Warren Buffett’s reinsurance firm Berkshire Hathaway has renewed and extended a health reinsurance agreement with Ireland’s state health insurer VHI for four years.
VHI chief executive John O’Dwyer said: “We are delighted to build on the initial agreement we had in place with Berkshire Hathaway and value their support. We feel this is a vote of confidence from a highly respected company and look forward to continuing our partnership over the next 4 years.”
The health insurer is the process of making an application to the Central Bank of Ireland for authorisation and said that the reinsurance arrangement and demonstrating that the business was sustainable in the long term was critical in making its submission.
VHI also reported its 2013 results which recorded a financial surplus of €65 million. It said its surplus for 2013 represented a margin of 4.4 per cent and was an improvement on the surplus of €54.3 million, or 3.8 per cent margin, achieved in the previous year.
At the end of 2013, the insurer had free cash reserves of more than €389 million, bringing the company’s solvency level to 156 per cent, compared with 108 per cent in 2012 and 100 per cent in 2011.
O’Dwyer said: “Aside from the immediate goal of securing authorisation by the Central Bank of Ireland, VHI Healthcare is committed to continuing to identify ways to bring efficiencies to the market and tackle the affordability issue facing the health insurance sector.
“We remain focused on keeping prices as low as is feasible and on delivering back savings through offers and promotions where possible. We will continue to prioritise this area with a view to bringing costs down for the customer while retaining quality of care, developing best practices, encouraging best possible outcomes and at the same time ensuring that over utilisation is eliminated.”
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Warren Buffett, Berkshire Hathaway, VHI, John O’Dwyer, Europe