Southern Cross posts $88 million deficit for year ended June
· RNZ- Deficit for June year $88m vs deficit $16.5m year before
- Claims increase 15 pct, premium income up 9 pct
- Membership 955,301 - 50 pct made claims
- Most expensive procedure - heart valve ($72,800-$94,200)
- Spending on knee/hip replacements, colonoscopies rise sharply
- Pet and travel insurance profitable
The country's biggest health insurer and private healthcare provider Southern Cross has posted a large deficit on the back of rising costs and claims, and an accounting change.
The not-for-profit group said it had had a surge in business as people turned to the private health system to get around blockages and delays in the public system.
Chief executive Nick Astwick said a deficit had been expected, but costs rising faster than premium increases was responsible for about half of the deficit while a change to accounting standards for insurance companies accounted for the rest.
But he said demand and cost of claims had been steep and rapid.
"The growth in the volume of claims results from an increase in the number of members claiming, the frequency, and claims being made for more expensive procedures."
Astwick there was future growth in the private sector healthcare remaining complementary to the public system.
"Southern Cross is not a replacement for the public health system, there is a lot of things, chronic care management, emergency care management, which we simply don't do.
"But there is certain elective and cancer care that we do do ... at the end of the day we're only going to solve this health demand by using the public and private healthcare systems together."
The proportion of members making claims had risen to 50 percent from 33 percent in 2019, and it had paid out 93 cents in claims for every dollar in premiums.
Southern Cross has about 60 percent of the health insurance market, and in addition to medical services also offers travel and pet insurance, which made a combined surplus of $11.6 million.
Astwick said it did not plan to expand its insurance offering beyond what it regarded as its current 'bedrock' business.