Will Aviva’s re-entry into the Irish health insurance market after an eight-year hiatus bring down prices for consumers?
We can only hope so given the drift upwards since the pandemic ended a couple of years ago. At the very least it might bring some stabilisation in premium costs, which in itself would be a relief.
Health insurance premiums rose by an average of 10 per cent last year to €1,594, according to the Health Insurance Authority (HIA), amid a rising number of claims and costs. This was in advance of inflation.
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State-owned VHI, and Axa-owned Laya have increased their coverage costs again in the early months of this year.
In addition, about 130,000 VHI members will be forced to change their healthcare cover, with the insurer set to axe some of its most popular plans next month. We can only assume that the plans weren’t achieving the right margin.
Aviva intends to enter the market in the second half of this year, via a joint venture with experienced industry executives, including former VHI boss Oliver Tatten and Jim Dowdall, who led Irish Life Health.
The expectation among brokers is that Aviva will target large corporates in a bid to get scale and credibility. There is also the potential for cross-policy discounts being offered on Aviva’s range of general insurance policies.
If you were to listen to VHI, Laya and Irish Life Health, there is no money to be made in the private health insurance market here. And yet French insurer Axa last year paid €650 million to acquire Laya, while Irish Life spent big in the past decade to carve out its position in the market (including buying out Aviva Health in 2016).
And we can only assume that British insurer Aviva is making this move because it sees a good opportunity to make money. Hopefully there will be upside for consumers, too.
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