Tower thrives on woes of Southern Cross

By IRENE CHAPPLE

Health insurer Tower says policy inquiries have doubled since publicity over the claims backlog at Southern Cross, and it has boosted its marketing budget to capitalise on its rival's woes.

Tower NZ chief executive Jim Minto said a campaign worth "well into six figures" had been launched to target dissatisfied Southern Cross customers.

The campaign would also try to push all-encompassing policies, rather than those that covered a multitude of small claims.

"Health insurance is synonymous with Southern Cross," he said. "The biggest problem is that not enough people know they've got a real choice."

Mr Minto said the campaign more than doubled normal marketing expenditure for this time of year.

The push fitted its overall marketing strategy, but moved forward as a result of the Southern Cross debacle.

"It was ahead of what we were planning to do," Mr Minto said. "We wouldn't normally have launched a campaign at this time."

Tower is advertising five new positions in its 60-staff health insurance arm to cope with the influx. It now has about 200,000 health policy holders, up from 185,000 last September.

Mr Minto believes most new customers have come from Southern Cross.

Sovereign, number three in the $525 million-a-year health insurance market, has also increased its policy count, rising from 72,000 life insurance policies late last year to 93,000.

Managing director Simon Swanson said the number of policyholders had risen by 25 per cent over the past three months, but the company was comfortable with the new business and did not need to employ more staff. He did not know where the new business was coming from, because policy advisers did not ask potential customers.

A Southern Cross spokesman was unavailable for comment yesterday.

Southern Cross is the country's largest health insurer, with about 810,000 members.

It has had problems paying clients on time since it bought prime competitor Aetna Health last year, and has been trying to clear a multi-million dollar backlog.

nzherald.co.nz/southerncross