Medibank Private is searching for a new chief executive as it strives to retain customers and stop them downgrading cover amid rising costs.
George Savvides and the health insurance giant's board have agreed to bring forward his retirement by 15 months, with his departure in March to come just short of 14 years in the job.
Speaking at what was his first and last annual general meeting, Mr Savvides said customers are continuing to downgrade or cancel their health cover as it becomes less affordable.
Medibank's premiums have risen by more than six per cent in each of the past two years, slightly more than the industry average.
"The cumulative effect of the reducing government private health insurance rebate is adding to the affordability concerns consumers are feeling when it comes to their private health insurance policies," Mr Savvides said.
He acknowledged that retirees in particular are feeling the pain, and said reform is needed to allow capped premiums on products for those on fixed incomes.
But Medibank's main focus is on boosting its efforts to retain customers, primarily with different marketing strategies and new member rewards, such as discounts on gym visits.
The company also wants to reduce what it pays for healthcare, a stance that recently brought on a public spat with private hospital provider Calvary Health Care, as Medibank played hardball in new contract negotiations.
"You can be sure that we have learnt a little from that, and we will perhaps be tackling it a little differently in the future," chairman Elizabeth Alexander told shareholders.
But its tactics are paying off, with 150 new agreements struck with hospitals and health care providers, as Medibank seeks to make them more accountable for avoidable procedures and readmissions.
The insurer has also backed the federal government's review of the 5,700 medical services subsidised under Medicare, which the company expects will identify unnecessary or outdated medical procedures.
Despite customers reducing their levels of cover, Medibank is sticking with its full year financial targets, which includes growth of premium revenue above 5.5 per cent.
It will spend the next four months searching for a replacement for Mr Savvides, whose exit will come a little more than a year after Medibank's $5.7 billion privatisation.
"I firmly believe that now is the time to give a new generation of leaders the opportunity to build on the strong platform that now exists," the 59-year-old said.
IG market strategist Evan Lucas said Medibank's market leading position means it should not have problems attracting quality candidates, though the new chief executive will face several challenges.
"There is certainly an interesting point where they are going to have to fight off erosion rather than seek growth, so that's going to need somebody that is pretty strong and savvy around brand," he said.
Medibank shares closed six cents lower at $2.49.
