Notforprofit health insurer’s annual surplus sinks 81% as claims outpace income

AUCKLAND: Notforprofit health insurer the Southern Cross Medical Care Society has seen its annual surplus drop 81% as an increase in claims outpaced rising premium income.

The Aucklandbased mutual posted a surplus of $6.8 million, down from $35 million a year earlier when relatively flat claims led to a jump from a $5.8 million surplus reported in 2015.

Income from premiums rose 6% to $923 million, the fourth year in a row that premium income has risen by about 6%.

That outpaced a 4% increase in membership to 853,160 members.

It paid out about $830 million in claims in the 2016 financial year, compared with $749 million a year earlier, a rise of 11%.

Ninety cents of every dollar paid in premiums went on mem bers’ treatment, up from 86 cents the previous year.

It has reserves of $441.3 million.

Chairman Greg Gent said that Southern Cross had invested in digital technology over the past year, and more than 80% of its claims were now submit ted electronically.

‘‘We’ve seen robust growth across a number of significant areas and have continued to enhance the way members can interact with us via digital technology,’’ he said.

The company had increased the number of its easyclaim providers by 35% to 2171.

The number of affiliated providers contracted with Southern Cross for healthcare services rose to about 1850 from about 1300 the year earlier, resulting in savings of about $35 million for the 201617 year, it said. — SCOOP