VHI Group’s net surplus slumped by almost half last year as claims rose due to rebounding demand at its key private health insurance arm for healthcare services following the worst of the pandemic and its investments portfolio posted an €18.6 million loss.
The State-owned company, which also sells international travel and medical, dental and life coverage as an intermediary and operates a network of healthcare facilities, said in a statement on Wednesday that its surplus fell to €34.3 million from €65.3 million for the 2021, marking a 47.5 per cent decrease.
The company’s main subsidiary, VHI Insurance, paid out €1.43 billion in claims, representing a 10 per cent increase on the year as the cost of “meeting customers’ healthcare needs increased in the second half of the year as demand for healthcare services returned to pre-pandemic levels”, it said.
Earned premiums increased by 0.7 per cent to €1.6 billion, after the company waived a further €186 million of premiums in March last year at a time when claims continued to be depressed because of limits to access to healthcare services during the pandemic.
That brought the total amount of rebates since 2020 to €450 million. However, the company said in January that it would be increasing plan costs by an average of 4.8 per cent this year, blaming increased demand for healthcare and the rising costs of providing services to customers.
Private insurance membership grew by 23,400 to almost 1.18 million last year.
Further disclosures on the VHI Insurance unit’s performance, contained in a so-called solvency and financial conditions report posted on its website, show that its investments portfolio made an €18.6 million loss last year, as the value of bond investments declined in an environment of rising interest rates. Bond values move inversely to market interest rates.
The portfolio, valued at €1.15 billion at the end of last year, is made up mainly of government and corporate bonds.
Income from VHI’s other insurance products and services, sold by the company as an intermediary for other underwriters and including VHI MultiTrip travel coverage, VHI Dental, VHI International and VHI Life, jumped to €37.8 million last year from €26.2 million recorded in 2021.
Meanwhile, activity across VHI Urgent Care centres increased with more than 130,000 interactions with patients last year, up 32 per cent on 2021. In February 2022, VHI opened its state-of-the art VHI 360 Health Centre in Carrickmines in south Dublin.
“Overall in 2022, there was an increase in claims volumes, a welcome development as it means our customers are now better able to access healthcare services to meet their needs on a timely basis following the challenges of the previous two years,” said group chief executive Brian Walsh, who took on the role on a permanent basis at the start of this month.
Mr Walsh, who previously served as chief financial officer of the group, was named interim CEO in May 2022 following the departure of previous incumbent John O’Dwyer.
