Vhi surplus drops to €34.3m as the cost of covering claims increases by 10%

The company said the amount paid out in claims rose by 10% to €1.425bn compared to €1.295bn in 2021. 

Vhi’s surplus for last year were cut nearly in half as demand for healthcare services returned to pre-pandemic levels and the cost of covering claims increased, the company’s annual results show.

During the year, Vhi’s private health insurance business added 23,400 customers bringing their total to 1,177,600 which drove the increase in its gross income from premiums to €1.6bn from €1.59bn in 2021.

After tax, the company’s surplus in 2022 came to €34.3m — a 47% 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 part 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.

The company said it delivered a strong financial performance despite the impact of the pandemic as well as the cost-of-living crisis and the fall-out from the war in Ukraine.

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.

“Costs and affordability are a constant priority for Vhi,” he said. “We believe 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.