Southern Cross records $35m surplus

Southern Cross added 9000 members over the past financial year, it has revealed with its annual financial results released today.

Thursday, September 15th 2016, 6:00AM

by Susan Edmunds

Peter Tynan

The health society had 820,469 members at the end of the 2016 year. The number of elective surgical procedures it covered increased by 10% and reached 200,000 for the first time.

Southern Cross has 61% of the New Zealand health insurance market and funds 71% of the country’s health insurance claims.

Over the year, the society received $871 million in premiums, up 6.4% year-on-year and paid $749m in claims, up 1.4% year-on-year. For every dollar of premium income received, the society paid out 86c.

Southern Cross Health Society chief executive Peter Tynan said the growth in members was pleasing as the society’s focus was on organic growth and retention.

It recorded a surplus of $35 million in the financial year. This will be used to mitigate future premium increases, to improve services and to maintain reserves at appropriate levels.

“Because we don’t have to pay dividends to shareholders, here or overseas, any income not used to fund healthcare services is used for the benefit of members – either expanding policy coverage, improving services, strengthening reserves or running the society,” Tynan said.

“However, our key concern remains the rising cost of medical treatment and how we deliver value to our members in this environment.”

In the past year the business has continued to grow its Affiliated Provider programme – Southern Cross’ vehicle to mitigate medical inflation where specialists and providers provide healthcare services at agreed prices – to the point where it now accounts for over 50% of all claims costs.

“We want our members to make the best use of their policies– one way of doing this is by making the claiming process as easy as possible. We believe we’re on the right track as 71% of all claims received are now done electronically,” Tynan said.

Tags: Southern Cross