Healthy profit for Southern Cross

Health insurer Southern Cross Medical Care Society yesterday announced a net profit for the year to June 30 of $31.8 million.

"Higher investment and other income, at $25.9 million compared with $15.4 million in the prior year was a contributor to the surplus, which includes a $12 million operating surplus," society chairman John Matthews said.

The non-profit group, which offers health insurance services to individuals and group schemes, has about 800,000 members.

Chief executive Ian McPherson said Southern Cross' financial position was further strengthened by reserves rising from $238.4 million at the start of the financial year to $270.2 million at June 30. Southern Cross took in $484.6 million in premiums and paid out 78 per cent, or $378.6 million, in claims.

"Our claims-to-premium ratio was slightly lower than average this year and that was an influencing factor in the decision made in February to hold or reduce premiums for some 500,000 of our members with effect from May of this year," McPherson said.

Operating expenses, at $68 million, increased by $11.4 million, reflecting what McPherson said was an "intensive year for the organisation".

Southern Cross Medical Care is part of the Southern Cross Healthcare group.

- NZPA