Irish consumers are facing a hike of up to 10 per cent in their car insurance premiums over the coming year, as reduced margins mean insurance companies are looking to increase rates.
According to Deloitte's annual Motor Insurance Survey, nearly 90 per cent of Irish motor insurance companies said that they expect to increase premiums in 2009.
Forty-one per cent expect an increase of up to 5 per cent, while 42 per cent expect increases of between 5 and 10 per cent.
However, the good news for consumers is that motor insurance companies may not be able to implement the desired premium increases, due to increased competition in the market.
Last year, 13 per cent of companies expected to increase prices in 2008 by over 10 per cent, but in reality, Deloitte says that no such price increases were implemented.
"Motor insurance companies are facing a push/pull situation – on one hand, as competition in the market remains intense companies are coming under pressure to reduce costs.
On the other, reduced margins in current premiums are creating pressure to increase premium rates. What's clear is that motor insurance companies will need to be extremely careful when deciding upon their pricing strategy as a loss of market share is the very probable result of getting it wrong," said Dick Tulloch, director of actuarial services at Deloitte.
