Thursday 8 December 2016

Insurers deny rift behind move by Zenith to quit motor market

Published 27/08/2016 | 02:30

Zenith Motor Insurance has pulled out of the Irish market
Zenith Motor Insurance has pulled out of the Irish market

THE representative body for insurance companies has dismissed suggestions it stopped Gibraltar-based insurer Zenith joining the representative body.

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Zenith said this week it was exiting the market, in what is a new blow to the crisis-ridden sector.

It blamed an increasing regulatory burden and the uncertain legislative environment for decision to get out of the market.

It also cited what it called "a lack of engagement with us by Irish industry bodies".

No further explanation was available from the company about this.

But insurance brokers claim Zenith was annoyed at what it claimed were difficulties getting its application to join Insurance Ireland accepted.

It wanted to join the representative body to gain access to Insurance Ireland's database on claims, and a database on those who have penalty points.

Insurance Ireland has a data based called Insurance Link, which allows users to compare recorded claims with claims history information provided by new claimants against policy-holders.

However, because of data protection rules the policyholders cannot be named on this database. Despite this, insurance sources said the database was very useful at throwing up patterns in the battle to clamp down on dodgy claims.

Insurance Ireland also has a database called Integrated Information Data Service (IIDS). This is linked to the Department of Transport, and is used to confirm the accuracy of penalty point and no-claims discount information provided by customers when they are renewing or taking out new motor policies.

Chief executive of Insurance Ireland (II) Kevin Thompson denied that there was any disagreement with Zenith. He stressed that there are 40 insurers in the market but just 19 of them are members of the group.

Another six Lloyds syndicates are not members. He said insurers were joining and leaving the group all the time, and the group did not exclude any insurance companies from membership.

"There was no row with Zenith," he stressed.

It is understood Zenith had recently applied to join Insurance Ireland.

Mr Thompson said insurers that are not members of his organisation can gain access to Insurance Link, while the Department of Transport is prepared to share penalty point information with non-II members that meet data protection criteria.

The loss of Zenith from the market could put further pressure on premiums, which have risen by 70pc in the past three years.

Zenith will not write any new car insurance policies from February, although it will continue to insure motorbikes. Zenith used underwriting agencies here, and is understood to have around 5pc of the market.

Its decision to stop writing motor policies is set to reduce competition in the market, in a move that will benefit existing players.

Goodbody Stockbrokers analyst Eamonn Hughes commented in a note to investors: "One less player in the market provides opportunities for the remaining players."

Two months ago another Gibraltar-based company, Enterprise Insurance, collapsed.

Irish Independent

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