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Bupa faces potential £250 million loss after Chilean Supreme Court ruling

By Nithya Bose in UK Business News, posted August 4, 2023

Healthcare giant Bupa is bracing for a hit of nearly £250 million following a Supreme Court case in Chile that has risked its operations in the country.

The court ruling, issued last year, declared Bupa's practice of setting health insurance premiums based on gender and age unconstitutional.

The company is mandated to compensate all affected customers.

This ruling has also affected other healthcare firms operating in Chile.

A preliminary evaluation by Chilean health authorities found Bupa's subsidiary, Isapre Cruz Blanca, could face repayments amounting to £229 million under the draft legislation.

This is a figure Bupa fears may increase over time due to uncertainty.

Bupa warned there was “inherent political and regulatory uncertainty surrounding the implementation of the Supreme Court judgement.”

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It said: “Depending on the outcome of the current uncertainty, [the judgement] could result in material liabilities arising and material ongoing losses within the Isapre business.”

Bupa increased its provision for repayments from £100 million to £160 million, although the “final impact is likely to differ materially from this value.”

The deadline for implementing a new policy for setting insurance premiums has been extended to November 2023.

Chile is one of Bupa's largest markets outside the UK, contributing over £1 billion in annual turnover.

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