Fourth health insurance group enters market
THE HEALTH insurance market in the Republic is set for its biggest shake-up in more than a decade after a fourth provider enters the market from later today.
Glo Health is being set up by three former executives with Aviva, the third largest insurer in the Republic. Insurance company Irish Life is to take a 30 per cent stake in the new company.
It plans to offer just five products aimed mainly at a younger market in the initial stages but will allow people to tailor-make their policies in a way that the three other providers in the market do not currently do. This pick-and-mix arrangement could see its pricing models come in substantially lower than some its more long-standing rivals.
Glo Health is being set up by Jim Dowdall, Stephen Loughman and Oliver Tattan, the chief executive and driving force behind Vivas Health Insurance which was subsequently taken over by Hibernian before becoming Aviva.
It is understood the new company is to target the corporate market in a serious way and it has already secured the business of at least one blue chip company.
Industry sources said the company is likely to come to market with three comparatively low-cost policies catering for the majority of the market and two appealing to those interested in high-end and more expensive plans.
“The company is going to offer health insurance in a completely different way and it will see people given more flexibility in terms of what they can and cannot have covered,” one industry source told The Irish Times yesterday. “The three individuals behind the new company will also be coming to the market having learned a lot with Vivas and they will be able to use that experience to challenge for market share very quickly,” the source continued.
While details of the policies to be offered will not be announced until this morning, the company will use free health insurance to the under-threes as a carrot aimed at attracting people with young families to switch providers or, if they have exited the market in recent years, return to it at a more affordable level.
The company is being backed by the German re-insurer Munich Re. While Irish Life will have a 30 per cent stake in Glo Health it is unlikely to play a major role in the day-to-day running of the business.
Irish Life is believed to have been one of the main bidders for Quinn Insurance last year. The company was eventually sold to senior management in a management buy-out, backed by international re-insurance giant Swiss Re.
The entry of a new player into the market comes at a time when health insurance price rises have forced about 6,000 people a month to abandon their policies and it may lead to a price war and force the three other players in the market to match the new company’s approach when it comes to tailor-making policies for individual customers.
VHI, Aviva and Laya Healthcare, which was formerly Quinn Healthcare, are the other three providers in the health insurance market. Just over two million people are covered by health insurance in Ireland.