Insurance costs 'not a reason' for rising prices

Consumers should no longer accept the rising cost of insurance for businesses as a reason for increasing prices, according to a group representing insurance brokers.

The Professional Insurance Brokers Association (Piba) said that the cost of insurance across a wide range of insurance products has been in freefall for the last two years.

Despite some public comments that insurance premiums are exacerbating inflationary pressures, the group said in a submission to an Oireachtas committee that the cost of private and commercial motor insurance, commercial liability insurance and commercial property policies have been falling rapidly.

Piba said that premium cuts of 40 per cent or more on commercial property insurance have not been unusual this year. Its remarks are contained in a submission to the Joint Oireachtas Committee on Enterprise and Small Business, which has been monitoring the insurance sector.

"Competition among providers in the marketplace is primarily responsible for this trend," said Piba chief executive Diarmuid Kelly.

"However, in general insurance there is an overall trend towards pursuing pricing and distribution strategies that seek to tie in consumers rather than give choice through brokers. This will have the effect of reducing competition between the general insurers in the Irish market to the overall detriment of the consumer."

Piba said the Financial Regulator should intervene in the market to ensure that all products are openly available through intermediaries. Predatory pricing policies designed to favour direct channels of distribution should be outlawed, it said.