AA Concerned Over Health Insurers
AA Concerned Over Health Insurers Proposed Takeover
AA Insurance is extremely concerned about Southern Cross' proposed take over of Aetna health insurance and disagrees with the Health Funds Association chair, Tony Douglas, who was reported as saying he had "no major concerns with the take-over bid".
AA Insurance is a member of the Health Funds Association (health insurance industry association) and they do not believe that the Chairman's views reflect those of all members.
Chris Curtin, chief executive of AA Insurance, says he has serious concerns about the proposed merger and what it will do to the health insurance market in New Zealand.
"We believe the merger will give Southern Cross around 80% of the health insurance market. This makes it extremely difficult for other insurers to compete, especially given Southern Cross' significant influence over the private hospital market and its tax-free status."
"Without any serious competition a market dominant player has less incentive to keep costs down and service up. If, for example, the cost of procedures is allowed to drift up, then health insurance becomes more expensive and there is a possibility that more people will drop out of the private health insurance market & fewer people are likely to consider taking it up."
"A lack of competition in any market is bad for consumers. This merger may lead to other insurers withdrawing from the market, thereby compounding the problem."
Mr Curtin said AA Insurance is making their concerns known to the Commerce Commission.
For further information, please
contact: Catherine Beard Principal, Comsar Communications,
Tel (04) 389 0544, Mob (021) 633 212 Chris Curtin, Chief
Executive, AA Insurance, Tel (09) 356 6502, Hm (09) 846
6697, Mob (021) 675