The arrival of British company BUPA into the Irish health insurance market a year ago presented subscribers with a choice. But with that came a heavy measure of confusion - compounded by the launch of a new range of products by arch-rival, VHI, last week."Up to now everyone could a car as long as it was black," says BUPA Ireland chief executive Mr Martin O'Rourke of the pre-competition scenario. But now the picture has changed - and it has not all been at the VHI's cost. Mr O'Rourke believes the VHI, which gained 56,000 new subscribers in the past year, benefitted from the debate raised by BUPA's advent. BUPA currently has 36,000 subscribers and the figure is increasing. The day after last week's launch by the VHI, BUPA received 850 calls, compared to the usual daily average of 500, inquiring about its products."For many people it can be like black magic. Our arrival meant that people began asking what they were covered for. Of the 850 people who rang the day after the VHI launch, a large majority would be very confused. We take them through our brochure, which has been well imitated at this stage, and we explain it very simply. If people get on to you in the first place their interest has been raised."When we came into the market we were told that it was researching saturation point and new membership to health insurance was at 2 per cent per annum. But we had a fair idea once we introduced competition we would raise the interest to a very high level," he says."Of course, if you do that before you begin in business then obviously the competition, with an existing set up, will benefit. We reckon that the market is growing at 6 per cent per annum now. The increase in VHI's subscribers means there are more people for us to win from them in future years. They have had to introduce longer opening hours and brought in matching products. However, they have not moved on price; in fact they have gone the other way," said Mr O'Rourke (46).
He said that benefit consultants offering insurance advice to companies are now engaged in the market, an independent approach which BUPA welcomes. "It is their first time looking into this area. It is a protection from any sort of unfair advertising on the part of insurers and a very good consumer protection. The grilling they have given us has been very healthy.
"They have looked at the high costing plans such as BUPA Ireland's Essential Gold and VHI plans C, D and E. They actually say they are not really value for money, although we would say that Essential Gold is value for money."
The health insurance heartland - where the main battle lies - is BUPA's Essential Plus and VHI's Plan B, he says. More than 70 per cent of customers in both companies subscribe to these plans.
"VHI has now put price to the fore, as a result of what they did last week. They have followed our innovations - not all of them - but on open heart surgery, lowering the excess for out-patients, GP cover, consultants cover. They have not followed us on alternative medicine or on screening. Now we are saying that a small company of 100 people could save £7,500 per annum by taking out a policy with us."
Mr O'Rourke says BUPA cover includes every consultant and 76 hospitals. This compares to VHI cover in more than 100 hospitals. The VHI argues that it has agreements with more consultants nationally to accept its fees in full and final settlement of account.
