Unprecedented levels of claims volumes and continued cost pressures contribute to a financial deficit in 2023
PMI membership grew for the ninth consecutive year in 2023
April 5th, 2024: Vhi Group today announced its annual results for the financial year 2023. The Company recorded €1.68bn premium for its private health insurance business, reflective of strong growth in membership which increased by over 37,000. This is the ninth consecutive year of growth in private medical insurance (PMI) membership.
Vhi recorded €29.9m in income on Vhi’s other insurance products (2022: €27.5m), including travel, dental, life and international health insurance. In total, Vhi supported close to 1.7 million insurance members, comprising of over 1.2 million for private medical insurance and just under 480,000 for other insurance services.
In 2023, Ireland experienced a faster than anticipated recovery in demand for healthcare following years of restrictions in access and capacity associated with the pandemic. There was an unprecedented increase in the volume and cost of claims, and Vhi paid out over €1.68bn to meet the healthcare needs of its members, up 18% on 2022. The increase in demand together with high levels of medical inflation and higher labour and energy costs was not matched by a corresponding increase in premium income, resulting in a Net Deficit of €43.4m (2022: Net Surplus €34.3m).
Vhi is committed to delivering the very best in healthcare for members. It was necessary however to increase premiums in order to continue to meet the healthcare needs of members, as claims volumes and the cost of delivering healthcare increase. This premium increase followed net price reductions from 2020 to 2022 as well as return of value to members exceeding €450 million during the pandemic. Vhi is strongly capitalised with group capital reserves of €903m (2022: €949m) and a solvency capital ratio of 175% for its insurance business.
Key Financial results for Y/E 31st December 2023
- Gross Written Premium on core Vhi health insurance business came to €1.684 bn compared to €1.606 bn in 2022
- Private Health Insurance membership grew in 2023 to 1,214,700 up from 1,177,600 in 2022
- Total Claims paid in 2023 was €1.68bn up 18% from €1.42bn in 2022
- The increase in volume and costs of claims paid was not matched by a corresponding increase in premium income and resulted in a Net Deficit of €43.4m (2022: Net Surplus of €34.3m)
- Vhi is strongly capitalised, with group capital reserves of €902.7m (€949.3m 2022)
- The solvency position of the insurance business stands at 175% at year end
- Income on other insurance products amounted to €29.9m (2022: €27.5m) with 479,565 members
- MultiTrip, Vhi’s annual travel insurance membership now stands at 354,698 members up 8.4% on the previous year.
The accelerated return to healthcare was reflected in Vhi’s own healthcare provision services which recorded a 21% increase in the volume of member healthcare interactions to over 630,000. This included urgent and planned care delivered through Vhi 360 Health Centres, Hospital@Home and digital healthcare offerings. In November, Vhi launched an Electronic Health Record System enabling Vhi clinicians to have up to date and accurate member health information at their fingertips, supporting provision of the best possible care for members. These investments are central to the delivery of coordinated, connected, and integrated care for Vhi members now and in the future.
Commenting on the Group results for the financial year 2023 Mr. Brian Walsh, Group CEO, Vhi said “I am pleased that in 2023 Vhi supported close to 1.7 million members, meeting their needs across private medical insurance, travel, dental, international health, and life insurance.
He continued “In 2023 our members accessed significantly more healthcare than in any other year in our history and claims accelerated at a rate not experienced before. This brought challenges as Vhi experienced a financial deficit in 2023. However Vhi welcomes the fact that our health insurance members could access timely and quality healthcare. The unprecedented rise in claims volumes combined with high levels of cost inflation is being addressed through continued focus on efficiency and value for money, aligning pricing with demand for and cost of healthcare, and continuous investment in superior healthcare and technology capability.
“Managing costs while delivering appropriate care is a challenge across global health systems. Irish healthcare is changing, with an ageing population and increasing incidence of chronic disease putting significant pressure on healthcare access and costs. If these challenges are to be addressed, it will require a change in how healthcare is delivered in Ireland. Vhi is evolving, moving beyond insurance cover to include healthcare provision. Wherever possible we want to prevent disease, improve outcomes and quality of life for our members. Vhi has invested in our own healthcare provision services to complement the care of our healthcare partners to deliver connected care for our members.
He concluded “Vhi exists solely to meet the healthcare needs of our members and all premium income received is dedicated to delivering, meeting, and investing in their healthcare needs now and in the future. We continue to grow and transform, innovating and continuously improving the care and service experience for our members. This is underpinned by our financial strength, and we are committed to delivering the very best healthcare and service for our members.”
ENDS