VHI healthcare is to increase its premiums by an average of 3% from March 1, it has announced.

The private health insurer said that its most popular family plans from its One Plan range will see a price increase of 2%, however a small number of plans are also set to jump by 6%.

Commenting on the news, VHI chief executive, John O'Dwyer, insisted that the company ‘is aware of the enormous financial pressure facing customers' and has tried to keep the increase ‘as low as possible'.

"We are managing to do this by focusing on the execution of a cost management programme which has resulted in a 3% overall reduction in the cost of claims in 2013. This has been achieved through a combination of measures including the implementation of targeted claims efficiency programmes, reductions in fees paid to providers, increased activity of our special claims investigation unit and the continued transition of procedures to lower cost, medically appropriate settings," he explained.

However, he pointed out that since January 1, 2014, all private patients are now being charged for occupying beds in public hospitals.

"We do need to factor in the additional costs arising from this, the full impact of which is as yet uncertain," he added.