The entry into the health insurance market of a third player holds out the prospect of more choice for the consumer and of lower prices.
The first of these promises is self-fulfilling while the truth of the second will only become apparent in time. Vivas, which is backed by AIB and Mr Dermot Desmond's International Investment Underwriting, is offering a range of products which it says allows individuals to better tailor their health insurance cover to suit their needs.
It also claims to be up to 20 per cent cheaper than the two existing players, the State-owned VHI and the Irish arm of the British healthcare group BUPA.
The arrival of BUPA in the Irish market in 1996 introduced an element of competition but the two companies appear to have co-existed relatively comfortably ever since. VHI remains the dominant player and, thanks to large Government-sanctioned price increases, has been consistently profitable. BUPA does not disclose its figures for the Irish market, but its continued presence here can be taken as an indication that it also finds the market profitable. Its critics would argue that it has prospered by concentrating on the more lucrative areas of the market - such as company schemes full of young employees - rather than by taking on VHI in the wider consumer market. However, this is not a view upheld by the Health Insurance Authority which regulates the sector.
The arrival of Vivas should, if nothing else, shake up what was in danger of becoming a dysfunctional relationship that was not in the best interest of consumers. VHI has been quick to respond, launching its own suite of tailored and potentially better-value products on the same day as its new rival opened for business. BUPA has taken a more relaxed approach, saying it welcomes the competition.
A similar shake-up would be welcome in the markets for motor and general insurance. Figures released by the Irish Financial Services Regulatory Authority this week confirm that the industry is once again strongly profitable, thanks in part to Government sponsored reforms of the motor insurance market. Profits in the non-life insurance sector - which includes both motor and commercial liability - were €757 million last year and are set to top €1 billion this year.
Motor and other premiums are coming down, we are assured by the Irish Insurance Federation, but doubt lingers as to whether the fall in premiums matches the rise in profits. The entry of a combative new player into what is now a profitable market would be one way of ensuring that premiums are competitively priced.