VHI's coup is good news for health insurance customers
STATE-OWNED VHI Healthcare has pulled off a massive coup in getting the investment company run by the world's most successful investor to back it with a re-insurance deal. Enormous credit is due to the company and its chief executive John O'Dwyer for getting Warren Buffett and his Berkshire Hathaway to cover around €700m of the risks of the VHI.
Mr Buffett's insurance giant, Berkshire Hathaway, will provide re-insurance cover for up to €700m worth of claims risks of the VHI. The VHI has not had a re-insurance arrangement in place up to now – a way of effectively laying off some of its risk with a larger insurance company. The deal means that some of the risks on premiums and claims being made by VHI customers will now move over to Berkshire Hathaway.
Taxpayers will gain from this deal as it will reduce by between €80m and €90m the amount of state funds that will have to be put into the VHI to boost its reserves ahead of moves to have it regulated by the Central Bank.