Irish Life move set to spark health insurance price war
Published 10/03/2016 | 02:30
Irish Life is set to become a major force in the health insurance market after buying Aviva Health and GloHealth.
Medical insurance experts said the move is likely to lead to an intense price war and innovations in the market.
Irish Life is owned by Canada's Great-West Lifeco, one of the largest financial services groups in the world. It has $1.2tn in assets under administration.
Health insurance expert Dermot Goode, of TotalHealthCover.ie, said Irish Life will not be content to operate as number three in the Irish health insurance behind VHI and Laya. The new combined health insurer will have 400,000 customers.
Mr Goode said: "While this action effectively reduces the number of competitors in the market, it does bring one of the largest life companies in the world firmly into the market.
"I would expect that it won't be content with third position for long and will probably look to substantially increase market share."
He said this was good for consumers, as the most effective way to increase the number of members it has is to offer lower prices and better cover.
Irish Life is already number one in the life, pensions and investment market here.
Its move to take control of both companies will reduce the number of health insurers from four to three.
The deal is the biggest in the sector since Laya Healthcare was sold to American insurance giant AIG last year, in a transaction understood to have been worth in the region of €90m.
Aviva Health is Ireland's third biggest health insurer after VHI and Laya. It was 70pc owned by Aviva, with AIB holding the other 30pc. Irish Life is buying both stakes.
Irish Life had already owned a 45pc shareholding in GloHealth. It is now taking full control of both companies.
Head of GloHealth Jim Dowdall said the new Irish Life operation will offer "more innovation and more value" in health insurance.
Irish Life chief executive Bill Kyle said that the new company would provide a "compelling alternative" to the existing players and would become the health insurer of choice for consumers.
VHI has around one million health insurance customers. Laya has half a million customers.