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Member growth and innovation to cement Southern Cross Health Society’s strong position

Southern Cross Health Society’s strong financial position stands the organisation in good stead as it continues to grow, outgoing Chairman Greg Gent announced at the organisation’s Annual General Meeting (AGM) in Auckland on Tuesday 7 December.

“Despite the backdrop of the pandemic, and the uncertainty that New Zealanders have been living and working with, I’m pleased the Society has managed operations and finances well to deliver a strong result this past financial year, and withstand and meet head on the continued challenges presented by COVID-19,” said Mr Gent.

The Society is part of the Southern Cross group, comprised of independent health and insurance-related businesses that share a not-for-profit ethos.

The Society enjoyed its fifth consecutive year of membership growth, welcoming more than eight and a half thousand net new members. At the end of the financial year, membership numbers were 887,782 – the highest in 13 years.

The Health Society group reported a surplus of $53 million. Of this, $10 million is an operating surplus, and $39 million is from income received from investments. While this year’s investment income provided the organisation with a very strong result, it doesn’t expect to see such a strong surplus every year, given the nature of investments.

Southern Cross Health Society CEO Nick Astwick told the meeting that despite some turbulent and uncertain circumstances during the last financial year, the Society was fortunate to come through it in a positive position.

“In our milestone sixtieth year, we continued to deliver for our members and gain good ground, which is testament to our strong foundations and successful navigation of the COVID-19 pandemic, and we want to keep that going.

“There is no question the Society must continue to innovate and we are deeply committed to piloting new healthcare initiatives and outcome-based care in the pursuit of better value choices for our members,” he added.

Mr Astwick also told the AGM that the Society’s foundation as a responsible business meant its very structure was designed around delivering value to members.

“This remains at the core of what we do and what we stand for. For us at Society, we strive for an authentic approach to responsible business by actively promoting health and wellness, promoting equality, diversity and inclusion, caring for our planet by actively contributing to a sustainable future, and partnering with others to achieve the greatest positive impact on our communities and the health and wellbeing of New Zealanders.”

As part of the Southern Cross group, the Society has joined forces with Pause Breathe Smile and the Mental Health Foundation to help Kiwi kids navigate life’s ups and downs. Pause Breathe Smile is a mind health initiative for children aged five to 12, and is supported by all Southern Cross businesses but is funded outside of the Society through a sponsorship agreement with Southern Cross Healthcare.

After serving the Society Board as Chair for the past six years, and three years before that as Director, Greg Gent retired. The new Chair will be Murray Jordan, who has been a Society Board Director for two years. Mr Jordan was also appointed Trustee at the AGM*. Mr Gent remains Chairman of the Southern Cross Health Trust Board.

Mr Astwick acknowledged Mr Gent’s contribution to the Society Board. “On behalf of us all at Southern Cross, I would like to express our sincere thanks to Greg for his outstanding leadership of our Board, and my personal appreciation for his guidance and wisdom while I’ve had the privilege of working with him,” he said.

*The remaining resolutions voted on by members at the AGM included Roger France’s re-election as Director and re-appointment as Trustee. Chris Black and David Bridgman were also appointed as new Society Board Directors to replace Greg Gent and Keith Taylor who both retired. Resolution six (relating to an increase in Director remuneration for the first time in four years) was withdrawn. Excluding proxies, it did not receive the level of support that, as a member-driven organisation, the Board was comfortable with. The resolution will be revisited at the next AGM.

Snapshot figures – FY21

• Southern Cross Health Society Group surplus of $53 million

o Operating surplus of $10 million

o $39 million primarily derived from investment income

• For every dollar received in premiums, Southern Cross Health Society returned 87 cents in claims

• Total members 887,782, up 8,584 from the previous year

• $1.256 billion premium income1

o up 6.3% on the previous year when normalised for COVID-19 impacts in FY20

• $1.099 billion total claims1

• 62% of the health insurance market but pay 73% of claims2

• Group investments generated $39 million of income, with total investments at $571.4 million3

• Standard and Poor’s A+ financial strength rating

ENDS

[1] Health Society only

[2] Based on data provided by the Financial Services Council of New Zealand

[3] This does not include investments in subsidiaries such as Southern Cross Pet Insurance