Minister Reilly welcomes VHI annual result for 2013 and major reinsurance deal with Berkshire Hathaway
Minister for Health James Reilly TD., today welcomed the announcement by VHI Healthcare of its annual results for the year 2013. The Minister is pleased to note the positive financial results – €65m profit after tax. This is an improvement of €10.7m over the corresponding period last year (when reported profits were €54.3m) and represents a marked improvement on the figures for 2011 (€7.4m). This is a positive indication of the future sustainability of the Irish private health insurance market.
The Minister would like to commend the new leadership VHI management has shown by successfully focusing on aggressive cost control measures that have delivered such positive results. The Minister has consistently emphasised the need for much greater cost control in the private health insurance industry so that premiums are affordable for as many people as possible. The improved financial results have been achieved on the back of claims cost management resulting in a reduction in cost of claims of 2.1% – or €30 million. In addition VHI sees driving down costs as a core focus of the business for the future, making significant improvements in the areas of claims management and provider management.
In 2011, the indications were that VHI would be seeking Exchequer funding in the region of € 293 million. The Minister welcomes the fact that VHI has negotiated a further reinsurance deal with Berkshire Hathaway for a four-year period 2014-2017. Today’s announcement means that VHI Healthcare believes it can achieve the solvency levels required for authorisation without the need for capital from the Exchequer. This is a remarkable achievement by any standards. The improved annual results, new reinsurance deal and fall in claims costs will strengthen its case for authorisation by the Central Bank of Ireland.