Car insurance protest in Dublin city centre in 2016
We knew this day would come.
Six motor insurance companies have signed legally binding agreements to reform their internal competition law compliance programmes, following an investigation by the Competition and Consumer Protection Commissio
The development brings to an end a five-year long investigation by the CCPC into suspected “price-signalling” by organisations operating in the insurance market – an anti-competitive practice where businesses make their competitors aware that they intend hiking prices.
The CCPC said the agreements in no way give the industry a “clean bill of health” and it has written to the Central Bank outlining its concerns about the broader culture of the industry and the “repeated interventions that have been needed to address issues in the sector.”
The six firms that have signed up to the legal commitments are AIG Europe SA, Allianz PLC, AXA Insurance DAC, Aviva Insurance Ireland DAC, FBD Insurance PLC and AA Ireland Limited.
Brokers Ireland, which was also the subject of the probe, has declined to sign up to the agreements.
It’s time to renew my insurance and believe it or not, Car Insurance in Ireland is still a joke. I got multiple quotes from everybody including An Post, 123.ie, Chill, AIG, Liberty and loads more! The difference between them all is crazy!
Members of the The Joint Committee on Finance, Public Expenditure and Reform From left: Senator Gerry Horkan,Senator Rose Conway-Walsh, Senator Kieran O’Donnell and John McGuinness T.D Chairperson of the on the Plinth, Leinster House in Dublin today.
The report [on the motor insurance industry[ concluded that on average premiums have increased by 37%, but in some cases premium hikes have been in the order of 200%-300%.
“It is apparent that insurance companies in many cases are refusing even to quote insurance. In other instances, insurance companies quote but the amounts sought are so large that the net effect is to prevent people from getting insurance,” the draft report states.
It says it is unacceptable that the insurance industry publicly states that certain variables are behind steep increases in motor insurance, yet fail to publicly furnish the supporting evidence. “The insurance industry cannot have it both ways,” it added.
At last we are getting some data regarding the performance of the motor insurance business in Ireland.
The mere fact that 21 companies are listed as providers is extraordinary when five companies account for 87 per cent of policy losses.
One company accounts for 37 per cent of the market losses, two others for 15 per cent, followed by two more at 10 per cent, with one major player in marginal profit.
One must, given the wide divergence in losses, ask the simple question as to why we are seeing huge and uniform percentage increases across the board, with the threat of more to come. We might be forgiven if we came to the conclusion that in reality we don’t actually have a competitive market.
That these companies would take their policy income and invest it in markets that are at their most volatile in decades is at the very least foolish.
The fact that this is common practice and a mechanism to underpin what clearly is an unstable, if not an unsustainable, business in its own right, suggests the need for urgent Government intervention before many hard-pressed motorists are forced off the road.
It is ironic that as I write this one of the larger providers has a television campaign extolling the virtues of its policies. Surely retrenchment should be the order of the day.