Car insurers would be required to file independently audited accounts with the Central Bank to prove they are passing on reduced claims costs to customers under new rules proposed by Sinn Féin.
The party published a survey of almost 1,400 motorists on Wednesday highlighting the scale of motor insurance premium increases over the past year.
Some 95 per cent of respondents to the Sinn Féin survey indicated their car insurance premiums had increased, with almost half seeing hikes of between €100 and €200. Almost a quarter said their premiums had not increased while 17 per cent saw hikes of between €200 and €300, with 12 per cent grappling with increases of more than €300.
According to the Central Statistics Office, the cost of motor insurance rose 8.3 per cent in the year to the end of June, the 10th consecutive month premiums have risen.
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The increase over the past year has reversed the trend of falling premiums that initially followed the Government’s introduction of new guidelines governing personal injuries awards.
Sinn Féin finance spokesman Pearse Doherty told reporters that despite “pleading” for the new rules to be put in place, car insurers have failed to meet their end of the bargain by dropping premiums.
“That legislation is now in place since 2021,” Mr Doherty said. “It has cut awards by 25 per cent to 40 per cent. But what we’ve seen is premiums starting to increase again. At the same time, we see corporate profits reported by the insurance industry increasing by between 12 and 14 per cent despite the industry telling us they would pass on, euro for euro, the savings and that they were only looking for a 5 per cent profit margin.”
Mr Doherty said Sinn Féin wants the insurance industry to comply with rules already in place in Britain and Northern Ireland. The Judicial Council Amendment Bill, which Mr Doherty first introduced in 2021 and the Oireachtas finance committee has agreed to debate after the Dáil recess in September, would force insurers to publish audited accounts detailing the impact of the awards guidelines on insurance costs.
At least once a year, the Central Bank would then present a report to the minister for finance and the Oireachtas detailing the information gathered from the accounts about the amounts insurers paid out for claims over the period and the premiums received.
A spokeswoman for industry lobby group Insurance Ireland said the body rejects Mr Doherty’s comments. “Figures published by the Central Bank early this month are proof that insurers have followed through on their commitment to pass on the benefits of the recently reaffirmed personal injuries guidelines to consumers,” the spokeswoman said.
“In the first half of 2023, the average written premium on motor insurance rose by only 0.5 per cent to €561, against a backdrop of significant inflation in the rest of the economy, demonstrating the Government’s insurance reform agenda is working and insurers are delivering for consumers. Irish motor insurance customers benefited by significant decreases from 2017 to 2023.”
She said Irish consumers have been “cushioned” from the full impact of cost inflation across the insurance industry over the last couple of years in contrast to the rest of Europe and the UK.
“Most European countries also have higher premiums,” the spokeswoman said. “The decreases that occurred in Ireland were also against a backdrop of a major increase in motor damage claims[ ...], exceptionally high levels of uninsured driving in Ireland and an increase in motor collisions by unaccompanied learner drivers.”
Insurance Ireland said the entrance of new insurers to the market like South African firm Outsurance is a function of the “continuing success of the agenda for insurance reform”.
Figures published by the Central Bank last December pointed to a 25 per cent increase in the cost of motor insurance claims in 2022 amid a spike in damage costs as crash rates and inflation rose following the pandemic.
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