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Thursday 22 February 2018

New firm to spark health insurance price war

Charlie Weston Personal Finance Editor

FAMILIES are expected to save up to €500 a year as a new health insurer shakes up the market when it opens for business on Monday.

GloHealth, which is backed by Irish Life and international insurance giant Munich Re, will spark a price and benefits war among medical insurers.

It is not clear if all hospitals and a full range of benefits will be covered by the new insurer -- but the lower prices and free travel cover offers are expected to produce a quick reaction from rivals keen to protect their market share.

VHI, Laya (which used to be called Quinn Health) and Aviva are expected to reduce their prices and offer better benefits in reaction to the new player.

The new firm, set up by former Aviva boss Jim Dowdall, will target families, offering free cover to children under three years of age and the option of free travel insurance.

Unlike existing insurers, the offer for young children will not just be a special offer for a month, but will apply all year round, the Irish Independent has learned.

There will be just four to five plans, but the cheapest will come in at around €1,500 for a family of two adults with young children.

This compares with €2,000 for a similar plan with rivals VHI, Laya and Aviva.

One health insurance expert said last night: "This is brilliant as we are likely to see a price and benefits war breaking out among insurers."

The fourth player is set to focus on the tens of thousands of people who are turning away from health insurance because of rising costs, and it will also try to poach customers from the other big three players in the market.

GloHealth will offer basic health plans, but those who sign up will have the option of free add-ons, such as travel insurance or a free medical check-up.

The basic plan will start at around €775 per adult. Children over three will be charged similar prices to those imposed by VHI and Laya, of around €200.

GloHealth customers will also be able to pay for additional benefits such as cover for GP visits, and it will also offer cash plans, where people get payments for every day they are in hospital or if they have to attend a doctor, but the medical procedure is not covered.

Health premiums have shot up by 50pc in the past 18 months, putting a huge squeeze on household budgets.

Around 2.139 million people (46.6pc of the population) are covered by private health insurance, but up to 1,000 people a week are dropping their private health insurance policies in a bid to save money.

Premiums

A recent survey commissioned by regulator, the Health Insurance Authority, showed that people view private health insurance as a highly valued commodity, but many are struggling to keep their cover due to the cost.

It is understood the group sees a huge opportunity to offer lower premiums as there are two million people with health cover and just three players.

In contrast, there are 20 different general insurers in the market.

The group will be headed up by Mr Dowdall and Stephen Loughman as chief financial officer. The two men founded health insurer Vivas, which was bought over by Aviva. Former VHI boss and a founder of Vivas Oliver Tattan is also an investor.

Munich Re is providing re-insurance. The massive German company made profits of €782m in the first three months of this year. Irish Life will distribute GloHealth products through its broker network.

There was no comment from GloHealth or Mr Dowdall last night.

Irish Independent

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