BUPA Ireland has announced that it is to withdraw from the Irish health insurance market to avoid having to pay rival company VHI E161 million as a risk equalization payment over the next three years.
The company is not accepting any new customers nor will it renew existing customer contracts. This is the first step in the company’s closure plan. However, BUPA said that it will continue to provide a high standard of service until all claims are dealt with and all contracts have expired.
The decision was forced upon BUPA following the scale of the required payment to VHI, which is currently costing the company a staggering E1 million a week. Indeed, the E161 million in payments over three years would far exceed its estimated surplus of €64 million in this period.
Commenting on the decision to withdraw from the market, BUPA Ireland managing director Martin O’Rourke said: Irish consumers are the real losers as the market will be restored to a virtual monopoly. Irish consumers have benefited from the choice, innovations and quality of service we have brought to the market over the past ten years and it is with great sadness that we must begin the wind-down of our business.
Following the BUPA announcement, the irish government is set to consider the break-up of VHI in the interests of competition, according to Ireland Online.