Insurer has eye on new clients

By Richard Braddell

WELLINGTON - The country's largest medical insurer, Southern Cross, is using the second year of no premium rises to underpin a marketing drive aimed at reversing a membership slump.

The society, which retains a stable 65 per cent share of a shrinking market, has suffered because many people stopped taking medical insurance. Rising premiums brought a decline in members from half the population in 1990 to an estimated 33 per cent today.

Caught in a pincer of an ageing population, rising health costs and Government withdrawal of many provisions, until two years ago premiums were being forced up by 12.5 per cent annually with the rise arrested only after the society began targeting claims experience with no-claim bonuses.

The chief executive, Roger Bowie, said membership had stabilised over the past 18 months, but the society wanted to boost numbers to take advantage of the enhanced capacity to spread insurance risk and contain premium rises that a higher membership brought.

The only factors likely to cause premium rises were a further shift in costs from the state to private sector and change in group and individual members' claims history.