New health insurer to shake up the market
Yet GloHealth, which becomes the fourth player in a shrinking market, hopes to capitalise on a growing need among a large number of people who want private health cover but feel they can’t afford it.
In that sense, yesterday’s launch of the company threatens to provide a welcome shake-up of a market that has seen annual premium increases (regularly in double digits) become the norm in recent times.
In Mar 2012, the number of people with private insurance stood at 2.1m — the lowest since mid-2006 as many opt not to renew their policies as they fall due.
The economic downturn has had a significant impact on the health insurance market, with 66,000 people canceling their policies last year and a further 24,000 in the first three months of 2012.
The trend will do little to ease pressure on an overburdened public healthcare system in advance of the Government’s much heralded plans for the introduction of a universal healthcare system.
In a recent report, the Health Insurance Authority warned that 75,000 people are likely to quit private health insurance between June 2011 and the end of 2012.
Despite routine advice by bodies like the HIA that shopping around for health insurance cover can save some families up to €1,000 per annum, consumers are still reluctant to switch their policies to a rival. The HIA estimates 23% of adults have switched their health insurance cover — a clear signal of how insurance companies have benefited from consumer inertia.
The same HIA survey also revealed that policy holders would require annual savings of at least €441 on average before they would consider taking out health insurance with a different company to their existing one.
With the promise of better value for all existing policy holders combined with the ability to personalise the cover for individual needs, GloHealth is certainly providing a novel offering to the public.
With consumers regularly confused by the sheer number of policy options, GloHealth’s decision to offer three basis packages will provide welcome simplification.
Facing accusations yesterday that GloHealth is trying to cherrypick more profitable, younger customers, the company’s chief executive, Jim Dowdall, insisted that while its policies would be attractive to such a cohort, its offerings would provide “savings across the board regardless of age”.
Health insurance analyst Stuart Endell of getcover.ie predicted GloHealth’s offering would simplify the entire industry through its tailor-made policies.
“We hope that GloHealth will take in so far as is possible, the complexity out of a product which had been notoriously convoluted,” he said.
The arrival of GloHealth, headed by three former Aviva executives, would suggest consumers can be offered comparatively cheaper health insurance cover than currently exists while still turning a profit in a notoriously difficult and complex marketplace.
* Cost comparisons of all policies are available on the Health Insurance Authority website: www.hia.ie
