Insurers must 'do the right thing' to help motorists and businesses amid pandemic, says Minister
Motor insurance customers could be next in line for refunds on their policies after Finance Minister Paschal Donohoe appealed to insurers to be "proactive and generous" in their treatment of policyholders.
He made the remarks on a conference call with Insurance Ireland in which he urged the sector to improve its treatment of customers in the interest of "fairness and the industry's own reputation".
Mr Donohoe told insurers there is "a strong case" that customers should see refunds due to what is expected to be a significant reduction in the number of claims.
It comes just days after it was confirmed that health insurance policyholders are in line for refunds and rebates following the
Government’s effective takeover of 19 private hospitals.
Now, the Minister is putting pressure on the motor insurance industry to follow suit.
Among the key points raised on the call by Mr Donohoe was that insurers "must be proactive and generous in relation to their treatment of motor insurance policyholders".
Mr Donohoe said: "In relation to the treatment of motor insurance policyholders, I pointed out that a combination of the very profitable part of this market over the last 12 months, when combined with what is likely to be a significant reduction in claims for this period, provides a strong case for some type of refund of consumers' motor premium package."
This would provide "some financial relief" to under-pressure customers, he added. Mr Donohoe also raised concerns that some insurers have adopted a "blanket rejection of all business interruption claims".
Many businesses have raised concerns about their insurance providers refusing to pay out for claims relating to the business interruptions caused by the Covid-19 shutdown.
The Department said the failure to pay out in some cases has reinforced the Minister's view "that some insurers were doing the industry significant damage and were not treating customers fairly".
Mr Donohoe also castigated some Insurance Ireland members who have agreed to implement commitments regarding forbearance and business premises but have yet to do so, though he also commended the sector for the steps it has taken in responding to the challenges of Covid-19.
The main message that I wanted to convey to the insurance industry, through Insurance Ireland, is the need for the industry to help itself and do the right thing by customers during this time.
"I made it clear that failure to do so will be very damaging for the longer term reputation of the sector," Mr Donohoe said.
"I indicated that the cost and supply of insurance remains a priority of mine and expect it will also be one for any new Government. It is essential that the industry fully engages with the reform agenda and does so in the interest of fairness for its customers and their own reputational credibility going forward."
