Irish Life leads the race to buy Quinn Healthcare
Published 17/03/2011 | 05:00
IRISH Life has emerged as the leading contender to take over Quinn Healthcare. Quinn has some 500,000 customers and imposed a second price rise this year on its customers.
Taking over Quinn Healthcare would give Irish Life, the State's largest life and pensions provider, an entry into the healthcare market.
It already sells pensions and life products to corporate clients but has no health insurance option, unlike its rival Aviva.
It is understood that Quinn Healthcare has premium income of around €300m a year and could sell for around €100m, sources indicated.
The health insurer announced a second price rise recently, which will take effect for those renewing or taking out policies from April 1.
This followed an average increase of 8pc that was announced just before Christmas.
The company said government-imposed cost increases for healthcare providers were the reason it had had to impose two hikes in three months.
But industry sources said it also indicated that its profit margins were tight, particularly as Quinn has some of the lowest-priced health-insurance plans on the market.
Quinn Healthcare has benefited from consumers switching to it after VHI raised premiums on some of its plans by up to 45pc earlier this year.
However, it has also suffered from existing customers giving up their healthcare altogether and others dropping down to lower-value plans.
Quinn Healthcare is part of Quinn Insurance but it is not in administration, unlike the general insurance side of the company.
The race to buy Quinn Healthcare is down to Irish Life and a joint bid involving Anglo Irish Bank and US insurance firm Liberty Mutual.
But it is understood that Irish Life is the frontrunner. The sale is being organised by investment bank Macquarie.
It could be the summer before the sale is completed, with approval likely to be sought from the Government.
A spokesman for Irish Life had no comment to make, nor did Quinn Healthcare.
The company was formed in February 2007 after the Quinn Group acquired Bupa Ireland.
It has around 300 employees, most of whom are based in Little Island, Co Cork.
The future of the private-health insurance market in the State is uncertain, with the new Government committed to bringing in a universal healthcare system.
What role private healthcare providers would have in that is currently uncertain.
A number of other bidders are attempting to take over the general insurance business of Quinn. They include Anglo Irish Bank.
Anglo and Liberty Mutual are also trying to buy the general insurance business, along with Swiss insurer Zurich, German firm Allianz and US firm Travelers.