Credit union car insurance to force cut in premiums
Published 01/05/2014 | 02:30
MOVES by credit unions to offer motor insurance will shake up the market and force insurance companies to cut premiums, say experts.
Some 374 credit unions have begun selling car insurance online, with an offer of 12 months cover for the price of 11 months for the movement's 2.9 million members.
The new CoverU.ie policies are underwritten by AIG, with comprehensive cover set to be available from €273 a year, according to the Irish League of Credit Unions, which put the deal in place for members of unions affiliated to it.
Frank Conway, founder of the 'Irish Financial Review', said the new offer had the potential to force down premiums.
The entry of credit unions into the market comes as the latest figures from the Central Statistics Office show that premiums for car cover rose by 4.4pc in the year to March.
And the new player has set up two weeks after the crash of Setanta Insurance left thousands without motor cover.
Mr Conway said: "This is really good news for Irish consumers.
"In an era where personal finances remain severely constrained, retaining a competitive market place is important to ensure prices remain low and consumers can avail of the best deals in the market."
Head of the Irish League of Credit Unions, the largest representative body for the sector, Kieron Brennan, said the community lenders would offer competitive car insurance rates.
He said research carried out for the organisation showed a high volume of switching activity in the car insurance market.
Mr Brennan said consumers are always on the hunt for the best value in terms of their insurance cover.
Credit unions are attempting to broaden their offering to members. A number already offer electronic payments, allowing members to pay bills and have their wages or pension lodged into their credit union.
And by the start of next year the movement is expected to offer debit cards.