Insurers lose millions in motor cover market
INSURANCE companies lost millions of euro on motor cover last year.
And new figures show that the income they get from investments is shrinking.
The biggest loss was recorded by Dublin-quoted FBD, which had a deficit just shy of €102m for 2015, the Central Bank figures show. Some €93m of this related to motor insurance.
There were losses of more than €40m for Allianz and for Axa, with bailed-out British insurer RSA losing €30m.
Insurance companies in this market lost a total of €221.6m in 2015 on motor insurance alone.
The total income earned by the insurers during the year amounted to €951m.
Motor premiums have shot up by 70pc in the past year, as insurers insist that high claims costs are hitting them hard. Insurers made an underwriting loss of €273.4m on their motor insurance business. This is known as the underwriting loss. That figures exclude operational costs and other expenses.
Claims pay-outs on motor policies cost insurers €903.2m last year, according to the Central Bank figures.
In the past insurers were able to off-set underwriting losses with gains from investing the premiums they get off customers.
But low interest rates and poor returns from bonds have means income from investing premiums has collapsed.