VHI set to enter life insurance market
Published 27/04/2016 | 02:30
STATE-owned health insurer VHI is set to announce that it is entering the life insurance market.
The move is expected to put further downward pressure on premiums for consumers.
It is the first expansion of the product offering from the VHI since it was authorised by the Central Bank last July.
The new product will be underwritten by Zurich Insurance and marketed by the VHI to its one million-plus customers over the phone, it is understood.
This is one of the largest customer databases in the country.
The move comes after Canadian-owned Irish Life said it was taking over both Aviva Health and GloHealth.
And the expansion move by VHI into life insurance coincides with rival Laya Healthcare planning to up the ante with its existing life insurance offering.
Consumer finance experts said the VHI move will further push down premiums for life cover.
Rates have fallen heavily in recent years due to intense competition in the life insurance market, and because fewer claims are being made due to people living longer.
Along with its core health cover, VHI already offers dental insurance and travel cover. It also has three SwiftCare emergency treatment facilities.
VHI posted a €49.8m net surplus last year on gross earned premiums of €1.46bn, but chief executive John O'Dwyer has been anxious to expand its offering and exploit its database of customers.
The insurer has a reinsurance deal with Warren Buffett's Berkshire Hathaway.
In 2014 the VHI extended a one-year deal with Berkshire to re-insure a chunk of its health insurance policies by four years. Around 60pc the company's policies will be re-insured by Berkshire. This saved the State having to put in between €200m and €300m to satisfy Central Bank rules on regulation.
The company had missed a series of deadlines that it needed to meet in order to be regulated by the Central Bank.
The European Union's highest court ruled in 2011 that the Government had breached EU rules by not requiring VHI to be subject to prudential regulation.
Last month the company said it was increasing the cost of a number of its health insurance plans by an average of 3pc from May 1.
A VHI spokeswoman had no comment when asked about the plans to sell life insurance.