Southern Cross boosts surplus profits; Claims paid tops $1 bill

Southern Cross Health Society Group has posted a surplus of more than $50 million while also growing its membership numbers by more than 8500 and paying out more than $1 billion dollars in claims.

Thursday, September 16th 2021, 11:50AM

Nick Astwick.

The group, which is made up of Southern Cross Health Insurance, Southern Cross Pet Insurance, Southern Cross Insurance Services, Southern Cross Health Services and Southern Cross Ventures, has released its annual financial results, highlighting strong membership growth and the delivery of a solid surplus.

As of June 30 2021, society membership totalled 887,782, an increase of 8584 from the previous year.

The Society Group posted a surplus of $53 million at the end of the financial year, which included an operating surplus of $10 million, and $39 million primarily derived from investment income.

Society chairman Greg Gent says it was pleasing to see membership growth and a strong surplus, despite another challenging year due to the pandemic.

"We are all still operating in a climate of uncertainty and so we’re very pleased to have delivered such a strong result.

"It is precisely the overall outcome we aim for to ensure we maintain our financial strength, particularly important in these unpredictable times."

Gent says the strong investment income is the culmination of the last five years of the society’s investment activity and a well-optimised strategy but is not likely to be repeated.

"While this year’s investment income contributes funds to the group investment portfolio, which will give members confidence that the business has the means to pay future claims as it grows, such is the nature of investments that we do not expect our portfolio to repeat this performance every year."

In the last financial year, the society returned $1.099 billion in claims and received $1.256 billion in premiums.

For each dollar received in premiums, it returned 87 cents in claims to members, compared with an average of 62 cents in the dollar among other New Zealand health insurers (based on data provided by the Financial Services Council of New Zealand).

The business paid 73% of all private health insurance claims, significantly more than its 62% market share.

Society chief executive Nick Astwick says it's encouraging to see strong growth over the past year and put this down to a widespread focus by people toward managing their health and wellbeing.

"More people today are focusing on their health and wellbeing and seeking assurance that they are covered for unexpected events - which is the vital role health insurance plays."

Astwick says it is the fifth year in a row that the society has seen positive growth as it continues to evolve and deliver improvements and innovations to support the needs of members.

"In November last year, we launched, with our partner ProCare, virtual health consultation service CareHQ, and a new health insurance policy upgrade option - Cancer Cover Plus."

Astwick says the society also put in place hardship packages for members who are finding it tough due to recent covid lockdowns.

"Southern Cross was originally established to ensure New Zealanders had ongoing access to quality private healthcare. Today, that founding vision lives on in our not-for-profit business model and our commitment to a healthier future for our members."

Tags: claims insurance Southern Cross Southern Cross Healthcare