Vhi, the Irish State health insurance company, said today that on the publications of its accounts for the year ended February 28, 2008, that it made a surplus of €55.4m from day to day operations and together with a risk reserve of risk reserve of €56.8 million, the total surplus amounts to €112 .2 million.

Summary of Financial Performance:

During the past year Vhi earned premium income of €1,153m and paid out €1,005m to meet its customers' medical needs.

The Accounts show a surplus of €55.4m which was generated from day to day operations compared to €33.9m a year ago. This operating surplus equates to 4.9% of premium income. The total surplus for the year amounts to €112 .2 million (€69.5 million a year ago) and comprises two elements i.e. €55.4 million on day to day operations and the release of the unexpired risk reserve of €56.8 million.

The results also show that there was good progress in improving the financial strength of Vhi Healthcare with an increase in the solvency ratio from 28% to 35%, excluding potential Risk Equalisation receipts relating to 2006 and 2007 of €41.6m which would increase Vhi Healthcare's solvency levels to 38.7%.

Operating cost ratio was just below 8% of premium income which it is claimed "makes Vhi Healthcare the most efficient operator in the Irish health insurance market and compares favourably with general insurers and international private health insurers."

During the year ended, Vhi Healthcare paid out over €1 billion to meet its 1.55 million customers medical needs. The pay-out ratio to premium income was 87% in the past year which is significantly higher than our competitors and during the past year Vhi customers availed of 535,000 medical procedures, according to the company..

Vhi Healthcare paid out €165 million in terms of cancer treatment, €129 million for cardiac care, €111 million for orthopaedic care, €53 million in respect of psychiatric care and €49 million for treating respiratory problems. Vhi contributed €41 million to the cost of delivering over 15,000 babies and over €37 million was paid
out in respect of children's illnesses.

New legislation requires the VHI to obtain an insurance licence and be regulated by the Financial Regulator from January 1 2009. The company says it is currently filing an application with the regulator. The regulator normally requires a solvency ratio - which determines how much VHI must hold in reserve - of 40%.

According to Jimmy Tolan, Chief Executive Vhi Healthcare "Vhi Healthcare is the only specialist health insurance company in the Irish market with over fifty years experience. We are completely focused on ensuring that our customers can access high quality healthcare at the most affordable price in the most appropriate medical setting. To achieve this we continuously negotiate the most favourable terms with all our medical providers. We also continue to provide cover for the widest range of facilities and the latest drugs and technologies available on the market."

He continued: "Our focus has always been on the overall quality of patient care and our patient satisfaction survey clearly shows that standard of care and quality really matter to our customers. During the year we announced that all new and existing private hospitals seeking cover from Vhi Healthcare would be required to achieve accreditation with one of the accreditation bodies by December 2008."

Over 350,000 Vhi customers have availed of MultiTrip travel insurance product, while 100,000 patients have obtained medical services from the Vhi Swiftcare Clinics and 38,000 customers are now insured under our dental care plan.

Community Rating and Risk Equalisation: