The VHI has announced that it is cutting the cost of premiums on a number of its health insurance plans and that it was freezing the cost of all others.
Dermot Goode of totalhealthcover.ie said the move - announced yesterday - was completely unexpected. "The market had been expecting an increase, as usually happens at this time of the year. It's good news for members and good news for those considering taking out health insurance in advance of the lifetime community rating which comes in on May 1," Mr Goode said.
Lifetime community rating will see people loaded with a premium if they enter the health insurance market after the age of 35. Mr Goode said the VHI move sent out the right signals to the market when the biggest provider cuts rates and he expected the others to follow suit. "This sets out a marker to the other providers who might be forced to rethink their pricing strategy. We saw two companies increasing prices recently, albeit fairly modest increases."
VHI did not give an indication as to how long it would keep prices static, but Dermot Goode said he does not expect changes to premiums for at least six months. However, he said the market has to allow itself some wriggle room in the event of upward pressure on claims. The price cuts and freezes are seen as a direct response to the concessions announced by the Minister for Health who told insurance companies in recent months that he would not increase the levy or public hospital charges, but that he expected the companies to reciprocate.
Dermot Goode said the industry was beginning to see a surge in inquiries from people aged over 35 who are looking to get into the market before the introduction of the 2% loading in May. "We expect to see a lot of marketing activity in the run up to the end of April. Many people will wait until the last two weeks to get on board but undoubtedly there will be an uplift in membership numbers," he concluded.
MORNING BRIEFS - Apple's quarterly profit - reported last night - is the biggest ever recorded by a publicly listed company in a three month period according to measures kept by ratings agency Standard and Poor's. The tech company pulled in net earnings of $18 billion in its first fiscal quarter. It tops the near $16 billion made by ExxonMobil in the second quarter of 2012, according to Standard and Poor's. Apple said its revenue were up 30% to $74.6 billion. The increase is all down to iPhone sales. Record numbers were sold in the three month period - 74.5 million - well ahead of expectations. iPad sales however are disappointingly low.
*** But Sony is not doing so well on phone sales. The Japanese tech giant is to cut another 1,000 jobs at its smartphone division in the next fiscal year - mainly in Europe and China. That comes on top of the 1,000 jobs it is cutting this year. Sony shipped nearly 20% fewer phones than projected last year, losing the company an estimated $1.7 billion.
*** Internet search company Yahoo last night announced plans to spin off its 15% shareholding in Chinese e-commerce giant, Alibaba, thus avoiding a large tax bill. The $40 billion stake will be separated into an independent registered investment company called Spin-co. Yahoo reported fourth-quarter earnings of $166m, down over 50% from a year earlier. Shares were up more than 6% in after hours trading, however, as investors gave their thumbs up to the spin-off plans.
*** There are expectations that the chief executive of International Airlines Group, Willie Walsh, will meet Government representatives, possibly as soon as today to discuss issues around its proposed takeover of Aer Lingus. The sale of the Government's 25% shareholding in the airline is far from certain with a number of Labour TDs speaking publicly against the plans and a number of Fine Gael TDs are said to have difficulties with the proposals too. Any sale of the Government stake has to be approved by the Dáil.