Healthy start for new entrant to private insurance market
Glo beats customer switch target but still wary of VHI “subsidy”
Jim Dowdall, Glo Health chief executive. Photograph: Cyril Byrne/The Irish Times
These are tough times to be starting a business anywhere, but you would need a special brand of foolhardiness to dip a toe in the rapidly contracting health insurance market.
In a perfect storm caused by rising premiums and falling personal income, the sector is haemorrhaging customers – almost 200,000 in the past five years. Many of those still hanging on to their insurance have downgraded their cover. The trend seems set to continue as levies increase and medical inflation gathers pace.
Add to this the uncertainty surrounding Minister for Health James Reilly ’s plans for universal health insurance. Talk of cutting waiting times for public patients is admirable, but if achieved, what is the point of having private health insurance?
Yet into this turbulent scenario a new provider, Glo Health, opened its doors last July. And far from being beaten down by the prevailing gloom, it appears to have carved out a useful starting niche for itself.
Jim Dowdall, co-founder and chief executive of Glo, allows himself a modest pat on the back before getting onto the traditional sport of the private end of the health insurance market – bashing the VHI.
Glo, he says, has enjoyed “phenomenal success” since it started, with more than 40,000 people switching from other providers. The number sounds impressive but, in a market of 2.1 million subscribers, it amounts to a share of less than 2 per cent.
Still, it compares well to the start-ups by two previous entrants to the market, Vivas Health and Bupa, which attracted 12,000 customers each in their first year in operation.
“These numbers demonstrate to us that customers are crying out for alternatives that add value. They’ve voted with their feet,” enthuses Dowdall, a veteran of the sector as a former chief executive of Aviva Ireland.
In the corporate market, Glo has managed to persuade 32 companies to switch from existing providers. One of them is Facebook which, in a substantial early fillip, came over on Glo’s first day in business.
The company now employs 50 people, with a number of senior appointments, including a new head of claims, due to be made shortly. Having outgrown its original premises, Glo recently moved to a new building in Sandyford.
Dowdall says he and his partners spent 15 months researching the market before deciding on their product offering.
“We saw there was a gap in the market for real innovation, better value and policies that were more relevant to what people wanted.”
The health insurance sector has only four players, he points out, whereas up to 15 sustainable, profitable companies are to be found in other insurance sectors.