It’s been a tough time for health insurance buyers in Ireland: a post pandemic perfect storm of high inflation and record claims resulted in double-digit premium increases in the past few years. There are a few indications that 2025 could become the year where prices follow a more normal cycle with average increases of 5-8% per year. Individual plan cost could however increase more significantly.
Irish Life has implemented an average price increase of 3.7% effective from the 1 January and we expect VHI and Laya to follow suit with similar price rises in the first half of 2025. While price increases are never good news, the Irish Life Health move indicates that the level of premium increases is starting to stabilise. Three trends give cause for optimism:
Rising competition – Level Health, a new insurer backed by Aviva has launched in November 2024. The offering includes four plans available for retail clients that can be tailored to some extent. The pricing and the simplicity of the plans have been well received by the market. Level Health is expected to launch an offering for the corporate sector. This new competition is likely to put pressure on pricing for key segments of the market.
Slowing inflation – Following several years of high inflation, price increases are now moderating. Big ticket items for medical care providers like electricity and gas are down in cost (while still elevated above pre pandemic level) but there is a continued pressure on wages and other input costs. It is expected that inflation in 2025 will be well below 2022/2023 levels which should reduce the need for premium increases as seen over the last few years.
Peaking premiums – Premiums are now up c25%-40% cumulatively over the last two years. Although there is a time delay for price increases to reflect on insurers’ earnings these are starting to give insurers more confidence. In parallel, insurers are making efforts to control claims costs. In addition, the fact that there hasn’t been a drop in the number of people insured is benefitting insurers’ revenues.
For the first time in while we are hopeful that employers and consumers may finally see more manageable renewal costs over the next 12 months. If you have an upcoming renewal and want our help reviewing your options, please reach out to a member of our team.
