SX has advisers in its sights

Southern Cross expects to be selling its health insurance policies through financial advisers by the end of the year, chief operating officer Mike Ashby says.

He says brokers will be an important add-on to its own sales force.

"We are working through issues of implementation and are talking with broker forums to identify how we should go about it."

The insurer will also overhaul its product range, and will offer loyalty and low-claims bonuses to soften the blow of impending premium hikes.

In February Southern Cross indicated premiums will rise by an average of 16-17%, however Ashby says that figure is now out of date. He declined to give another, saying the increase hadn’t yet been finalised.

Under the revamp younger customers will pay less while older ones will pay more. As a result, Southern Cross will reduce competitors’ ability to undercut its prices in the 18-45 age group.

Southern Cross will announce the new premium structure next month.

Customers will also be sent information about the firm's 13 health plans, so they can decide which one "best fits their budget", Ashby says.

The insurer has been able to consider the discount schemes thanks to the flexibility of its new back office system, Diamond, the same system that last year caused long payment delays while it was being installed.

Southern Cross’ existing Star Advantage loyalty programme will be rolled into the new schemes.

The insurer also intends to fully exploit the flexibility of its new back room system, so it can develop new products and refresh existing ones, he says.

"We’re taking a fundamental look at our range and will move to more of a portfolio approach. There’ll also be a lot more innovation in our corporate HealthWorks brand," he says.

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