Business

Aviva to re-enter health insurance in joint venture with ex VHI boss

The as yet unnamed venture is to begin selling private health insurance in the second half of 2024

Aviva plans to launch a joint venture with a group including the insurer’s former chief executive, Jim Dowdall, and one-time VHI head Oliver Tattan. Photograph: Collins

Joe Brennan
Thu Apr 18 2024 - 16:53

Aviva in Ireland is getting back into health insurance eight years after exiting.

It plans to launch a joint venture with a group including the insurer’s former chief executive, Jim Dowdall, and one-time VHI head Oliver Tattan.

The new venture – which has yet to be given a name – will commence selling private health insurance in the second half of 2024, subject to regulatory approvals, Aviva said in a statement on Thursday.

“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,” said Declan O’Rourke, chief executive of Aviva Insurance Ireland.

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“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.”

Aviva sold its previous health unit, Aviva Health, in 2016 to Irish Life. Irish Life also moved at the same time to buy out the 51 per cent of another provider, GloHealth, it did not already own. The combined business was renamed Irish Life Health and is now the smallest of the three existing private health players in the market.

The second-largest player in the market, Laya Healthcare, was acquired for €650 million by Axa Ireland, the largest general insurance company. Laya traces its roots back to the formation of Bupa Ireland in 1997 and also went through periods of ownership by businessman Seán Quinn, the company’s management team, and, more recently, US insurance giant AIG.

State-owned VHI remains the largest health insurer in the market with more than 1.2 million medical coverage customers, giving it an almost 49 per cent market share.

Mr Dowdall served as chief executive of Aviva Ireland between 2010 and 2011. He had joined the business in 2008, after Aviva acquired Vivas, a health insurance company he cofounded in 2004 with Mr Tatten.

The executive went on to co-found GloHealth with Mr Tatten, before becoming managing director of Irish Life Health in 2016. He stepped from that role in 2021, but remained a strategic adviser to the business until April last year.

Mr Tatten served as chief executive of VHI between 1998 and 2001 and has been a serial entrepreneur ever since.

The third figure in the group planning the Aviva joint venture is Stephen Loughman, a former actuary with VHI during Mr Tatten’s time with the company, who would go on to serve as CFO at Vivas, GloHealth and Irish Life Health.

Health insurance premiums rose by an average of 10 per cent last year to €1,594, according to the Health Insurance Authority (HIA), amid a rising number of claims and costs. VHI and Laya have increased their coverage costs again in the early months of this year.

The planned new entrant “is welcome news for all consumers who are struggling with soaring health insurance costs and are finding themselves under financial pressure to maintain their health cover”, said Dermot Goode of Totalhealthcover.ie.

“Ultimately, there’s nothing like extra competition to drive better value for all consumers and employers.”

Despite the increased cost, the number of individuals with private coverage rose last year by 1.6 per cent to 2.48 million, HIA said in its latest annual market report.

Joe Brennan

Joe Brennan

Joe Brennan is Markets Correspondent of The Irish Times

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