May 30, 2024

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Boost for competition as Aviva joins forces to launch new health insurance provider

3 min read

The move will be a boost for consumers, but comes at a difficult time for existing players VHI, Laya and Irish Life Health.

VHI made a loss last year, while all three players have been forced into a raft of price hikes due to rising claims.

Mr Tattan and former Irish Life Health boss Jim Dowdall, along with Mr Tattan’s associate Stephen Loughman, have formed a new company called Douglasdale.

All three have a track record in founding and running health insurance ventures.

Aviva Insurance and Douglasdale will form a 50/50 joint venture to launch the fourth health insurer in this market.

Aviva has confirmed the launch of the new health insurance provider. The name of the new provider has not been released, but experts said it would inject much-needed competition into the market.

The new provider has yet to get regulatory approval from the Central Bank and the Health Insurance Authority but is expected to launch later this year.

Today’s News in 90 seconds – 18th April 2024

Aviva said in a statement: “Aviva announces that its Irish business is investing into a new start-up health insurance business in the Irish market.

“This investment, which is subject to regulatory approvals, will result in Aviva taking a 50pc share in a new private health insurance business established by a group of senior executives with significant experience in both setting up and running health insurance businesses in Ireland.”

It said that subject to regulatory approvals, the new business would begin selling private health insurance in the second half of 2024.

Aviva Insurance Ireland chief executive Declan O’Rourke said: “Aviva is delighted to support the set-up of an exciting new health insurance business in Ireland. This is great news for Irish consumers as it will provide greater choice and value. “This investment expands Aviva’s offering in Ireland to General, Life and Health Insurance and further demonstrates Aviva’s commitment to continue to grow in Ireland as a leading financial services provider”.

The planned new venture was first reported in The Phoenix magazine.

Aviva has been in the health insurance market in this country previously but sold out, with Irish Life eventually picking up that business.

However, interest in the health insurance market here perked up when French insurance giant Axa agreed last year to buy Laya Healthcare for €650m, considered a huge price.

Laya is the State’s second-largest health insurer. It has a 28pc share of the Irish health insurance market, serving 690,000 members.

Experts speculated that Aviva, which has previously offered health insurance here, wants to ensure its entire offering here now matches that of Axa. It has a large health insurance business in UK.

Aviva is one of Ireland’s leading insurers, offering home, motor, commercial and travel insurance. It also provides pensions and investments to customers. It is the largest general insurer in this market, with a market share of more than 20pc.

Mr Tattan has a track record in running and founding health insurers in this market. He is a former chief executive of VHI and after that he founded Vivas, with backing from billionaire Dermot Desmond. It was sold to Aviva Insurance and renamed Aviva Health.

Mr Tattan also founded health insurer GloHealth with Jim Dowdall, who ran Irish Life Health for years.

GloHealth and Aviva Health would eventually be merged and taken over by Irish Life to create Irish Life Health.

Ruth Bailey, a long-term associate of the three, is also involved in the new venture.

Health insurance expert Dermot Goode of TotalHealthCover.ie said more choice was to be welcomed for hard-pressed consumers.

He said a new entrant would need to build scale quickly, resulting in competitive pricing and enhanced benefits for all.

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