Insurers ‘taking Government for a ride as they pocket rising premiums’

ireland
Insurers ‘Taking Government For A Ride As They Pocket Rising Premiums’
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By Michelle Devane, PA

The Government is being taken “for a ride” by insurers who are pocketing rising premiums, an industry expert has said.

Director of the Alliance for Insurance Reform Peter Boland said some progress was being made to reduce premiums, but that overall premiums are increasing.

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The organisation represents civic and business organisations seeking lower insurance costs and reform.

The Government has released its third implementation report of the Action Plan for Insurance Reform.

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The plan published in December 2020 set out 66 actions to make Ireland’s insurance sector more competitive and consumer-friendly.

Monday’s report shows that about 90 per cent of actions in the plan have been completed or are ongoing, with the remaining initiated.

“Whilst the reforms that they’ve put in place are having an important impact on the motor insurance side, they are absolutely not having an impact on the liability side,” Mr Boland told RTÉ Radio 1.

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“For all of the hard work that the Government has done, all of the gains that have been made are being pocketed by insurers and in fact what we are seeing among our members is premiums increasing.”

Mr Boland said the rising cost of liability insurance is putting smaller firms out of business.

“This is the kind of insurance that is essential for SMEs, for community and voluntary groups, sports and cultural organisations and charities. They cannot really operate without it,” he said.

“This has been a major issue now for over six years, it is putting small businesses out of business and it is stopping charities and voluntary groups from doing what they were set up to do,” he said.

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“What we’ve seen since the biggest reform so far, which is the implementation of the judicial guidelines in April of last year, is those sorts of premiums increasing by an average of 16% on renewal.”

Mr Boland added that for all the hard work done by the Government, the judiciary and policy holders, it is “not yielding results on liability”.

“Our view is that insurers are taking Government for a ride on this because they have said all along that it is the cost of claims that drives the cost of premiums and now that’s addressed and is materially delivering results, they are saying that it’s down to duty of care, or fraud or reform of PIAB.

“All these are very important and everybody agrees that they need to be done but what we want to know is where are the benefits of all of the reforms that have been pushed through already.”

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Junior minister Sean Fleming, who has responsibility for insurance, said the cost of insurance is decreasing, with motor insurance down by 10 per cent “right across the board in the last 12 months”.

He also told RTÉ’s Claire Byrne programme that there were also reductions in home insurance policy premiums, assisted by the abolition of the loyalty penalty.

It was abolished on July 1st.

Mr Fleming said the Government wants to see reductions in business-related insurance, such as employers liability and public liability insurance and also wants more competition in the market.

“The non-availability of insurance was a very big stumbling block when we entered government as a result of Brexit.

“We have most of that, but not absolutely all of it, fully dealt with at this stage,” he added.

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