The cost of Aviva health insurance premiums are to rise by an average of just over 5 per cent from the beginning of next year in a move that will add as much as €175 onto the annual cost of some family policies.
A range of the insurer’s corporate plans will be most affected by the price hikes, although 20 different policies will not be hit with any increases.
The company will offer €100 off children’s health insurance on the Aviva Select Plus plan, and it is attempting to simplify its product lines by stripping out almost 50 plans over the next 12 months.
Aviva has about 300,000 customers in the Republic.
Extremely complicated
There are now more than 400 health insurance plans available in the marketplace, which has made buying or renewing health insurance extremely complicated.
"We have tried to keep this increase as low as possible, it is necessary to allow us to meet the increase in our claims," the company's chief executive James Parker said.
“While we have worked hard to manage our claims costs, the fact remains that the amount we pay for a claim has increased by 5 per cent on average.
“We continue to offer good value health insurance products and reliable cover to our customers at a sustainable price.”
Addressing the plan to to tackle the industry-wide issue of product complexity, Mr Parker said 47 plans would be phased out on a renewal basis throughout 2016.
In 2014, Aviva Health had gross written premiums of €330 million, but profits declined by 34 per cent to €12 million. In the first half of this year, its profits reduced to €2.6 million from €5.1 million a year earlier.
Aviva is the third biggest health insurer in Ireland, having entered the market in 2008 with the purchase of a 70 per cent stake in Vivas Group, with AIB retaining ownership of the balance.
‘Mixed bag’
"This is very much a mixed bag from Aviva," said Dermot Wells of Cornmarket Group Financial Services. "It is a welcome change that new plans are not being launched to further complicate an already difficult market for consumers."
He said while the price increases would impact on families in particular, there are many options available and “it is certainly possible to manage the effect of the rate increase”.
The increase comes on the back of a price hike from GloHealth and is likely to be followed by price increases from the two leading players in the market - the VHI and Laya - within weeks as all the companies continue to battle with higher claims costs and the loss of premiums as people trade down to cheaper policies.
