Royal & SunAlliance is poised to push into the health insurance market with the impending launch of a new product, industry sources say.
The insurer had looked at entering the market in tandem with the country’s largest health insurer, Southern Cross, but has now decided to go it alone.
Previously Southern Cross and RSA worked together in the workers' compensation insurance market with a joint venture Fusion. That came to an end after the Government returned the market to a monopoly through Accident Compensation.
Royal & SunAlliance was not immediately available for comment about its plans.
But industry players are expecting its product to be launched within months.
The move comes as Southern Cross battles to overcome public fall-out from a claims-payment fiasco, the resignation of its chief executive Roger Bowie and premium rises.
It also comes at a time when brokers are reporting increased inquiries, particularly from companies wanting to review options for their staff health insurance schemes.
Sylvia Calnan, a director of Medical and Health Insurance Brokers, says publicity about Southern Cross’s problems and premium increases of about 15% have prompted some corporates to find out what else might be on offer.
Calnan says there are good alternatives to Southern Cross, including policies offered by Sovereign, AIA, Tower and Club Life.
For individuals, AIA and Tower have specific policies that will cover many pre-existing conditions after three years, she says.
For corporate schemes, the alternatives are much broader because many insurers will cover most pre-existing conditions on a group scheme.
Brokers say that other insurers might also work out cheaper than Southern Cross because of different age bands used to set premiums.
For example, a family where the father is aged 38, the mother is 33 and the three children are under 14 would pay about $116.58 a month for Southern Cross’s Hospital and specialist policy, once an expected 15% premium rise comes into force.
On a similar policy from AIA they’d pay $86.75, or $99.31 if there were pre-existing conditions.
However, for people aged over 45 Southern Cross could work out cheaper, brokers say.
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