Oliver Tattan, Founder & CEO, Vivas Health and a UCD Chemical Engineering Graduate with UCD Engineering Students, Orla Flood, Caroline Green and Bill Murphy prior to delivering his NovaUCD "Entrepreneurs Live!" seminar in 2007

Hibernian, the insurance firm, is targeting a a 15 per cent share of the Irish health insurance market after acquiring a 70 per cent stake in number three operator Vivas Health.

Hibernian, a unit of UK plc Aviva, confirmed on Sunday that it was buying into Vivas by taking over the holdings of Dermot Desmond's IIU and stakes owned by Vivas management and staff. The remaining 30 per cent of Vivas will be retained by AIB, which already works with Hibernian through the companies' joint ownership of Ark Life.

Commenting on Sunday’s announcement, Vivas Health CEO, Oliver Tattan said:“The huge growth of Vivas Health over the past three years demonstrates the demand for competition in this market. The Hibernian acquisition of Vivas Health is an important next stage in the evolution of the company and the private health insurance market in Ireland.

“This deal represents very good news for Vivas Health members, employees and the Irish consumer. The combined forces of Vivas Health and Hibernian will enhance the overall level of competition in the private health insurance market. Hibernian is one of Ireland's largest and most successful financial institutions with activities spanning general insurance, risk management, pensions, life assurance and personal financial services. By combining forces, this will ensure that Vivas Health’s current and future members continue to benefit from the highest levels of innovation and value available in the market.”

The agreed price hasn't been disclosed but it is understood that Vivas has been valued at €45 million, based on the health insurer's gross assets of €88.9 million at the end of last year.

All Vivas staff will move to Hibernian but CEO Oliver Tattan will likely use the proceeds of his 22 per cent stake in some other business venture.

This transaction will be subject to regulatory approval. An application for approval will be submitted to the Competition Authority and the Financial Regulator.

Stuart Purdy, Chief Executive of Hibernian said that he was "delighted" to have completed the deal. Both companies have had a relationship since 2006, when Hibernian began selling Vivas products through its branch network.

Vivas has built up a position of about 7 per cent in the health insurance market since being founded in 2004 to take on VHI and Bupa (now Quinn Healthcare) with a €12.5 million equity fund-raising.

It has 2,000 corporate customers, including a number of large multinationals.

"There will be no change to any members' policies or benefits and all members should continue with their current health treatment plans unchanged," Hibernian said in a statement.

Vivas's most recent published accounts, for 2006, show that it had gross premiums of €29.8 million. The firm made a pretax loss of €262,394 that year and had accumulated losses of €6.8 million. It is believed to have generated revenues of €64 million last year and to have recorded a profit of less than €10 million.

More than half the population hold private health insurance because long waiting lists are still the norm in the Irish public health service.