Value and Affordability a key focus at Southern Cross Health Society AGM
Southern Cross Medical Care Society held its Annual General Meeting in Wellington yesterday. Its Chairman Greg Gent and CEO Nick Astwick highlighted the organisation’s financial performance in the financial year ended 30 June 2018 and its focus on value and affordability.
For every dollar received in premiums last year, 92 cents was paid out in claims, said Mr Gent. “This level of claims payment represents outstanding value for members.”
The average pay-out ratio among the other health insurers in New Zealand was 65 cents in the dollar with one for-profit health insurer paying out just 59 cents in the dollar. “If we applied that ratio to our premium income, we would have paid $323 million less in claims.”
While the Society’s market share remained at 62 per cent, it paid 74 per cent of all health insurance claims.
Claims costs rose nine per cent during the year under review, while premium income rose seven per cent. This led to a deficit of $13.3 million. The Society aims to achieve a modest surplus each year, targeting a claims payment rate of 89 cents in the dollar in order to maintain solvency. It will look to do so again this year, added Mr Gent.
Mr Gent noted the not-for-profit Friendly Society’s reserves remain healthy – with $397.3 million in net tangible assets, representing approximately 5.2 months of claims. It also retained its Standard and Poor’s A+ credit rating.
Meanwhile membership had continued to grow, reaching more than 867,000.
“Eighteen months into his role as CEO, Nick and his team are delivering a strategy to ensure the future relevance and sustainability of the Health Society,” commented Mr Gent.
In an overview of that strategy, Mr Astwick said the Society is focused on living up to its purpose of empowering Kiwis to live their healthiest lives. As part of this, he is leading the transformation of the business into a contemporary organisation, giving Kiwis assurance about their health and wellbeing. Mr Astwick also spoke about the importance of working alongside healthcare providers to continue offering excellent value to members.
In other business, members re-elected Mr Gent and Roger France as Directors and Elizabeth Hickey as a Trustee.