Hibernian's deputy chief executive, Mr Vincent Sheridan, will become the new chief executive of the State-owned health insurer, VHI.

Mr Sheridan (52) succeeds Mr Oliver Tattan, who left the company last month after two years to join a technology start-up company.

Mr Sheridan was previously chief executive of Norwich Union, which was merged with Hibernian last year.

His departure, after 27 years at the company, is a blow to the organisation as he was to take over as its chief executive in June when Hibernian chief executive Mr Pat McGorrian (57) was due to retire.

His arrival at the VHI will be welcomed coming at a time when the company is preparing for a new commercial environment that will allow it to extend its range of products and services in Ireland and overseas.

The Government is also waiting for a report from advisers on the future ownership structure of the VHI which could recommend a trade sale or flotation.

Speaking to The Irish Times yesterday, Mr Sheridan said he had decided to leave the company at the end of last year and was seeking a fresh challenge.

"If I stayed I would have been chief executive for 19 years and I didn't feel that was good for me or for the company."

Mr Sheridan said he was looking forward to the new job, describing his new role as very challenging.

He was approached to consider the VHI chief executive position at the beginning of this year and his appointment was confirmed at a board meeting yesterday.

Up to five of the VHI's senior management are understood to have also been considered for the position.

In a statement yesterday, the board of Hibernian said Mr Sheridan had put it on notice some time ago that he would be leaving the group in April and it had accepted his decision with regret.

Mr McGorrian will continue to lead Hibernian, according to the company.

Mr Sheridan joins the VHI on a five-year consulting contract where he will be acting chief executive to the board.

Mr Tattan was also employed on a consultancy basis, on yearly contracts, as a device to circumvent the public service pay limits.

Mr Sheridan took over as chief executive of the UK-owned Norwich Union in 1991 and led the transition of that company from a mutually-owned structure to a publicly quoted company.

Norwich Union subsequently merged with the Commercial General group and now trades as CGNU. Hibernian was part of Commercial General and was merged with Norwich Union's Irish operations last year.

Meanwhile, Hibernian has appointed four new directors to its board.

Mr Grant Barrans, managing director of Hibernian Life & Pensions, Mr Pramit Ghose, managing director and chief investment officer, Hibernian Investment Managers, Mr Tony O'Riordan, group finance director and Mr Gary Owens, managing director, Hibernian General Insurance, will join the board and the executive management team.