Accuro Health Insurance is holding a second special general meeting (SGM) later this month amid its board’s proposal to combine the mutual society with fellow health insurer Union Medical Benefits Society (UniMed).
The proposal is to transfer Accuro’s insurance portfolio and operations to UniMed, making all Accuro members UniMed members. For this to happen, approvals by Accuro members and the Reserve Bank of New Zealand are needed.
Members’ approval, as per the insurer’s rules and the provisions of the Industrial and Provident Societies Act 1908, should be secured at two SGMs, with at least 75% ‘yes’ votes in both instances.
Held on October 30 in Wellington, the first SGM resulted in 92.8% of those who took part voting in favour of the transfer. The second SGM, meanwhile, is scheduled on November 20. The proposal will be referred to the central bank for final approval if it gets the required support then.
Lifting the lid on the proposal, Accuro explained: “Having conducted appropriate due diligence, the Accuro board believes that combining the two not-for-profit mutual societies will create an even more resilient and sustainable health insurance offering focussed on delivering greater value and better customer health outcomes for the members of both societies.
“As member-based societies, we do not have to return a profit to shareholders, but we do need to ensure we are financially strong and resilient, and this has been a key driver in taking this strategic decision. Having bigger scale will allow us to remain responsive to changing market conditions and affordability challenges in the healthcare environment and provide more options to develop new products and services.”
Additionally, the board is of the view that greater scale means Accuro would be “better able to respond to and recover from unexpected events” such as its external information technology infrastructure provider being hit by a cyber incident.
“Our goal is to provide long-term, sustainable and affordable access to healthcare services for members,” the cooperative said. “We believe the proposal will do that and is therefore in the best interests of Accuro members.”
Accuro, meanwhile, clarified that it wasn’t “forced to do this” following the abovementioned cyber incident. It was pointed out that the proposed combination has actually been a long time coming.
“Discussions on this proposal began with UniMed in mid-2022, well before that incident,” Accuro said. “In fact, the boards of both organisations have discussed this type of proposal several times over the last decade due to the natural alignment between the two societies.
“However, what the cyber incident has demonstrated is that those events are hard on a small insurer. We’re proud of how the Accuro team responded to the cyber incident, but members know it has been a challenge to recover fully and our service levels were severely impacted. The larger scale of the combined entity means we would be in a better position to manage any future shocks.”
Accuro has about 30,000 members; UniMed, nearly 110,000. It was highlighted that the smaller society is not being taken over.
“This is a merging of resources and capabilities,” Accuro said. “The proposal has been jointly developed by Accuro and UniMed. It is a genuine ‘meeting of the minds’ creating a more sustainable and resilient organisation that benefits the members of both societies. While Accuro as an entity will ultimately cease to exist after the portfolio transfer, the Accuro brand will continue when the two organisations are combined.”
If the transfer doesn’t get the required approvals, Accuro said it will have to look at other options to address the challenges of being a small insurer in the current, as well as future, environment.
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