Monday 23 October 2017

Little hope of cuts to motor insurance premiums as firms struggle

Central Bank deputy governor Sharon Donnery. Photo: David Conachy
Central Bank deputy governor Sharon Donnery. Photo: David Conachy
Donal O'Donovan

Donal O'Donovan

The country's motor insurers all remained loss-making in the first half of 2016, according to the Central Bank.

The stark figures are a signal that there is little hope of relief for customers who have suffered massive insurance premium hikes over the past year.

The figures are included in the Central Bank of Ireland's 'Macro-Financial Review of 2016', a round up by Dame Street of a range of issues affecting the Irish economy.

Looking at the insurance sector, Central Bank deputy governor Sharon Donnery said the domestic non-life insurance industry continues to experience operating challenges - including all of the country's motor insurers suffering losses.

"All the domestically focused, high-impact, non-life firms reported underwriting losses in the first half of 2016, albeit at lower levels than in the same period of 2015.

"Those losses are mainly concentrated in the motor insurance market," she said.

The losses were not enough to raise a question mark over the stability of any insurer, the report said.

"The overall solvency position of the non-life sector remains high."

That at least should be a relief to customers who have suffered in recent years from the fallout of crisis-hit insurers at home - such as Quinn Insurance and RSA - and abroad, including Malta-regulated Setanta and Gibraltar-based Enterprise Insurance.

Prices

In a report earlier this year, rating agency S&P said it thought Irish motor premiums would come close to their peak by the end of next year.

Prices were rising at a rate of 40pc at one stage during the summer.

Although that rate has slowed, they are still up by about 25pc in the past year, according to Central Statistics Office figures.

In some cases drivers are seeing premiums more than double when they renew their cover.

In its wider review of the economy, the Central Bank said that Ireland faced "downside risks" due to the country's vulnerability to domestic and external shocks, high public and private debt, as well as Brexit.

The Central Bank said it expected growth for this year to hit 4.5pc, slowing to 3.5pc in 2017, which is in line with forecasts from other agencies. Though slowing, those rates are still likely to be among the highest in Europe.

Irish Independent

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