The present state of Irish health insurance market is a "disgrace"
International insurers share concerns about reform
HE is barely in the job a wet week, but Aviva Ireland boss Jim Dowdall is already making a name for himself as someone willing to stick his head above the parapet.
As Quinn teetered on the brink and most of his insurance boss peers kept their heads down, Dowdall presented himself for interview at both Morning Ireland and Newstalk.
Later, as Quinn's Monday High Court showdown loomed large, Dowdall was pencilled in for the Interview of the Week slot with this newspaper.
He was teed up to talk about the insurance industry at a time when the sector was hotter than ever, and to comment on the wider Quinn issues when the ink was barely dry on the court's decision.
Quinn's day of reckoning ultimately came early, but the wider Quinn issues haven't gone away and Dowdall has yet to give a feature interview since his appointment in January, so we ploughed ahead.
The first thing that strikes you about the forty-seven-year-old is that while he's the only one volunteering to be drawn into the Quinn debate, he has a way to go before being hailed as the insurance world's answer to Michael O'Leary.
A warm-up question about Aviva's current trading prompts a frustratingly corporate response -- "we're tracking well in all aspects of the business, in both retention and in new business acquisition".
Efforts to elicit any detail on Aviva's 2010 price increases prove similarly painstaking. The insurer took "rating actions" in 2009 that "positioned us well" for the year ahead, Dowdall says.
That "rating action" is eventually distilled to average increases of "5pc to 8pc" across the general insurance book, while Dowdall confirms the insurer has taken further "corrective actions" on household insurance in recent months, reflecting the €541m cost of the Big Freeze and last winter's floods.
The outlook for further rate increases remains anyone's guess. Dowdall progresses from "we always look at our rates and our markets" to "we have some plans in some small specific areas that we'll determine over the coming months", but he'll go no further.
Health insurance, Dowdall's home territory through his previous role in Vivas, is clearly more comfortable ground and the insurance boss finally begins to loosen up.
Aviva has about 270,000 members and is keen to grow that figure to 500,000, pronto. The growth target comes against an overall market in decline, with overall health insurance overage falling by 1.5pc or about 40,000 last year.
Dowdall says further "shrinkage" has already been seen in 2010, with the market contracting as much as 1.5pc in the first quarter alone, but be remains upbeat for the sector's prospects.
"As a country we can't afford to put the level of investment into the public health service required to maintain standards," he says. "We'll always have a significant number of people who buy health insurance because they want that peace of mind.
"If you look at the history over the last 20 years, we've never had a significant drop off in the numbers insured."
While Dowdall believes the outlook is good, he thinks the state of the Irish insurance market is a "disgrace" citing state-owned VHI's persistent failure to get its reserve levels up to the standards demanded by the Financial Regulator.
Other international insurers harbour similar concerns about the market place, indeed most are so unamused they refuse to have anything to do with health in Ireland until the market is reformed.
"I think other guys will play in this market because they'll look at the success Aviva has had," Dowdall counters, seemingly unaware of the paradox between Aviva's "success" in the market and the insurer's insistence that the market is a "disgrace".
As the only international plc already playing in the health market, Aviva is the shoo-in to make a play for beleaguered Quinn's healthcare spin off which it acquired from Bupa a few years back.
It's a prospect Dowdall doesn't deny. "Our intent was to grow organically, if inorganic growth opportunities come up of course we'll look at them," he says tellingly.
The problem for Aviva is that it doesn't yet know what type of deal Quinn's administrators will look to structure, and its representatives have so far been kept at bay.
"My understanding is they [the administrators] are not meeting with any other interested insurers or third parties yet," Dowdall says.
"They could sell the whole insurance business off as one entity or they could try to sell of different lines [ie health] individually but we don't know yet."
Dowdall says the health book looks like the "simplest" part of the Quinn business, but Aviva will "of course" look at whatever comes onto the market.
"The Financial Regulator has identified serious issues there so any insurance company needs to go in there with their eyes wide open," he adds, muddying the water lest we get too carried away with the 'Aviva poised to take over Quinn' line.
Dowdall leaves less room for ambiguity on the appropriateness of the actions taken by the regulator in putting Quinn into administration. Asked if the regulator was "right" to pursue Quinn in that way, Dowdall responds with a simple "yes".
"We believe that we need strong regulation in the Irish market and we believe that regulation should be non-negotiable," he stresses, adding that there are "questions to be asked" about how Quinn apparently got away with breaching the regulator's solvency thresholds for such an extended period.
For the record, Aviva's solvency is "in excess" of the regulatory requirements and Dowdall is ready and willing to comply with any new rules that might come from the regulator here or from the Europe-led Solvency II directive.
While Dowdall gives off an impression of a very hunky dory Aviva, the insurer formerly known as Hibernian has had its own troubles as well. Not that long ago, Aviva hit the headlines for all the wrong reasons when it announced plans to outsource several services to a centre in India.
The move was initially expected to cost almost 600 Irish jobs, but the insurer has since revised that down to the more palatable soundbyte of "400 roles have been transferred to Bangalore". Dowdall bristles at the topic, insisting the insurer still has "significant" call centres in Cork and Galway, has almost 2,000 staff here and is "absolutely committed" to the Irish market.
A bastion of that Irishness is the Aviva Stadium, to be launched amid a suitable amount of fanfare on May 14. Aviva is so enthused with its new outlet that it's not going to go down the route of O2, which tried in vain to get The Point Luas stop renamed as The O2.
"We have more than sufficient brand association with the Aviva Stadium," says Dowdall, as he rules out any plans to petition for the renaming of the Lansdowne Road Dart stop.
Aviva is hoping the stadium's launch will propel the insurer's brand even higher and help it to expand its lead on the competition.
Dowdall is looking ahead to a "two to three year" timeframe.
By the time it's through, he hopes Aviva's share of the health insurance market will have doubled from 13pc to 26pc, while its general insurance market share grows from about 17pc to "more than 20pc" and its life book goes from 16pc of the market towards the 20pc mark.
And who knows, on the way to achieving all that, along the way he might just lose the 'corporate speak'.