Healthy people, healthier business: NZIER modelling estimates 3:1 return on workplace health insurance with Southern Cross
Supporting people to look after their health isn’t just good for employees. New economic modelling suggests it can deliver real value for New Zealand businesses too.
Research commissioned by Southern Cross Health Insurance from independent economic consultancy NZIER estimates around $3 in potential business value for every $1 employers invest in subsidised Southern Cross Health Insurance group schemes.
The modelled return reflects estimated reductions in three key areas: absenteeism, presenteeism and staff turnover.
Regan Savage, Chief Sales, Marketing & Customer Experience Officer, Southern Cross Health Insurance, says, “We were excited to see this independent research match up with what we hear from our customers. They tell us that when their people are healthier, everyone benefits.
“What the NZIER research gives us is a clearer picture of the potential business value of investing in your people’s health. For employers thinking about how they support their people, that’s a pretty compelling story: looking after your people can be good for them and good for business.”
Savage says, “We tend to focus on absence because it’s visible, but a bigger challenge can be people turning up when they’re unwell, run down or unable to work at their best. That’s not a personal failing. It’s often a sign that workloads, culture, expectations or access to care need some attention – and those are things leaders can do something about.
“Health insurance can be a strong foundation, making it easier for people to seek help earlier. But it works best as part of a connected system of support, alongside manageable workloads, good job design and supportive leadership. When people are healthier and better supported, the whole organisation is in a stronger position.”
About the ROI estimate
Return to employers was modelled on estimated reductions in absenteeism and presenteeism and a 10% reduction in staff turnover resulting from membership of a subsidised Southern Cross Health Insurance group scheme.
Cost to employers was modelled on an employer paying the average premium paid by employers per staff member in an employer subsidised Southern Cross Health Insurance group scheme as at October 2026 and includes the cost to employers of Fringe Benefit Tax.
Modelling was based on the following assumptions:
- the employee was earning the average full-time wage in NZ;
- the employee was taking the average number of sick days in NZ before becoming a member of the group scheme;
- presenteeism results in a 50% reduction in productivity; and
- a replacement cost for staff turnover equivalent to 75% of an employee’s annual wage.
