Another strong year for the health insurance sector

The latest data snapshot released today by the Financial Services Council (FSC), shows another strong year for the health insurance sector with cover and claims paid growing to record levels.

In all, the health insurance sector paid out nearly $1.5 billion in claims in 2021, an increase of $121m on the previous year, while the number of New Zealanders holding health insurance grew by 30,000 over the same period.

The data shows that the total number of customers covered by health insurance in New Zealand is now just under 1.45 million people. This indicates that more Kiwis are thinking about their health and wellbeing.

Richard Klipin, Chief Executive Officer of the Financial Services Council, said “Our latest data shows that more Kiwis are thinking about their family’s health and wellbeing through the lens of Covid-19, especially during lockdowns and now as the Omicron wave is hitting the country.

“It also highlights that health insurance is becoming an important employee benefit at a time when businesses are looking at ways to attract and retain talent in a competitive employment market,” added Klipin.

The data revealed a growth in claim payments following fluctuations as the impact of Covid-19 reduced the availability of both public and private health services, especially during earlier lockdowns, when many elective and non-urgent surgeries, specialist consultations, and diagnostic testing were delayed.

Lance Walker, co-chair of the FSC’s Health Committee, said “The data shows the impact of alert levels since the Covid-19 pandemic started. However, we can see that claims rates started to grow in alert levels 1 and 2 and continue to rise as many of the country’s hospitals were able to return to normal operations and undertake more non-urgent treatment.”

“We may again see a delay in non-urgent services and elective surgeries as Omicron bites and our health system comes under renewed pressure, but the private health sector has shown its resilience and ability to increase activity to treat customers quickly after Covid-19 waves,” added Walker.

The private health sector plays an important role in New Zealand, funding around half of all elective surgeries in the country and is playing an increasingly important role in providing cancer treatment. Aside from improving the quality of life for many Kiwis, the private system also eases some of the pressure on the public system.

Len Elikhis, co-chair of the FSC’s Health Committee, said “The public health system has seen a similar impact as it initially reduced some non-urgent services in earlier lockdowns to prepare for the potential demands of treating Covid-19 patients. New Zealand is not unique in this regard and many health systems have responded in similar ways through the pandemic.

"As we navigate through the Covid-19 pandemic, the public and private health sectors continue to adapt to support the health needs of New Zealanders. For example, it’s been encouraging to see a growth in virtual consultations,” added Elikhis.

“As we enter year three of the pandemic, we want to acknowledge and thank all those people working to treat Kiwis and support the New Zealand health system,” concluded Klipin.