The health society reported a loss of $13.3 million in the year to June.
It follows a surplus of $6.2m the previous year.
Policy-holders had average premium rises of 6% int he past year, and the society expected a similar increase over the 2019 financial year.
Premium income was up 7% to $987.7m and claims up 9% to $906.6m.
Southern Cross is a not-for-profit owned by its policy-holders.
Chairman Greg Gent said it returned 92c in claims for every $1 received in premiums.
“The average rate of return among the other New Zealand health insurers is just 65c in the dollar; with some returning as little as 59c in claims for every dollar received in premiums.”
He said the society’s last loss was in 2014.
“It’s important to note that, as a not-for-profit friendly society, the income statement tells only a small part of the story about our business’ stability. In fact we only ever aim to make a small surplus, and we set your premiums accordingly, in order to continue delivering the best value for money to you over the long term.
“This deficit represents 1.3% of premium income this year so in that context it’s something we’re comfortable with.”
Southern Cross is 62% of the health insurance market and pays 74% of claims. It has 867,592 members.
Chief executive Nick Astwick said it was working to moderate costs in a changing environment.
“Like every other health insurer, we are dealing with health inflation consistently outstripping the general inflation rate. We know premium increases are a concern and we work hard to contain growth in costs.
"Advisers won’t see any change in approach as a result. We continue to see them as a valuable channel.”
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