Vhi Healthcare today announced a surplus after tax of €54.3m for its consolidated business has been recorded. This includes a once-off credit of €38.2m relating to the write-back of curtailed retirement benefits.  Excluding this one-off item, the surplus would have been approximately €16.1m. The private health insurance element of Vhi Healthcare’s business was loss making with an underwriting loss of €7.2m recorded.

Earned premium of €1.43bn was recorded in 2012 (an increase of almost 9% on 2011) against claims incurred of €1.39bn, an increase of 13%.  This was balanced by a strong performance by the diversified businesses, a substantially improved investment return and an improved operating expenses ratio of 6.2%.

 John O’Dwyer, CEO, Vhi Healthcare, said: “2012 was a challenging year for Vhi Healthcare, however the company delivered a steady performance in a declining market.  Our focus on cost containment delivered savings of over €100 million in 2012 and our investment performance was strong, marginally improving our financial position. While we delivered a surplus, the core health insurance business continues to be loss making. This is due to the aging profile of our customer base and the lack of an effective risk equalisation scheme.”

He added: "“Securing authorisation by Central Bank of Ireland (CBI) is our priority for the year ahead. We have made good progress in relation to internal readiness to meet governance and compliance requirements. While the surplus recorded this year is very welcome, we will need to build on this in the coming year as ultimately we will need to record a surplus of at least €60m each year if we are to maintain the correct solvency level required for authorisation."

Claims ratio of 92.9% (versus 90.8% the previous year) means that of every €100 received in premium income almost €93 is spent on the medical care needs of customers.

Key Stats

• Vhi Healthcare has a 56% market share yet pays approximately 75% of the claims .
• Vhi Healthcare has a 90% share of the over 80s , 80% of the over 70s and 67% of the over 60s.
• In the last 8 years Vhi Healthcare has experienced a  29% reduction in its customers under age 60 while at the same time it has seen a 12% increase in its customers over age 60. 

Between 2009 and 2012

• The number of Vhi customers  over 80 has increased by 33%.
• The number of Vhi customers over 70 has increased by 25%.
• The number of Vhi customers over 60 has increased by 15%.

The annual report is not yet online.

Check out our subscription service, Finfacts Premium , at a low annual charge of €25.