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Southern Cross Premium Increases - What's Driving Them and What Are Your Options - January 2026

Our guide explains why Southern Cross health insurance premiums keep rising, what the 2025 financials reveal, and practical options to reduce costs or switch insurers.
Updated 5 January 2026
Summary
  • Southern Cross premiums have been rising 10-30% annually for many members based on Southern Cross financial statements, media and online reports. Some policies - particularly for people over 50 or those on comprehensive plans - are increasing even more.
  • This guide sets out what's actually driving the increases based on Southern Cross's 2025 financial statements, whether the Society still offers reasonable value, what the alternatives are, and how to reduce your premium or decide whether to switch.
  • This guide also explains the pre-existing conditions problem that prevents many people from changing insurers, due to fear of being denied coverage.
  • Please note, MoneyHub respects Southern Cross as an organisation – it exists for its members (the insured), returning over 94 cents of every premium dollar as claims in 2025 (far above the market average). This guide is published to help Southern Cross members assess their options.

To help you understand what's going on, our guide covers:
Important: This guide is primarily for Southern Cross members trying to understand why premiums keep rising and what they can do about it. It's also useful for anyone comparing health insurers or considering switching.
Know This First: Southern Cross is New Zealand's Dominant Health Insurer with a 60+ Year History:
  • Southern Cross Health Society was founded in May 1961 by a group of Auckland surgeons who believed New Zealanders should have access to private healthcare options beyond the public system.
  • It's registered as a Friendly Society, meaning it's a not-for-profit organisation that exists for its members rather than shareholders as their website outlines.

Southern Cross' market position in 2025 (all figures sourced from the Southern Cross 2025 Annual Report):
  • 60% of New Zealand's health insurance market by customer numbers
  • 68% of the value of all health insurance claims paid in New Zealand
  • 951,808 members as of 30 June 2025
  • Covers roughly one in five New Zealanders

Why Southern Cross gets more media attention than other insurers (especially when premiums increase):
  • When Southern Cross raises premiums, it affects more people than all other health insurers combined. For example, a 15% average price increase at Southern Cross impacts around 950,000+ members. The same price increase at a smaller insurer might affect 50,000.
  • The not-for-profit structure also invites more scrutiny - Southern Cross can't point to shareholder returns to justify costs, as every dollar either pays claims, covers operations, or sits in reserves for when Southern Cross pays out more in claims that it takes in policy revenue.

Where Does Your Southern Cross Premium Money Go, and Why Do the Monthly Costs Keep Increasing?

Southern Cross is a not-for-profit friendly society. There are no shareholders and no dividends. All money either pays claims, covers operating costs, or goes into reserves. The 2025 financial statements show the following:
Financial Metric (Southern Cross Health Insurance)​​
Financial Year 2025
​Insurance revenue (Group)
$1.81 billion
Claims paid
$1.71 billion
Claims as percentage of premiums
94%
Net result after tax
-$57 million
Daily claims payments
$4.7m per day ($1.71 billion / 365​)​
What the financials confirm:
  • Southern Cross paid out more than 94 cents of every premium dollar as claims in 2025 – the highest rate in over a decade (as discussed in their annual report).
  • By comparison, the rest of the health insurance market (excluding Southern Cross) averaged around 76 cents on the dollar. This figure, cited by the CEO in the Southern Cross Financial Statements, uses Financial Services Council (FSC) data. Per this recent RNZ story, Southern Cross confirmed that their membership "represents 60 percent of the health insurance market by customer numbers, but (pays) 68 percent of the value of all health insurance claims paid", suggesting it pays well "above average".
  • We checked FSC reports (the most recent one we can access is 2022 data showing roughly $1.51 billion in claims paid against $2 billion in premiums for the non-Southern Cross sector), and it lines up closely at about 75-76%. 
  • The 18-cent difference equates to around $290 million more paid to Southern Cross members than other insurers would have delivered on the same premium base.
  • While Southern Cross policyholders complain about cost increases, the organisation pays out more in claims for every dollar charged.
  • The health insurance business lost $57 million in the 2025 financial year.
  • The prior year was worse at $99 million, and group reserves have dropped by about $140 million over the past two years.
  • Southern Cross states in the financial statements that it expects to lose money on health insurance policies from the day they're written. Current premiums, even after recent increases, don't cover costs.
  • As outlined in the financial statements, Southern Cross' Chair's 2025 message explained that (losses) were "driven by an exceptionally high volume of claims as members utilised their health insurance more than ever before. This coincided with ongoing challenges within the public health system, including the accessibility of elective surgery."
  • Southern Cross' CEO stated "there is clear evidence our public health system remains under pressure. We're seeing members of all ages using their policies more than ever to access the private healthcare treatment they need, when they need it."

We believe more policy cost increases are coming:
  • Southern Cross used reserves to soften premium increases over the past two years; they've done so eight times in the past 25 years.
  • Reserves dropped from $470m to $419m in one year, and the Board says returning to surplus in 2026 is necessary to maintain capital. This means that Southern Cross can't keep absorbing losses, and policy costs will likely increase in the years to come.
  • The financials stated that 17,775 members added or increased an excess last year to manage costs.​

Our view: Southern Cross is not overcharging members - it is struggling to price health insurance sustainably in a system where medical inflation, aging demographics, and pressure on the public health system are rising faster than premiums can realistically keep up.

What did Southern Cross members get for their premiums in 2025?

The Southern Cross 2025 annual report summary highlights just how much private healthcare members accessed last year. A few standout examples:
  • Over 340,000 surgical procedures (up 7%)
  • 651,000+ specialist consultations (up 7%)
  • 853,000+ GP visits (up 5%)
  • Nearly 539,000 prescriptions (up a massive 153% – largely due to the return of $5 prescription fees)

They also paid out big on major procedures, like:
  • $80.7 million on knee replacements (up 14%)
  • $80.4 million on colonoscopies (up 14.5%)
  • $72.2 million on hip replacements (up 10%)

Southern Cross further highlights that its members received 2,599 new knees, 2,490 new hips, and 2,004 tonsillectomies. 

Common Reasons Southern Cross Premiums Keep Increasing

While every policy cost increase will be individually assessed, there are three contributing factors that affect all policyholders.

1) Medical inflation has doubled
  • As outlined in a Stuff.co.nz report, medical inflation rose 14.5% in 2025, up from 7.4% the year before.
  • This measures the actual increase in costs for procedures, specialist consultations, prosthetics, and hospital charges. This means that when hip replacement costs rise by 14.5%, health insurance premiums must increase to cover the higher costs.

2) Claims volume is up significantly
  • Claims volume increased 16% year-on-year, with claims value up 14%. We calculate that Southern Cross paid around $4.7 million in health claims each day in 2025, up from the previous year as claims and costs rose.
  • Policyholders are aging and claiming more often - 52% of members made at least one claim in 2025, rising to 67% among those aged 60+
  • Both the higher proportion of claiming members and the increased frequency of claims have significantly increased Southern Cross' costs.​

3) Age and risk-based pricing
  • New Zealand uses age and risk-based pricing for health insurance - the more likely you'll claim, the higher the annual cost.
  • Australia, in contrast, uses community rating where everyone pays similar premiums regardless of age.
  • However, all health insurers operating in New Zealand will, for example, charge more for a 60-year-old than a 30-year-old because they claim more frequently.
  • Your premiums rise faster than general inflation each year as you age, reflecting the risk.
  • If you joined Southern Cross (or any health insurer) when you were younger, expecting stable premiums into retirement, that's not how the pricing model works - age-based increases are certain. 

Pre-Existing Conditions and Switching Insurers

We hear from readers nearly every week who want to switch health insurers but won't because they're worried about pre-existing conditions. It's a valid concern, but the situation isn't always as black-and-white as people think.

New insurers will typically exclude conditions you've been treated for or shown symptoms of. For example:
  • If you've had back surgery, future back claims related to your back won't be covered
  • If you're on blood pressure medication, you may be excluded from heart-related cover

Despite the limitations, it's not always a "no". For example, if you've had continuous cover, some insurers will consider your history and may still cover pre-existing conditions - the success of such varies by insurer and condition.

