Bidding war for VHI possible but clarity on legal issues essential

AXA, Alliance, Aviva or even BUPA could be interested in buying VHI in what could easily turn into a bidding war for the national insurer, put up for sale two days ago by the Irish state.

However, any potential buyer will want greater clarity on legal issues such as risk equalisation and any future government levies. These concerns aside, VHI is a tempting opportunity. At its peak, it had 1.75 million members (now down to 1.5m), about 60% of the total Irish market and an enviable databank of information, albeit with a seriously ageing membership profile (70% of all over-60s, 90% of all over-80s).

At present, all the main players are staying remarkably quiet. Independent insurance industry consultant and MD of healthinsurancesavings.ie Dermot Goode believes the Government has its work cut out to fatten VHI up for sale.