Tuesday 27 September 2016

Motor insurance premiums 'to rise by another 25pc'

Published 16/09/2015 | 02:30

Over the past 12 months premiums had gone up 24pc, and were due to go up by the same level in the next year, Insurance Ireland said
Over the past 12 months premiums had gone up 24pc, and were due to go up by the same level in the next year, Insurance Ireland said

Motor insurance premiums are set to rise by 25pc over the next year, a representative body for the industry said.

  • Go To

Over the past 12 months premiums had gone up 24pc, and were due to go up by the same level in the next year, Insurance Ireland said.

This would see a typical €600 comprehensive policy rise by €300 over two years.

Insurance Ireland blamed higher claims, as it launched a new report calling for various measures to lower personal injury awards in a bid to stop the surge in premiums.

But it denies it is using excuses around higher injury claims to justify massive rises in premiums, with consumers providing a "back-door bailout" for an industry that has been mismanaged.

Head of Insurance Ireland Kevin Thompson said: "We can only see further upward pressure on premiums."

Asked about the 24pc increase in motor premiums last year, he added: "We could see the same again next year."

He said insurers lost €242m collectively between 2010 and 2014, and inflation in claims was rising at a dramatic rate.

Insurance Ireland said the average level of Circuit Court award was up 14pc last year, with the average High Court award 34pc higher.

Mr Thompson said vehicle insurance premiums had been at unsustainable levels up to now.

And he claimed solicitors were encouraging people to reject awards from the Injuries Board and take a court case instead. He said 60pc of litigation claims goes on legal costs.

Criticism

Lawyers' fees are not paid when there is an Injuries Board award made. Insurance Ireland said claimants were advised by lawyers to fail to turn up for a medical examination, and were refusing to provide information on loss of earnings.

This means the Injuries Board cannot make an award. Personal injury claims have to first go through the Injuries Board before a court case can be taken. "Approximately 40pc of Injuries Board awards are rejected by claimants, partly because some solicitors adopt a policy of non-co-operation," Insurance Ireland said.

Mr Thompson rejected criticism of insurers from the Injuries Board that the high level of premium rises were unjustified. Asked if the insurance industry was seeking a back-door bailout for its own mistakes by hiking premiums, Mr Thompson denied this.

"We are not just laying all the cost back on the consumer. Insurance companies have taken their own actions as well," he said. RSA, Liberty and FBD are in the process of laying off staff.

Mr Thompson said insurance fraud added a further €100m a year to overall motor insurance costs, which equates to €50 on the average motor premium.

He questioned the recent ruling on Setanta Ireland, which found that the industry-funded Motor Insurance Bureau of Ireland was liable to cover the costs of claims against the company.

Irish Independent

Read More

Promoted articles

Editors Choice

Also in Business