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Southern Cross Health Society membership reaches 31-year high

Friday , 29 September 2023 by Sherryl Arneil

Southern Cross Health Society Group (“Group”) today released its annual financial results, reporting its largest membership since 1992.

Southern Cross Health Society (“Society”) is a not-for-profit Friendly Society and New Zealand’s largest health insurer. The Society’s membership grew to a total of 940,105 after growing by nearly 32,000 net new members over the past year.

Southern Cross Health Society CEO Nick Astwick said, “This continued membership growth, in the face of challenging economic pressures, shows New Zealanders are prioritising their health and wellbeing. They are seeking assurance they can access care when they need it.

“This year we have also seen exceptional growth in the number of businesses joining us, with 223 new businesses investing in health insurance for their employees this year. This shows they care about the wellbeing of their people and want to support them in staying healthy and productive.”

Astwick said the Society has once again demonstrated exceptional value for this growing membership.

“For every dollar paid in premiums over the last financial year, 88.4 cents was returned to members in claims,” he said. “The $1.30 billion paid out in claims from $1.47 billion received in premiums represents the Southern Cross difference.”

“While we make up 60 per cent of New Zealand’s health insurance market, we pay 721 per cent of the value of all health insurance claims paid in Aotearoa, and we work hard to add even more value for members. We’re passionate about ensuring members can proactively enjoy better health all year round with access to complimentary services that help them identify any health issues and address them quickly,” he said.

Those services include unlimited virtual GP consultations via telehealth service CareHQ, three mental health consults through Raise, and an annual check-up with MedPro.

“We had more than 20,000 members access virtual GP appointments through CareHQ this year; more than double the previous year. The benefits of those consults is two-fold – they help alleviate pressure on the country’s busy general practices, and also allow people to quickly get healthcare if their usual GP isn’t available.”

The Health Society Group worked to keep premium increases lower this past year by using some of the $90 million surplus reported in FY22.

“We were successful in this and, as indicated, we’re now reporting a deficit for the Health Society Group of $16.5 million in FY23,” Astwick said.

“Our team remains committed to keeping premium increases as low as possible, however we do expect those increases to be higher in the coming year. The inflationary environment still buffeting New Zealand has also impacted the Society, particularly through the increasing costs of providing healthcare.

“Premiums are also affected by the rise in the volume of claims we’re receiving, and our need to increase the level of our capital reserves to meet the new RBNZ (Reserve Bank of New Zealand) interim solvency standards. We are also investing in our systems to ensure they are future-proofed, and we’re looking after our people, so they in turn can look after members.”

Astwick said the Society is still working to keep the cost of claims down through its Affiliated Provider programme.

“This programme has saved an estimated $115 million over the past five years, which would otherwise have contributed to even higher premiums.”

Astwick said the Society is acutely aware of the financial pressure on members.

“We know many New Zealand households are doing it tough right now as the cost of living continues to bite. It’s important to keep supporting our members’ wellbeing during these challenging times, which is why we strive to identify and action efficiencies and cost savings where we can. We will always do our best to keep premium increases as low as possible.

“We encourage members to use the new ‘manage my cover’ tool inside the website version of MySouthernCross which shows what premiums may look like if a member decides to change their plan or add an excess.”

Astwick finished by saying, “Good health is priceless and it’s clear New Zealanders are putting their wellbeing first. Focusing on staying well means less medical intervention down the track, with subsequent benefits of reduced pressure on our wider healthcare ecosystem and increased productivity in the workplace.

“We are privileged to play the extensive role we do in helping New Zealanders face the future with more confidence and we’re thankful for the opportunity to be with nearly one million members on their health journey.”

Snapshot figures – FY23

  • 940,105 members - net increase of 31,929 from last year
  • Our largest membership since 1992
  • Southern Cross Health Society Group deficit of $16.5 million
    • $44 million operating loss
    • $29 million gain on investment returns
    • The Society’s subsidiary investments (including Southern Cross Pet Insurance Ltd and Southern Cross Travel Insurance Ltd) reported, in aggregate, a $5.4 million deficit
    • The remaining balance relates to intergroup transactions which eliminate on consolidation
  • $1.295 billion in claims paid out of $1.466 billion received in premiums
  • Out of every dollar received in premiums, 88.4 cents was paid in claims, compared to an industry average of 65.9 cents2
  • We make up 60% of the health insurance market3
  • We paid over 72%4 of the value of all health insurance claims paid in Aotearoa New Zealand
  • Standard and Poor’s A+ financial strength rating
  • In the year ended 30 June 2023, the Society paid more than three million claims, including:
    • 293,204 surgical procedures (up 14.3%)
    • 568,768 specialist consultations (up 9.4%)
    • 620,533 prescriptions (up 7.1%)
    • 729,846 GP visits (up 15.5%)

1 Southern Cross makes up 60.1 per cent of the health insurance market. Based on data provided by the Financial Services Council and including estimates for nib and Partners Life.

2 Excluding Southern Cross

3 Southern Cross Medical Care Society makes up 60.1% of the health insurance market. Based on data provided by the Financial Services Council and including an estimate for nib.

4 Southern Cross Health Society pays over 72% of the value of all health insurance claims paid in New Zealand. Based on data provided by the Financial Services Council and including an estimate for nib.