Health insurer Bupa will transfer 40 jobs from Britain to its Irish base and invest an extra €1 million in the facility, the company said yesterday.
The news comes a week after it warned the High Court that it would leave the Republic if it could not stop the Government introducing a system that will force it to pay €161 million to the VHI over three years to compensate the State player for the large number of older customers that it insures.
Bupa said yesterday that it plans to create 40 new jobs at its offices in Fermoy, Co Cork, and to invest €1 million there to facilitate the expansion. The move will bring total numbers employed there to almost 300.
The new jobs will service corporate customers in the UK. It is understood that they are being transferred from that jurisdiction to the Republic, but will not result in redundancies in Britain because of the level of staff turnover in Bupa's operations there.
Bupa Ireland will establish a new company, Bupa Member Services Ltd, to provide the services to the UK. It will be the first time that the group's Irish operation will provide services to its British customers.
Bupa Ireland chief executive Martin O'Rourke welcomed the move yesterday. "We have consistently grown our businesses over the last 10 years and it is quite a coup to have won these jobs for Fermoy," he said.
Mr O'Rourke added that the company would seek to further develop the services offered by the new company and continue to serve the group's Irish customers.
In the High Court last week, Bupa's lawyers warned that if risk equalisation was introduced to the Irish health insurance market this month, the company would leave the Republic.
Bupa plans a legal challenge to risk equalisation, a system that will force it to compensate its much larger competitor, the VHI, for the high number of older, at-risk clients that it ensures. This is estimated to have cost the VHI over €30 million last year. Risk equalisation was formally introduced on January 1st but Bupa will not have to make payments for nine months.
The case will begin next month, but could drag on for up to two years. Last week, Bupa told the court that if it did not put a stay on risk equalisation's introduction for the duration of its case, then it would honour all insurance contracts for the next year, and take on no new business from this month.
Bupa Ireland's marketing director, Seán Murray, said yesterday that Bupa was opposed to risk equalisation because it would have to pay €161 million to the VHI over three years, a period when it expects to make €64 million in profits.
"That does not really add up and would make our business unviable," he said.
