VHI profits up, but will premiums come down?

Profits quite the achievement when private hospitals were off limits for chunk of last year

Chief executive John O’Dwyer described the results as ‘solid’. File photograph: Aidan Crawley

Chief executive John O’Dwyer described the results as ‘solid’. File photograph: Aidan Crawley

 

An after-tax surplus (or profit) of just more than €1 million a week was a tidy performance for State-owned health insurer VHI to record in a year of a global pandemic. This was 13 per cent higher than in 2019.

The insurer also added nearly 4,000 new customers during the period. This was quite the achievement when you consider that private hospitals were effectively off limits to members for a chunk of last year after being requisitioned by the State to provide capacity for Covid patients requiring hospitalisation. And hundreds of thousands of workers here were either laid off or forced to take a pay cut.

The company also returned €265 million to customers via two premium waivers, as a result of the private hospitals not being available to them and many procedures or screenings in those same hospitals being cancelled or deferred.

The average health insurance premium paid last year by VHI’s customers was €1,330, up marginally from €1,252 a year earlier. On the flip side, income from other insurance activities – such as travel – declined by just under €6 million in the 12-month period.

Another positive for VHI was that its claims bill reduced by a healthy 17 per cent to €1.15 billion, as a result of the lockdown restrictions.

Chief executive John O’Dwyer described the results as “solid” and noted a “number of positives” that could be taken from last year, including the provision on some healthcare services virtually as the company adjusted to the challenges posed by lockdown restrictions. There is no doubt more scope for innovation on this front in the years ahead.

Noting the increase in its profits, however, VHI customers will be interested in only one thing – will the price of their next premium be going up or down?

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