Aviva sells its Health Insurance business in Ireland to Irish Life
IRISH Life is set to set to become a major force in the health insurance market after buying Aviva Health and GloHealth
Canadian-owned Irish Life confirmed that it has now taken control of both companies.
The move will reduce the number of health insurers from four to three.
The deal is the biggest in the sector since Aviva's larger rival Laya Healthcare was sold to AIG last year in a deal understood to have been worth in the region of €90m.
Aviva Health is Ireland's third biggest health insurer after VHI and Laya. It sis 70pc owned by Aviva with AIB holding the other 30pc. Irish Life is buying the Aviva stake.
Irish Life was already a 45pc shareholder in GloHealthcare, and the Aviva Health deal will catapult it close to second-ranked Laya in terms of market share.
The new Irish Life health insurance business will have 400,000 private healthcare customers.
Insurers across Europe are being forced to assess their deployment of capital as a result of incoming regulations known as Solvency 2 which will force institutions to hold more capital as a precaution against potential losses.
It is understood that capital raised from a sale of the Aviva health business would be invested back into the other Irish arms, and that the decision to review the assets was driven by a review of the group's relative return on capital across different businesses.
VHI will continue to dominate the market with around one million health insurance customers. Laya has around half a million private health insurance customers.