Southern Cross $10.7m surplus

Media release from Southern Cross:

Southern Cross Health Society posts $10.7m surplus on strong performance

Southern Cross Health Society has today released its annual financial results, posting a surplus of $10.7 million for the year ended 30 June 2019.

New Zealand’s largest health insurer, Southern Cross Health Society paid out $963.7 million in claims, up six per cent on the previous year. At 73 per cent of all private health insurance claims, the business paid out significantly more than its 62 per cent market share.

In the last financial year, the Health Society received $1,080.4 million in premiums. For each of those dollars it returned 89 cents in claims to members. This compares to an average of 67 cents in the dollar among the remaining New Zealand health insurers, with some returning as little as 60 cents in the dollar.

Southern Cross is a not-for-profit Friendly Society which aims to make a modest annual surplus to deliver maximum value for its members.

Southern Cross Health Society Chairman Greg Gent says the surplus is the result of carefully balancing income from premiums with outgoing claims.

“The Society continues to deliver excellent value for members with an outstanding claims ratio compared with other health insurers. We’re always conscious of the fine balance between offering maximum value for money to our members and ensuring the affordability of premiums.”

Chief Executive Nick Astwick says the results mean the Society can continue to look to the future with confidence.

“We’ve made some decisions over the past year that have delivered a sound result. We estimate our Affiliated Provider programme has saved an impressive $56 million and expect to see those savings continue. Digital adoption is also up significantly, with logins to My Southern Cross up 151 per cent.

“We’re now turning our minds to our goal of helping Kiwis live their healthiest lives; investing further in the business to deliver continued benefits and exceptional value for members in years to come.”

Southern Cross Health Society now has more than 870,000 members. It retained its Standard and Poor’s A+ financial strength rating for the 17th consecutive year.

Snapshot figures – FY19

• For every dollar received in premiums, Southern Cross Health Society returned 89 cents in claims

• 871,065 members – up 3,472 from last year

• $1,080.4 million premium income (up 9% on the previous year)

• $963.7 million total claims (up 6%)

• A surplus of $10.7 million

• 62% of the health insurance market but pay 73% of claims*

• Investments generated $22.1 million of income, with total investments at $492.5 million by the end of the year

• Standard and Poor’s A+ financial strength rating

In the year ended 30 June 2019, the Society paid 3.2 million claims, including:

• 251,426 surgical procedures

• 499,263 specialist consultations

• 659,377 prescriptions

• 728,281 GP visits

* Based on Health Funds Association of New Zealand data


Southern Cross appoint new chief legal officer

Fiona Brown has been appointed chief legal officer at Southern Cross Health Society. Brown is moving from Kiwibank and her previous role as General Counsel and Company Secretary. Prior to that she has worked 11 years in a variety of roles including Head of Governance at ANZ and Chief of Staff and Head of Securitisation.

Click here to read more. 


Southern Cross Commission Changes

Several advisers have phoned or written to express dismay at the changes to service commissions by Southern Cross. The primary concern has been for the ability to provide effective service to customers under the new model. Secondary concerns have been the impact on adviser business valuations, which would appear to be significant. As it happens, I will be running a valuation seminar on the seventh of August, I shall cover the issues of service commission changes and agency agreement terms in more detail at that session. 


Product and pricing changes for OnePath, nib, Asteron Life, Southern Cross, AIA and Sovereign

An absolutely huge couple of weeks of changes: 

Pricing:

  • Updated OnePath Mortgage Protection Prices effective 1 July
  • Updated nib health prices effective 1 July
  • Updated Southern Cross health prices effective 1 July
  • Updated Asteron Life and Trauma rates effective 1 July

New Features:

  • Needs Analysis – added Standalone and Accelerated options for existing Trauma and TPD insurance
  • Research report – added a new page at the end explaining the QPR Research methodology

Research:

Completed a big set of changes, with some quite substantial shifts (see more posts later today and next week)

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Eligibility rules:

  • OnePath - Income Protection, Mortgage Protection and Trauma - changes in entry ages
  • OnePath - Income Protection - age limit changed

New medical insurance premium database

The latest medical insurance premium comparison database is version 7_3. If you are a corporate subscriber you should have received your copy by now. It includes changes:

  • Update nib rates effective 1/7/19
  • Update Southern Cross rates effective 1/7/19
  • Change Accuro rates for ages under 21 to dependent rate to make it consistent with other providers

Southern Cross awarded Most Satisfied Customers Award for the fourth year in a row

Congratulations to Southern Cross who were awarded Canstar's Most Satisfied Customer Award for the fourth consecutive year. 

“Southern Cross Health Society has been rated by its members as the market leading health insurer for its service quality, communication and performance throughout the claims process, winning our customer satisfaction award for the fourth consecutive year,” says Jose George, General Manager of Canstar New Zealand.

Click here to read more. 


Southern Cross releases claims stats

Southern Cross has released some stats as of the 31st of March 2019 stating they have 870,584 members which includes their oldest member of 107 years old. 

Then highest claim over the six month period cost $165,222 for gastrectomy, followed by two instances of spinal fusion costing over $128,000 each.

Click here to read more. 


Southern Cross invest in AI

Southern Cross has introduced a new ‘digital human’ which is powered by FaceMe. Although nameless, the adviser-bot is a novel product in the global health insurance industry. The introduction of the adviser-bot will allow it to answer basic questions which people may feel embarrassed to ask advisers. Southern Cross hope to potentially expand the role of the adviser-bot, so customers are able to better understand Southern Cross products. From InvestmentNew NZ, by David Chaplin.

Click here to read more.