STATE-OWNED health insurer, VHI, has chosen Zurich (formerly Eagle Star) as its preferred partner to provide life and pensions products, which it intends selling once it has secured regulatory approval to expand into this segment of the market.
The insurance company said in June that it was considering entering the life and pensions market once it comes under the supervision of the Irish Financial Services Regulatory Authority.
VHI has been seeking a partner to provide life and pensions products while awaiting regulatory approval.
The insurer has been assessing companies in recent months but has picked Zurich, which has been rebranded from Eagle Star, as its partner to expand into the life and pensions market, though no formal confirmation has yet been made.
A spokeswoman for the VHI said the process of choosing a partner was "still in progress" and "nothing had been concluded". She added that the insurer was still awaiting a licence from the regulator before it could sell life and pensions products.
Brendan Johnston, pensions director at Zurich, declined to comment when contacted last night.
Zurich (formerly Eagle Star Life) is the third largest life and pensions company in the country.
The company recently reported new business sales of €92.4 million for the first half of the year, a 12 per cent decline on last year.
However, the company has outperformed the Irish life insurance market during the first half of the year when sales plunged 30 per cent on the same period last year.
Speaking at VHI's annual results last June, chief executive Jimmy Tolan said the insurer would consider launching "people-related" insurance products aimed at its old customer base in particular such as products funding long-term elderly care.
"The State is trying to solve the long-term care issue. We believe we can design products around that as well," he said.
The success of VHI's travel insurance products has prompted the company to consider selling other types of insurance products.
The insurer has applied for a licence, which, it has said, will give it "greater commercial freedom" to launch products in different sectors and start selling insurance policies in other countries
The company has indicated that it wants to move into eastern Europe by making an investment of up to €120 million, which it hopes will be matched by a strategic partner in the venture.
The company's application for a licence suffered a setback in July when the Supreme Court rejected the Government's risk equalisation scheme under which the VHI would have received €41 million payments for 2006 and 2007.
The regulator demands that non-life insurers have a 40 per cent solvency ratio, which determines how much an insurer must hold in reserve.
The VHI has a ratio of 35 per cent, which would have risen to 38.7 per cent with the risk equalisation payments.
While the company has said its ratio should be closer to 30 per cent, it would be able make up the required difference through reinsurance, which involves selling on some of its risk to other insurers.
