Vhi’s Surplus Plummets to €34.3m: Claims Costs Skyrocket by 10%

Vhi's Surplus Halved as Healthcare Demand Returns to Pre-Pandemic Levels, Annual Results Show

Vhi, Ireland’s largest health insurer, has reported a 47% drop in its surplus for the year 2022. The decrease was attributed to the rising demand for healthcare services, which returned to pre-pandemic levels, and the increasing cost of covering claims. The company’s annual results show that it added 23,400 customers to its private health insurance business, bringing its total to 1,177,600, driving the increase in gross income from premiums to €1.6bn, up from €1.59bn in 2021. However, after tax, the company’s surplus for 2022 came to €34.3m, a significant drop from the €65.3m reported in 2021.

According to Vhi, the amount paid out in claims rose by 10% to €1.425bn, compared to €1.295bn the previous year. The increasing costs in covering claims came in the second half of the year as demand for healthcare services returned to pre-pandemic levels. The company also cited a rise in the costs of delivering healthcare due to increases in wage, energy, and other costs, including infection control.

Vhi added that a reduction in the value of its investment portfolio, as well as increased operating costs from investments in healthcare and technology, also impacted their yearly surplus. Despite the impact of the pandemic, the cost-of-living crisis, and the fall-out from the war in Ukraine, the company said it delivered a strong financial performance.

Brian Walsh, chief executive of Vhi Group, said the increase in claims can be seen as a “welcome development” as people are now better able to access healthcare services on a timely basis following years of challenges during the pandemic. He added that costs and affordability are a constant priority for Vhi. The company believes it is essential that people in Ireland can continue to purchase affordable health cover irrespective of their age, health profile, or previous claims history.

Vhi ended 2022 with free reserves of €949m, compared to €859m in 2021. Income from the company’s other insurance products and services came to €37.8m, an increase from the €26.2m recorded in 2021.

The COVID-19 pandemic has had a significant impact on the healthcare industry globally, with many providers struggling to cope with the influx of patients. In Ireland, the pandemic has highlighted the need for a robust and sustainable healthcare system that can provide timely and affordable care to all. As the country continues to grapple with the pandemic and its aftermath, Vhi’s financial results underscore the challenges facing the healthcare industry and the need for innovative solutions to address them.

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