Government urged to ‘get serious’ with insurers as commercial premiums rise 16%

15 November 2022

The Government has been urged to “get serious” with insurers amid news that commercial premiums have increased by 16% since the introduction of new judicial guidelines aimed at reducing insurance payouts.

Peter Boland, director of the Alliance for Insurance Reform, welcomed the progress seen to date as evidenced by the Department of Enterprise’s third insurance reform implementation report. It shows that 90% of actions in the State’s insurance reform plan have now been enacted.

He also welcomed Tánaiste Leo Varadkar saying the process of reform should continue “until premiums begin to fall across the board”.

“While all that is positive,” he said, “on the other hand all the work that’s being done has not yet yielded any reduction in liability insurance costs.

In fact, since the main reform of the judicial guidelines, renewals have increased by an average of 16% in terms of liability insurance premiums.”

Mr Boland said “essentially we’re seeing insurers pocketing the benefits of all the reforms to date and it’s time for the Government to get serious with them”.

“They say they can’t change premiums, but they have enormous soft power.

“Insurers need the Government more than the Government needs insurers. We need to see that influence being used to convince insurers that they need to pass on the benefits of the reforms.”

Insurance Ireland meanwhile said the report shows that “much has been achieved… but it is important that momentum is not lost”.

“It is essential that the outstanding measures are prioritised and completed for the benefit of consumers and the economy,” a spokesperson said, in reference to the outstanding reform of both occupiers’ liability legislation and the functions of the Personal Injuries Assessment Board, which arbitrates on personal injury claims.

Sinn Féin’s Pearse Doherty said the report makes clear “that insurance companies are not passing the benefit of these reforms through to their customers, undermining the credibility of the reforms”.

Separately, the Central Bank’s latest report on the private motor insurance market shows average motor premiums decreased by 2% to €607 across 2021, with asking prices for policies at the end of last year 17% down on their peak in 2017.

Mr Boland said the report nevertheless represents “more of the same”.

“What we’re seeing is that insurers are making massive profits from the motor insurance market, lawyers are making enormous sums in legal fees, and brokers are making commissions,” he said. 

“Some of this is being passed onto motorists via lower premiums, but we would have expected reductions substantially greater in magnitude than we’ve seen.”

Insurance Ireland, however, argued that premiums have actually fallen by 27% since 2017, once CSO data for motor insurance premiums covering the first nine months of 2022 are taken into account.

Moyagh Murdock, the chief executive of the body, said the falling premiums noted in the report “provide clear evidence that the reforms are starting to work, and consumers are benefitting while they are seeing rising costs in many other areas of the economy”.

She added however that it is “concerning” that only 15% of claimants are using the PIAB, as opposed to taking a legal action, despite the introduction of the personal injury guidelines last year.

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