WA health insurer HBF is planning to merge with a not-for-profit health fund on the east coast.

HBF, WA’s largest health insurer, says it is looking at a merger with Sydney-based HCF.

If the deal goes through, it would give the combined companies more than 2.5 million customers and total assets of $4 billion.

The combined firm would be Australia’s third largest health insurer, behind Bupa and Medibank Private.

HBF and HCF say they intend to retain their individual identities and management, but fall under a new umbrella company guided by a common board of 10 directors.

HBF chief executive officer John Van Der Wielen said his company would continue to provide policyholders with the best possible health cover.

“HBF is one of Western Australia's best loved brands but is much less recognised in other states,” he said.

“The merger would give us a truly national presence.

“This merger has not cost the members any money.

“It's a big deal where it's a merger of equals. HBF and HCF have the same aim in mind and that's to maintain their brands, look after members and reduce premiums.

“Putting two not-for-profit [health funds] together really makes us far larger, gives us better scale and will deliver better benefits to members in the future.

“Our premiums, we believe, will be more competitive than anyone else in Australia.”

HBF chair Tony Crawford said there is a very compelling case for the merger with HCF.

“In combining Australia's two largest not-for-profit health funds, this merger would bring together two companies with common values and a shared commitment to put members first,” he said.

“We wanted to be sure that under the terms of any merger the iconic HBF brand would be retained in WA.

“We also wanted to ensure our employees would be looked after and, crucially, HBF's not-for-profit status would remain, meaning we continue to put members first, not shareholders.”