Motor insurers must put more money aside, says watchdog
Published 25/11/2015 | 02:30
Motor insurers have been warned by the Central Bank that they are not putting enough money aside to meet accident claims.
The regulator said there had been a rise in the cost of settling claims between 2012 and last year, and insurers are facing more claims.
But there is a wide variation in the amount of reserves being put to one side to meet the claims, the Central Bank said.
Its report suggests that insurers put in place a "dynamic" policy to raise prices to counter higher costs.
Premiums shot up by 30pc in the past year so a policy for €500 last year now costs €650.
Director of insurance supervision at the Central Bank Sylvia Cronin said: "Overall, it seems that the money set aside for private motor by some companies is approximately half the level per vehicle compared to others for more recent accident years.
"While there are valid reasons for some of these differences, companies need to carefully consider the extent to which these differences are appropriate."
The Central Bank is to contact insurers to follow up on the issues identified in the report.