News

Southern Cross Health Society (Society) reported significant membership growth at its Annual General Meeting (AGM) last week, reflecting the increasing prioritisation of health among New Zealanders.

This growth comes amidst ongoing inflationary pressures contributing to rising costs in healthcare.

The Society welcomed a net increase of 31,929 new members in FY23, bringing the membership to 940,105. This is its eighth straight year of growth and the highest membership since 1992.

Southern Cross Health Society CEO Nick Astwick told meeting attendees this growth shows the value New Zealanders continue to place on their health.

“We are well on our way to one fifth of all New Zealanders having health insurance with us to support them to live well for longer. We are also encouraged by the number of new business customers investing in their people, with 223 new businesses joining us this year. As a consequence, they are investing in New Zealand’s productivity,” he said.

Astwick highlighted the market leading rate of return to members, with more than 88 cents in the dollar returned in benefits paid to support members’ healthcare.

“The average rate of return among other New Zealand health insurers is 66 cents in the dollar. To provide more context, if Southern Cross paid only 66 cents in the dollar, we calculate we would have paid out around $327 million less in claims.

“Over the year we paid out $1.295 billion in claims from $1.466 billion received in premiums. While we make up 60 per cent of the health insurance market, we pay 72 per cent of the value of all health insurance claims paid in Aotearoa New Zealand. This is the Southern Cross difference.”

Chair Murray Jordan told attendees that the Society delivered on its promise of the previous year to deliver lower than otherwise expected premium increases by utilising some of the surplus delivered in FY22.

“A key focus for Board is to keep the level of premium increases as low as possible for members, and we delivered on our promise to use some of the surplus reported in the year before for this purpose. The Society’s base level premium increase last year was five per cent.”

Jordan noted that due to the ongoing high inflationary environment, and high volume of claims, there is no escaping that premium levels will have to increase in the current year.

“A high inflationary environment raises the cost of healthcare, so the cost of claims is higher. We’re also seeing a higher volume of claims. While on one hand this is good because it means members are receiving the care they need to be well, this does contribute to increased premiums.”

Jordan added that the Society remains focused on keeping the level of premium increases as low as possible in the current year, and consequently expects to report a deficit again in FY24.

Resolutions voted on by members at the AGM included Dr Martin Misur’s re-election as a Director of the Society and the appointment of Chris Black as Trustee, replacing Catherine Drayton who retires at the end of 2023 after four years of service as Trustee and 10 years as Director of the Society Board.

Members also passed a resolution to appoint Nagaja Sanatkumar as Director. Sanatkumar replaces Catherine Drayton on the Society Board.

Nagaja Sanatkumar is a professional non-executive director with 25 years’ international executive and leadership experience growing consumer-facing businesses through technological innovation, operational excellence, and organisational scale. For more information, please see below.

The Society AGM was a hybrid meeting, with members attending virtually as well as in person at the organisation’s head office in Fanshawe Street, Auckland.