Vivas vows to shake up health insurance industry
The new private health insurance company that entered the market today promised to challenge the lack of competition in the industry.
Vivas Health will be competing with State-owned VHI and British health insurer Bupa for a share of the €1bn health insurance market.
It is hoped the newcomer, backed by financier Dermot Desmond’s investment vehicle IIU, could set-off a price war bringing in a reduction of costly premiums.
Dermot Ryan, chief executive of the Health Insurance Authority (HIA), said: “We welcome any increase in competition in the private health market that delivers value for money benefits.
“Competition should have an effect on the price but it remains to be seen.”
Vivas Health is headed by Oliver Tattan, who was chief executive of VHI for three-years, and finance director Stephen Loughman, who also has experience in the state-owned company.
Vivas Healthcare said its plans would mean an average saving of 20% for customers compared with other insurers.
Mr Tattan said: “The private health insurance market is characterised by lack of information, lack of competition and consumer inertia.
“The arrival of Vivas Health will result in real competition in the private health insurance sector in Ireland for the first time.”
Vivas Health, which is regulated by the HIA, said it was working to break up the duopoly in the Irish market.
Bupa Ireland currently covers less than 20% of the market, while VHI has around 1.5 million people on the books, accounting for 80%.
A small section of the market was also taken up by groups like the gardai and state-owned ESB company who offer healthcare for their own staff.
One out of every two people has already bought a private health insurance plan.
A survey carried out by the HIA last year revealed people were reluctant to change health insurers.
“People are slow to change financial service products generally,” Mr Ryan said.
The private company said it will offer three distinct plans designed to offer a customer flexibility.
The chief executive said: “We allow a consumer to ensure that their plan is tailored for their stage of life. They get a relevant product and only pay for the services they are likely to use leading to average savings of up to 20%.”
Vivas Health main family plan offering level two protection covering two adults, one student and two children costs €1,373, with the same adult plan costing €421.
The new company said a similar family plan from VHI would cost €1,523 or €484 for an adult plan.
The Vivas plan offers up to €100,000 for accident and emergency hospital treatment abroad, with full cover in a private room in an Irish public hospital.
AIB bank have invested €7m in the company for a 30% stakeholding.
The private health insurance will be on offer in the bank’s branches around the country, after AIB received approval from the Irish Financial Services Regulatory Authority for the multi-million euro investment.
VHI Healthcare chose today to launch a new health insurance package.
Its latest offering, LifeStage Choices, contains three sets of plans to offer people varying cover over their lifetime.
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