Society annual results highlight strong growth in 60th year
Southern Cross Health Society Group (“Group”) today released its annual financial results, highlighting strong membership growth and the delivery of a solid surplus.
Southern Cross Health Society (Society) is a not-for-profit Friendly Society and New Zealand’s largest health insurer. At 30 June 2021 the Society membership totalled 887,782, an increase of 8,584 from the previous year.
The Society Group posted a surplus of $53 million at the end of the financial year, which included an operating surplus of $10 million, and $39 million primarily derived from investment income.
Society Chairman Greg Gent said it was very pleasing to see the membership growth and strong surplus, despite another challenging year due to the pandemic.
“We are all still operating in a climate of uncertainty and so we’re very pleased to have delivered such a strong result. It is precisely the overall outcome we aim for to ensure we maintain our financial strength, particularly important in these unpredictable times.”
Mr Gent explained that the strong investment income is the culmination of the last five years of the Society’s investment activity and a well-optimised strategy but is not likely to be repeated.
“While this year’s investment income contributes funds to the Group investment portfolio, which will give members confidence that the business has the means to pay future claims as it grows, such is the nature of investments that we do not expect our portfolio to repeat this performance every year.”
In the last financial year, the Society returned $1.099 billion in claims and received $1.256 billion in premiums.
For each dollar received in premiums, it returned 87 cents in claims to members, compared with an average of 62 cents in the dollar among other New Zealand health insurers.
The business paid 73 per cent of all private health insurance claims, significantly more than its 62 per cent market share.
Society Chief Executive Nick Astwick said it was encouraging to see the strong growth over the past financial year, despite the effects of the pandemic, and put this down to a widespread focus by people toward managing their health and wellbeing.
“More people today are focusing on their health and wellbeing and seeking assurance that they are covered for unexpected events – which is the vital role health insurance plays.
“For us, this means we are growing. Last year’s increase of more than 8,500 members is the fifth year in a row that we have seen positive growth and shows the great value people place on securing health assurance.”
Mr Astwick said the Society continued to evolve over the past year and deliver improvements and innovations to support the needs of members.
“As we grow, we continue to innovate, based on the continuous assessment of the needs of our members. In November last year we launched, with our partner ProCare, virtual health consultation service CareHQ, and a new health insurance policy upgrade option - Cancer Cover Plus.”
Mr Astwick acknowledged the climate many members and corporate customers were living in and working under due to the recent COVID-19 lockdown restrictions.
“We know many people are again going through very tough times. Once we knew we were in this for a relatively long period of time, we put into place our hardship packages.”
In its 60th year, the Society remains true to its roots, said Mr Astwick.
“Southern Cross was originally established to ensure New Zealanders had ongoing access to quality private healthcare. Today, that founding vision lives on in our not-for-profit business model and our commitment to a healthier future for our members.”
Mr Astwick thanked outgoing Chairman Greg Gent for his 10 years of service to the Society Board.
“Personally, I have greatly valued Greg’s guidance and wisdom and thank him for his outstanding governance of the Society.
“More than ever this year, I’d like to thank our team and our health service providers, for their unwavering dedication and commitment to supporting our members,” said Mr Astwick.
Current Director Murray Jordan has been appointed by the Board to replace Mr Gent, formally taking the reins at the AGM in December.
Southern Cross Health Society retained its Standard and Poor’s A+ financial strength rating for the 19th consecutive year.