Vivas, the AIB and Dermot Desmond-backed independent health insurer launched last autumn, is believed to have signed up between 6,000 and 8,000 subscribers in its first six months.

The company was launched late last October and pledged to undercut bigger rivals, State-owned VHI and British-controlled Bupa, by as much as 49 per cent with packages tailored for different age groups.

A spokeswoman said that the company did not intend to publish figures detailing its performance, but added that it was ahead of target. The Irish Times understands that it has signed up between 6,000 and 8,000 subscribers in its first half year. Industry sources say that it had a a slower than expected start, but began generating the levels of business it was seeking over the last three to four months. An estimated two million people in the Republic have health insurance.

Vivas's chief executive is Oliver Tattan, who served as chief executive of the VHI in the late 1990s, when it was first getting to grips with competition from British non-profit, Bupa.

Shareholders in its parent company, Centura, include Mr Desmond, the financier who holds a range of interests through his vehicle, International Investment and Underwriting (IIU).

The country's biggest bank, AIB, emerged as an investor in the venture last autumn, several weeks ahead of the company's launch. Vivas is using the bank as one of its distribution channels.

When the group launched, it was quoting €1,749 a year for cover that included private hospital rooms for a family with two students and two children. A similar VHI package cost €3,461 while the market's other player, Bupa, charged €2,535 for its equivalent.

Bupa and VHI are currently locked in a row over the prospect of risk equalisation being introduced into the Irish market. Risk equalisation is based on the idea that people pay the same price for the same level of health cover, no matter what their age and state of health.

Bupa Ireland says this will result in it having to pay €34 million to the VHI this year.