Harney calls on Bupa to surrender files to Axa

HEALTH Minister Mary Harney called on departing private health insurer Bupa to hand over its customer files to allow Axa take over its business within weeks.

Ms Harney had what were described as “very productive” talks with Axa yesterday after the international insurance company declared its willingness to enter the health insurance market as a replacement for Bupa.

However, British-based Bupa last night rejected the minister’s entreaties, saying the company would not enter discussions with Axa as it wanted to hold on to the option of resuming business in Ireland if barriers to competition were lifted.

Bupa announced its pull-out plans last December after losing a court case against the controversial risk equalisation scheme which requires newcomers to the market to make an annual cash payment to the former state monopoly VHI as compensation for VHI’s older, and more expensive, customer base.

Bupa says risk equalisation, which comes into effect after a company has been operating here for three years and is due to kick in on January 19, is anti-competitive and would wipe out the company’s profits in Ireland. It has an appeal against the court ruling scheduled for next Tuesday, but it has already put its 270 staff on protective notice and notified its 400,000 customers it will not renew policies that run out from the end of this month. A spokesman insisted, however, the company still wanted to do business here. “Bupa Ireland’s preferred option is to remain in the market and to reach an accommodation with the minister that would allow it to do so.”

Axa is already well known in Ireland as a motor insurer, but it offers health insurance in other countries and is the second biggest player in the British market, after Bupa.

Ms Harney welcomed Axa’s proposal to step into Bupa’s place and said yesterday she wanted to see Bupa engage with the company. “She is concerned that Bupa’s staff and customers are facilitated with some kind of orderly transfer and there is an opportunity here for both staff and customers to be given that with Axa,” her spokesman said. “Axa’s proposal is very serious. They see the potential to operate here successfully and profitably and the minister welcomes that as very encouraging.”

Bupa is believed to be furious, however, that Axa have offered to step in just as the minister announced the establishment of a ‘business review group’ to examine the claims that risk equalisation makes the market unviable for newcomers.

It is also unclear whether one of the attractions for Axa might be the possibility of being exempt from paying the risk equalisation subsidy for the first three years of operation here, if they are declared to be a new business despite targeting an existing client base.

Axa said the meeting with Ms Harney went very well but would not disclose details of the talks.