How rocketing cost of health cover helped VHI make €56m profit
State-owned health insurer VHI has reported making bumper profits, just weeks after imposing a new price rise on its one million members.
The increase in premiums at the start of this month was the second in the past six months. The company said it had made a net surplus of €56.4m last year.
This was almost €11m more in profits than the previous year. The company was also able to boost its financial reserves.
The firm reported a fall in the cost of its claims paid out, a key factor when determining its pricing. Total claims paid out in 2016 amounted to €1.34bn, down €40m from 2015.
Dermot Goode, of totalhealthcover.ie, said there was a need for VHI to explain why it was hiking its premiums when its claims costs fell last year.
"We need more details from VHI on why it increased rates twice in the last six months when claims costs paid out have gone down," Mr Goode said.
Asked how his company could justify price hikes when its financial results were so good, VHI chief executive John O'Dwyer said the price rise this month was the lowest in the market. He said health insurance was a low profit-margin business, and he held out the prospect that there will be no further rises this year. "I can't guarantee it, but I am confident we won't have any more price rises this year," he added.