Shane Ross says EU inquiry needed into cost of Irish motor insurance premiums

An inquiry should be held into the cost of motor insurance premiums in Ireland, Minister for Transport Shane Ross has said.

“It is my instinct that this should be looked at more carefully and in greater detail. To see how the premiums are calculated.”

Mr Ross said while motor insurance was not an issue for which his department was responsible, “as a citizen, I find some of the premiums incredibly high and incredibly similar and very difficult to justify”.

To examine how motor insurance providers operating in Ireland decide on premiums “you would have to set up some form of inquiry into the insurance industry . . . I would be worried about the insurance industry and the kind of similarity between some of the things that they do, which I would be concerned about. I think there would be a case for a further examination of that.”

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“It is not my portfolio but I think it would be no harm if the premiums were looked at more closely.”

Complaints

He said the volume of complaints from constituents about the rising cost of insurance premiums was huge. “The number of people who have bona fide reasons for needing to drive and who feel they are unable to afford it because of the insurance premiums [cost] is a problem.”

While he has not brought this suggestion to Cabinet, Mr Ross said he would prefer a European Commission investigation into suspected anti-competitive practices among motor insurance providers in Ireland be completed before any inquiry began.

In July 2017 officers from the European Competition Directorate – accompanied by staff from the Irish Competition and Consumer Protection Commission (CCPC) – carried out a series of unannounced inspections at the offices of motor insurance providers in Ireland.

In a statement at the time, the commission said it had concerns “the companies involved may have engaged in anti-competitive practices in breach of EU antitrust rules that prohibit cartels and restrictive business practices and/or abuse of a dominant market position”.

The commission did not identify the companies targeted nor did it say how many were subject to its investigation.

There is also an ongoing, separate investigation by the CCPC into suspected breaches of competition law, which began in 2016.

Working group

Mr Ross said a working group report into the motor insurance sector had shown a number of reasons why premiums were so high and found the level of competition was not particularly convincing.

This report – published in 2017 – found that while premiums peaked in 2016 and in some cases have fallen since, they had risen by approximately 70 per cent between 2013 and 2016 during a time when claims costs were rising by about 14 per cent.

Insurers have said that part of the reason for the high cost of premiums is the extent of uninsured drivers and also the level of awards made in court following collisions.

Mr Ross said he has met the insurance companies with other Ministers and talked about the issue at length. “But I still feel the premiums are prohibitive.”

The Minister for Transport has a narrow area of responsibility when it comes to motor insurance and is required to properly implement EU directives on motor insurance.