This week we spoke to Irish sources about US insurance giant AIG’s takeover of Irish health insurer Laya. Laya is Ireland’s second biggest PMI group and a strategic buy for AIG, which will use Laya’s customer base to cross sell other insurance products.

The similarity with the Developing World is that the Irish system is supplementary to NHS funding, covering mainly primary care. This is the model which many policymakers think will roll out in many developing countries. 

AIG has been clever with the Laya acquisition – building upon the second largest brand rather than starting out from scratch. This could be the way to go in the Developing World where brand is of huge importance and markets are chaotic.

As Ireland has limited universal coverage, PMI rates are high  – about 50% of the population (over 2m people) have private cover, give or take. But the market is complex and confusing – a hospital operator in Ireland told us he couldn’t even make heads or tails of what his cover offered.

A new law in Ireland will penalise the over 34s taking out coverage for the first time as of March, 2015. This is expected to give the market a kick, with 60,000 new customers expected by May 2015.  The end of the recession should also help.

So what does Ireland tell us?  Firstly that insurers are going to value PMI as its holders are richer and they can cross-sell other products to them. Secondly, Ireland (and other European PMI market such as Spain and Portugal) have been fairly recession resistant. People do not willingly give up such policies in time of need. The more limited public healthcare, the more likely PMI is to grow.