5 Nov 2012

New competitor for Southern Cross

6:59 am on 5 November 2012

nib holdings, a private health insurer in Australia, is gunning for Southern Cross, after buying Tower's health business for $102 million last week.

Tower Medical Insurance has a market share of 13 percent, but Tower decided to sell after saying it was too small to get a decent return.

nib managing Mark Fitzgibbon is confident it can do better. He said he will aggressively advertise to consumers directly, target Southern Cross's employee group business and renegotiate broker contracts to turn the business around.

Southern Cross's share of the health market is more than 60%.

Mr Fitzgibbon said its skew toward older customers and thin margins makes it vulnerable.