Southern Cross Health Society's chief executive says membership remains stable. Photo: 123RF
The Southern Cross Health Society continues to make record returns to members, though insurance premiums will rise as costs have left the society's insurance business in the red.
Southern Cross Health Insurance reported a $56.9 million deficit in the year ended June, which was a $42.2m improvement on last year's $99.1m deficit.
"Our membership remains stable after nearly nine years of growth," chief executive Nick Astwick said, though it was dealing with ongoing challenges with member policy cancellations up 1 percent.
The society paid out on a record 3.8 million claims in the year ended June, which was an increase of 16 percent on the year earlier, with the value of total claims up 14 percent.
"It is heartening to see our membership is stable despite ongoing challenges in the New Zealand economy," he said, adding that corporate partnerships were steady.
"It's important to note our membership represents 60 percent of the health insurance market by customer numbers, but we pay 68 percent of the value of all health insurance claims paid."
While membership declined slightly, members made more frequent claims, adding to the society's costs.
"We've worked hard to manage premium increases over the year," Astwick said, adding that base premium price increases were lower than for-profit competitors.
Astwick said cost rises had been somewhat offset by its Affiliated Provider (AP) programme pricing.
"We now have 2500 contracted healthcare providers nationwide, adding 143 providers to our AP programme over the year.
"We were delighted this year to achieve a national price for imaging procedures such as X-rays, mammography, CT scans and MRIs."
He said the focus on managing costs saw operating costs drop 3 percent over the year.
Still, he said there was a need to increase insurance premiums to cover a rising number of claims.
"While our focus over the past two years has been to keep the level of premium increases as low as we can, accepting a deficit in the short term, it is necessary for Society to target a surplus in the coming years to ensure we maintain sufficient capital reserves."
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