Bupa has pulled out of the Irish market in a move that could see 300 job losses following a High Court judgment that would have forced it to pay out an estimated 20m.
The judgment in November ruled that Bupa would have to make risk-equalisation payments to the state-owned insurer VHI over a three-year period which would be more than double Bupa Ireland’s estimated surpluses over the same period.
Bupa Ireland has around 300 staff and 475,000 customers. It is not known what will happen to the staff but the company says it will try to minimise the impact.
It will no longer accept new business and current members’ policies will not be renewed.
The Irish government imposed the risk-equalisation scheme in December last year. It means that insurers with a higher number of elderly customers who claim more are compensated by insurers with fewer elderly customers.
Bupa estimates the cost of withdrawing from the Irish market, including legal fees, will be 13m.
Bupa Ireland chief executive Val Gooding says: “In all our discussions with the government, we have emphasised consistently that the level of payments being proposed would make our Irish business unviable. We have been left with no choice but to close.”