Laya Healthcare to increase cost of insurance policies by 3% on average

Laya healthcare, the second largest health insurer in the State, has announced plans to increase the cost of its policies by an average of 3 per cent from the beginning of October.

The price hike – which the company said would add an average of €42 to the annual cost of policies – comes just weeks after it said it had no plans to increase prices this year.

The price increase was blamed on the soaring volume and cost of claims as well as higher energy and staffing costs.

While the average price increase was put at 3 per cent, the cost of some policies will climb by 5 per cent with the financial impact on affected customers substantially more than the €42 highlighted by the company.

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Laya said the number of claims being made had climbed by 24 per cent over the past year with the cost climbing by 18 per cent.

The price increase comes just days after it was announced that French insurance giant Axa has agreed to buy the health insurance company from a unit of US rival AIG, in a deal worth €650 million.

Laya has about a 28 per cent share of the Irish health insurance market, serving 690,000 members and generating about €800 million in premiums annually.

The company is a tied agent that sells health and life products underwritten by units of Swiss Re.

“We are sensitive to the financial pressures our members are facing, and we’ve tried to minimise the impact of a premium increase on them,” said Laya’s managing director Dónal Clancy.

“However, we need to ensure that we’re serving the current and future healthcare needs of our members, striking a balance of keeping premiums affordable while meeting the growing needs of our 690,000 members and giving them rapid access to more hospitals, consultants and urgent care services when they need it.”

He said that claim costs were a significant factor of health insurance premiums with Laya “seeing a sustained increase in the cost and frequency of medical claims, notably in the private and high-tech hospitals”.

He said that in the year to date there had been a 24 per cent increase in the volume of claims, while the overall cost of claims has increased by 18 per cent – the highest rate of claims increases that we’ve seen in over a decade.”