You can also accept exclusions on things you've already treated (and are unlikely to claim for again) while getting everything else covered at a lower premium. While every health condition has different risks, if your condition is well-managed and you're realistically not going to need further treatment, losing that specific cover might not matter - and you could be saving thousands a year. However, making such a decision about what to exclude takes careful consideration. 
Southern Cross Member? Compare Your Alternatives

Reducing Your Health Insurance Costs Without Changing Insurer

If you're looking to stay with Southern Cross (or your existing health insurer), there are ways to lower your ongoing costs.

1) Add or increase your excess
A surgical excess of $1,000 to $4,000 can cut premiums by 20-40% per our health insurance comparison research. The excess applies to surgical hospital events only - not specialist visits, GP consults, or tests.

A significant number of health insurance claims policyholders make are non-surgical, so most members with an excess never pay it. So, for example, if you need a $30,000 procedure and have a $2,000 excess, Southern Cross covers $28,000.

2) Review your coverage level
Comprehensive plans with additional features will almost always cost more than hospital- or surgical-only plans. Many policyholders who are getting older consider structuring their health insurance coverage around genuine financial risk, not everyday expenses they can afford.

3) Consider switching plans or tweaking add-ons
Southern Cross has quite a few plans these days – Wellbeing One and Wellbeing Two (for everyday things), UltraCare (the more comprehensive policy), RegularCare, KiwiCare, and specialised options like Cancer Cover Plus or Cancer Assist. On top of that, you can bolt on extras for GP visits, dental, optical, physio, or whatever else.
​
There are so many combinations that we can't list out every possibility here. But often people save a decent amount just by moving to a different base plan, dropping modules they hardly use, or adjusting the extras to better match what they actually need. To determine the costs, contact Southern Cross. 

Alternative Health Insurers Accepting New Applications

Our View: For long-term members with pre-existing conditions, Southern Cross may still be the least expensive option - even after significant premium increases.
Provider
What they offer​
What to know
Partners Life
New Zealand-owned, comprehensive plans, strong cancer coverage
Must purchase through a financial adviser, not available direct or online
nib
Australian-owned, online applications, everyday cover options, competitive for younger members​
Check their provider network covers your area
AIA
Vitality programme offering premium discounts for healthy behaviours, international insurer backing
Adviser-sold only, wellness tracking requirements may not suit everyone
Unimed
Member-owned co-operative, generally lower premiums, direct application available
Smaller provider network, fewer plan options
AA Health
Underwritten by nib, online application, bundles with other AA products
AA Health offers nib insurance with AA branding
Know This: It's essential to get quotes with identical parameters - same excess, same coverage level, same benefits - before comparing with your existing Southern Cross cover.
Southern Cross Member? Compare Your Alternatives

What To Do Next

If your renewal notice has arrived and the number is higher than expected, we suggest you don't just pay it or cancel in frustration.
  1. We suggest you call Southern Cross and ask them to review your plan options.
  2. Ask specifically what your premium would be with an excess of $1,000 or $2,000 (or more) added.

If you're considering switching insurers, we suggest:
  1. You get quotes from at least two alternatives - we suggest starting with LifeDirect and enter your details
  2. Get written confirmation of what pre-existing conditions would be excluded before you cancel your existing cover.
  3. If you're considering cancelling altogether, make sure you understand the costs you'd face if you pay privately - and be realistic about whether you'd actually invest the premium savings or just spend them on general living costs. ​

What does all of this mean for Southern Cross premiums from 2026 to 2028

While nothing is certain, we believe:
  • Premium increases are very likely to continue annually, as Southern Cross has stated it needs to return to surplus after consecutive losses and cannot keep drawing down reserves indefinitely.
  • Increases are unlikely to match general inflation - medical inflation is running well above CPI, and age-based pricing means many members will face compounding increases.
  • Older members and comprehensive plan holders will continue to see the largest rises, as claim frequency and claim size increase sharply with age.
  • Southern Cross is unlikely to dramatically undercut competitors, because its claims payout ratio is already significantly higher than the rest of the market.
  • Plan design changes (higher excesses, reduced modules) are likely to be the main lever for members to control costs, rather than headline premium relief.
  • Switching will become harder over time, as more members accumulate pre-existing conditions, increasing “lock-in” effects across the market.
  • Public health system pressure is not expected to ease materially, meaning private utilisation - and insurance claims - will remain structurally high.

