Insurance sector calls for further tax relief on health insurance

It comes after health insurance providers hiked premiums a number of times in recent years

Moyagh Murdock, chief executive of Insurance Ireland. 

Insurance Ireland, the representative body for insurance providers in Ireland, has called on the Government to increase the tax relief at source for health insurance after providers implemented a number of premium hikes over the last few years.

Irish Life Health has increased premiums twice so far this year, once on January 1 and another on April 1. The April increase saw premiums go up on average 5.9%. In January, VHI announced another price increase of 3% — its third price increase in the space of a year.

In February, Laya Healthcare increased its prices by 4.7% following two previous hikes in 2025.

The providers cited the rising cost to cover claims as the reason behind the price increases.

In 2025, VHI recorded an annual after-tax surplus of €71.2m — almost double the €36.3m recorded in 2024. Irish Life Health made a profit of €31.1m during its 2025 financial year — an 84% year-on-year increase.

Laya Healthcare has yet to post its 2025 results.

In its pre-budget submission to the Government, Insurance Ireland said tax relief at source was important for the “affordability and sustainability of the market, however, its effectiveness has diminished over time”.

Insurance Ireland is recommending a phased increase in the cap from €1,000 to €1,500 per adult in Budget 2027, which it said “will support affordability, ensure continued market participation and support policyholders manage the impact of rising premiums”.

The organisation is also calling for the insurance sector to be involved in the upcoming personal investment accounts as proposed by finance minister Simon Harris.

It said the sector was “uniquely positioned” to support the delivery of these accounts and “strongly recommends that Government ensures an adequate framework to encourage consumer participation and guarantees a level playing field where all market participants, including insurers, can be involved”.

It also requested that the Government make a number of tax changes including equalising the tax treatment for financial products such as life assurance exit tax, capital gains tax, and deposit interest retention tax, as well as repealing the 1% life assurance levy and the eight-year deemed disposal rule.

It said by doing this, the Government could “achieve its stated aim of stimulating long-term savings and investments while also encouraging consumer participation in retail markets”.