Irish insurance operator the Quinn Group yesterday confirmed that it would create some 500 new jobs in addition to securing 300 existing jobs with its takeover of Bupa Ireland's business and entry into the health insurance market.

Quinn Group chairman Seán Quinn said the acquisition of Bupa Ireland Ltd had given the company the platform to become the leading health insurer in Ireland through offering competitive prices as it had already done in the motor insurance market through Quinn Direct.

Mr Quinn said the new company, Quinn Healthcare, would take over Bupa Ireland's operation at Fermoy in Cork which currently employs 300 people and would increase staff numbers to 800 on a phased basis over the next four to five years as it expanded business.

Speaking at the launch of Quinn Healthcare, Quinn Group general manager Colin Morgan said the company was confident reform of the private health insurance market, pledged by Minister of Health Mary Harney, would enable the company to flourish.

Mr Morgan noted that Ms Harney was currently considering reports from the Health Insurance Authority, the Competition Authority and a group chaired by Colm Barrington. Quinn Healthcare would await whatever proposals Ms Harney made on foot of these reports.

Both the Government and Ms Harney were in favour of greater competition as was the European Commission and Quinn Healthcare was confident that this commitment to competition would lead to "a more level playing field" in the market, he said.

He said Quinn Healthcare had no difficulty with risk equalisation as a general principle but the manner in which the principle was currently applied because of VHI's dominant position in the market was giving VHI a huge advantage over new entrants.

This would have to be addressed by the Government and Quinn Healthcare was confident the Government would deliver on ensuring fairer competition.

If it didn't, the company would not rule out taking legal action, he said.

Mr Morgan stressed that Quinn Healthcare was committed to the health insurance market "for the long haul" irrespective of what the Government decided on foot of the various reports and he expressed confidence that the company would grow its market share.

The Quinn Group had a proven record of growing its insurance business and, combined with the established health insurance business that it was taking over from Bupa Ireland, it provided a good basis upon which to expand the business, he said.

"We believe the consumer wants competition in the market and we believe we are really going to up the ante in that regard. We've done it in general insurance over the last 11 years and we've done it in terms of Quinn Direct in the motor insurance market.

"We've bought a successful business in Bupa Ireland and we feel a combination of that along with our experience in the motor side allows us to be competitive.

"We've always built up our business by being competitive and offering quality product with excellent service."

Mr Morgan said that, while he did not believe that Quinn Healthcare would be able to reduce existing prices because of the nature of medical inflation and expansion of treatments, the company had pledged to freeze prices for the remainder of 2007.

Already Quinn Healthcare was able to offer savings of around €391 per year for a family of two adults and two children compared to a similar VHI plan and savings of €362 per year compared to an equivalent plan from Vivas, he said.

Asked about the expansion in Fermoy, Mr Morgan said that the company has some capacity at the Bupa premises at Mill Island but that it was actively reviewing a number of sites around Fermoy on which to build new offices to accommodate the planned 500 extra jobs.