Southern Cross Health Society Group has reported a significant increase in claims activity for the financial year ending June 30, 2025 (FY25), with 3.8 million claims processed – an all-time high for the organisation.
This figure represents a 16% rise compared to the previous year, reflecting a trend of more members utilising their health insurance policies more frequently.
Chief executive Nick Astwick attributed the growth in claims to continued strain on the public health system, which has led members across all age groups to seek private healthcare options.
“There is clear evidence our public health system remains under pressure; we’re seeing members of all ages using their policies more than ever to access the private healthcare treatment they need, when they need it,” Astwick said.
The insurer’s membership base includes a substantial proportion enrolled through employer-sponsored group schemes.
Approximately 40% of Southern Cross’s 950,000 members receive subsidised coverage through 2,600 participating employers, providing access to private healthcare for employees and their families.
During the reporting period, Southern Cross Health Society paid out $1.706 billion in claims, compared to $1.811 billion in premium income.
The group returned 94 cents of every premium dollar to members through claims. Despite this, the organisation reported a net deficit after tax of $51.8 million, with the health insurance arm accounting for a $56.9 million deficit.
Subsidiary investments contributed a combined net surplus after tax of $13.9 million, and investment returns totalled $43 million.
Membership numbers remained relatively stable, with a slight decline to 951,808, down by 3,493 from the previous year. Astwick noted that membership stability was maintained despite economic challenges.
Operating costs for the health insurance business were reduced by 3% year-on-year. The Affiliated Provider (AP) programme, which contracts healthcare providers to deliver services at agreed prices, expanded to 2,500 providers nationwide, including 143 new additions.
The insurer also introduced a national pricing structure for imaging services such as x-rays, mammography, CT scans, and MRIs.
Astwick acknowledged that the increase in claims has resulted in higher costs, which in turn affect premiums.
“Our member services team has worked incredibly hard to support our members who may be finding it difficult to manage premium increases. This year 17,772 members were able to retain their cover by choosing to add or increase their excess,” he said.
He also pointed out that Southern Cross’s annual base premium increases have been lower than sector averages, a result of its Friendly Society structure, cost control measures, and the AP programme.
Looking forward, Southern Cross Health Society said it is focused on managing claims costs, maintaining premium affordability, and ensuring financial sustainability.
The organisation is also exploring ways to support members beyond funding treatment, with the goal of improving overall health outcomes.
Astwick highlighted the gap between life expectancy and healthy life years in New Zealand, noting that many individuals spend their final years in poor health.
“We are heavily invested in shortening those 12 years, to claim that better health back for our members,” he said.
The group aims to strengthen its position as a key partner in New Zealand’s health sector, with an emphasis on supporting members’ health throughout their lives, not just when they require treatment.
