A new health insurance company backed by Aviva Insurance Ireland and led by a group of industry veterans launches on Friday with claims that it can offer “meaningful savings” to customers, following a series of price hikes by the three existing players in the market.
The joint venture, Level Health, is led by chief executive Jim Dowdall, a former head of Aviva in Ireland, and chaired by one-time VHI head Oliver Tattan. Aviva Insurance Ireland will underwrite the company’s health policies.
Mr Dowdall said each of Level Health’s four different plans is cheaper than the nearest comparable plans offered by the three other providers, VHI Healthcare, Laya Health and Irish Life Health, who have a total of 350 different plans between them.
The firm says, for example, that its so-called Plan C for a family of four is, at a current annual cost of almost €3,158, an average of €500 cheaper than comparable offerings from the other three.
“The launch of Level Health marks a pivotal moment for a broken Irish health insurance market,” Mr Dowdall said. “For too long, customers have been overwhelmed by confusing plans, limited options, and a lack of real alternatives.”
Aviva has invested €15 million of equity in Level Health, according to Companies Registration Office filings. Mr Dowdall said that the total committed by Aviva and the venture’s founders, which also include industry figures Stephen Loughman and Ruth Bailey, amounts to “in excess of €20 million”.
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Aviva sold its previous health unit, Aviva Health, in 2016 to Irish Life which also moved at the same time to buy out the 51 per cent of another provider, GloHealth, it did not already own. The combined business was renamed Irish Life Health and is now the smallest of the three existing private health players in the market.
The second-largest player in the market, Laya Healthcare, was acquired for €650 million by Axa Ireland, the largest general insurance company.
State-owned VHI remains the largest health insurer in the market with more than 1.2 million medical coverage customers, giving it almost a 49 per cent market share.
The three existing players have announced multiple price increases in the past year, generally citing increases in the volume and costs of healthcare claims.
Meanwhile, Aviva Insurance Ireland’s UK parent, Aviva plc, published a trading update on Thursday showing that the Irish general insurance unit posted an 8 per cent increase in gross written premiums for the first nine months of the year, to £375 million (€451 million).
Irish premiums were up 11 per cent when currency effects were stripped out, reflecting “strong rate and new business growth in both personal and commercial lines”, it said.
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The latest figures from the Central Statistics Office show that car insurance premiums rose 11 per cent in the 12 months to October, while home coverage rates increased 7.6 per cent. Insurers have attributed much of the increase in motor rates to a rise in damage claims, reflecting a surge in costs of labour and spare parts.
However, Aviva Insurance Ireland also saw a pickup in profitability this year as its combined operating ratio — which compares claims and expenses to premiums earned — fell to 89.8 per cent from 96 per cent for the year-earlier period.
This was driven by a “material” release of reserves that had been set for prior-year claims, as the Supreme Court effectively upheld new guidelines for generally lower payouts. A ratio below 100 per cent indicates an insurer is writing business profitably.
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