Our View: For many members, the realistic choice over the next three years will not be “Will premiums rise?” but “How do I manage rising premiums without losing essential cover?”

Frequently Asked Questions

Why is my premium increase higher than the average Southern Cross announces?

Southern Cross discusses average increases in its annual reports, but your premium is based on your age band, plan type, and claims history. If you've moved into a higher age bracket or you're on a comprehensive plan with higher claims experience, your increase will be above average.

For example, a 15% average might mean 8% for a 35-year-old and 25% for a 62-year-old.

Can I negotiate my premium with Southern Cross?

No - premiums are set by actuaries based on claims data and aren't negotiable. What you can do is ask Southern Cross to review your plan and show you what you'd pay with a higher excess or lower coverage level. That's where the savings are.

Is Southern Cross still worth it compared to other insurers?

On a pure numbers basis, Southern Cross pays out 94 cents of every premium dollar as claims. The rest of the market averages 76 cents; however, other health insurers may offer more suitable (and cost-effective) plans for your needs. If you're paying for extras you don't use, a simpler plan with Southern Cross or another insurer might suit you better.

What happens if I cancel and want to rejoin Southern Cross later?

You'll be treated as a new applicant - any health conditions you've developed since you were last insured will likely be excluded, or you may be declined altogether. If you're currently healthy and insurable, cancelling is a one-way door - you may not get back in on the same terms.

Will premiums ever go down or stabilise?

It's unlikely. Annual medical inflation is running above 10%, the population is aging, and pressure on the public system is pushing more people into private care. Southern Cross has said it needs to return to surplus in 2026 after two years of losses, so policyholders can likely expect continued increases for the foreseeable future.

What if I genuinely can't afford my premium anymore?

We suggest you call Southern Cross before you cancel. Options include:
  1. Adding an excess ($500-$4,000), and/or
  2. Dropping to a hospital/surgical-only plan, and/or
  3. Removing modules like dental and optical (if you have them).

A reduced plan is arguably better than no plan if you have pre-existing conditions that would be excluded elsewhere.

Should I switch to a cheaper health insurer?

We suggest you get quotes first, starting with LifeDirect, which makes health insurance pricing and cover transparent. You'll need to compare like-for-like policies and confirm which pre-existing conditions would be excluded. If you'd lose cover for something you're likely to claim on, the savings may not be worth it.

Is it worth keeping health insurance if I'm healthy and never claim?

That's the gamble of any health-related insurance - recent financial statements confirm 52% of Southern Cross members claimed last year. Among those 60+, it was 67%. If you're younger and healthy, you're arguably subsidising older members - that's how insurance works. The question is whether you'll want coverage when you're older and whether you'll still be able to get it. Cancelling now and trying to rejoin at 55 with a few health issues on your record is a different conversation.

What does the 94% claims payout ratio actually mean for me?

It means Southern Cross returns 94 cents of every premium dollar as claims, compared to 76 cents for the rest of the market.

Important - this doesn't mean you're more likely to get a claim approved - all insurers pay valid claims. But collectively, Southern Cross members receive more back, and less goes to operations and profit.

Could Southern Cross go under given consecutive losses?

It's unlikely. Southern Cross has $400m+ in reserves and a 60+ year track record. However, they've stated they must return to surplus in 2026, meaning they can't keep absorbing losses indefinitely - which is why premium increases are necessary.

Can I adjust my excess at each renewal?

Yes - you can increase or decrease your excess when you renew. Some members keep a high excess while younger to reduce premiums, then lower it as they age. ​

Does making a claim increase my premium the following year?

No - unlike car insurance, New Zealand health insurance doesn't penalise individual claims history. Your premium is based on your age band and plan type. However, high claims across your age group can drive increases for everyone on that plan - so claiming more doesn't hurt you individually, but it contributes to overall premium rises.
Southern Cross Member? Compare Your Alternatives
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