Market exit hits Bupa profits

HEALTH insurer Bupa said its profits have been dented by its exit from the Irish market.

The company yesterday said pre-tax profit for the six months to June 30 fell by 1% to £165 million (€205m) on revenue from continuing operations that increased 28% to £2.67 billion (€3.3bn).

The company said that, in line with its guidance for 2008 given in March, underlying surplus decreased by 9.2%, mainly reflecting its exit from Ireland in 2007 and initial dilution from recent acquisitions.

It said its core insurance business continues to grow as it expands its presence in other markets outside Britain.

The company, which was based in Fermoy, Co Cork, had to exit the Irish insurance market after a court upheld the need for “community rating” in private health insurance.

This requires insurers to charge the same premiums for all customers, regardless of their health profiles.

Bupa chief executive, Ray King, said: “We are making good progress in integrating our recent major acquisitions. These new businesses will enhance our capabilities and scale in key markets, providing a valuable source of future growth.

“While we cannot expect the group to be immune to the growing economic weakness in major economies, we expect Bupa to demonstrate resilience due to its breadth of activities in terms of geography and sector and focus on health.

“Our strong cash generation will enable us to invest in growth opportunities in our existing businesses and in new areas such as our recently announced health insurance joint venture in India.”