Motorists are warned more premium rises on the way
THE rise in motor premiums will continue for the rest of this year, experts said.
They were responding to new inflation figures showing motor premiums jumped by 16.3pc in the year to May, according to the latest consumer price index from the Central Statistics Office.
This means that a €500 premium a year ago is now €81.50 more expensive.
Brian McNelis of the Irish Brokers Association warned drivers to expect further premium rises throughout this year.
"Between below-cost selling, reports of rising claims volumes and awards and incidents of fraud, we anticipate that motor insurance premiums have further to rise during 2015," he said.
He said premiums were rising and were due to keep rising because insurers had under-priced for the last few years and failed to put sufficient reserves in place.
And analyst with Goodbody Stockbrokers Eamonn Hughes said he expects motor premiums to keep rising due to increased regulatory scrutiny by the Central Bank.
The regulator is concerned about high levels of competition pushing premiums down to levels where insurers are not making sufficient profits, and worried about low levels of reserves on insurers' books.
Mr Hughes noted: "Increased scrutiny in relation to premiums should drive up premium rates over time as the Central Bank looks for insurers to deliver appropriate returns on new business."
The CSO said that overall prices were 0.3pc lower in the year to May compared with the same time last year.