It's way past time that the brakes were applied to run-away premium increases
Published 05/08/2016 | 02:30
It is time to put the brakes on soaring motor insurance premiums.
With two of the largest players in the market making profits, the pounding being taken by the State's more than two million drivers needs to stop.
Premiums have been shooting up for more than three years now. It is not unusual for motorists to be asked to pay an additional €300 to get cover, even though nothing has changed about their driving profile.
And that is just good insurance prospects.
Anyone with a claim, penalty points, or a car that is more than 15 years old is being quoted crazy premiums, if they can find cover at all.
Young drivers are being hit with enormous premium rises.
None of this is the fault of ordinary, decent drivers.
It is the fault of insurers that imprudently under-priced insurance in a foolish scramble for market share, and then failed to put sufficient reserves in place to meet claims.
It is the fault of witless Central Bank regulators who did not spot the build-up of the problem.
And it is the fault of dodgy claimants, and claims-harvesting lawyers, turning "compo" legal actions into a mini industry.
Insurers are to quick to yield to too many of these questionable claims. Some two out of every three claims are settled outside the courts and the Injuries Board, which does not pay legal fees.
The Government's response to the motor insurance crisis has been pathetic. The market has also been rocked by the collapse of Gibraltar-regulated Enterprise Insurance.
But there is hope.
Aviva has shown, by again reporting profits in its general insurance division in this country, that a zero tolerance approach to dodgy claims, and a determination to challenge these, can reap rewards.
It made a profit of €25.5m in the first six months of this year in its general insurance division.
And the other major player in the motor market here, RSA, returned an operating profit for the first six months of this year, compared with big losses last year.
All this means the trend for insurers outrageously hiking premiums, in what amounts to nothing more than a back-door bailout for their poor business decisions, has got to come to an end. Insurers, enough is enough.