VHI Healthcare has reported a surplus of over €54m for last year, but said its private health insurance division recorded a loss of €7.2m.

The insurer blames the loss on its ageing customer profile and the lack of an effective risk equalisation scheme.

The overall surplus was achieved after a once-off credit of €38m after ending certain retirement benefits for staff.

Claims increased last year by 13%, due to a big increase in the number of medical procedures being provided to customers and the ageing profile of its customers.

VHI said that for it to become a commercially viable regulated insurer, with the correct solvency level, it will need to make a surplus each year of at least €60m.

It will also need a capital injection and an effective risk equalisation scheme.

Chief Executive John O'Dwyer said the company was committed to introducing radical cost-cutting measures to rebalance the cost structure in the health system and had saved €100m last year.

Speaking on RTÉ's News At One, Mr O'Dwyer said the company is in negotiations with the Department of Health over flagged charges to insurers for the use of public beds.

"We would be hopeful of a positive outcome but it is a very, very worrying situation for VHI and other insurers. We see it as a double taxation."

He said the firm had been impressive on reducing costs for major surgeries.

"Consultant rates are back to 2004 levels. Procedure pricing for hip replacements is down from 14 days to seven days. Knee replacements have been halved. Stents had a charge of €1,000; it's now down to €200."

Mr O'Dwyer also said it was too early to talk about price increases.

VHI had 1.16m customers in 2012, which was a fall from 1.22m in 2011.