australian economy since it
boasts constantly strong GDP growth, rising exchange rates, stable interest rates, low
inflation rate as well as significantly high employment (Fern Fort University 2018). In fact,
the relatively high level of employment means that Medibank is more likely to make
significantly huge sales in the country (Choice 2018). With increase in the aging population,
there is more need for medical services. This is likely to result in increased insurers in the
company and in turn increased sales.
Social Aspects