Warnings of more hikes in insurance premiums this year as claims rise
Published 05/08/2016 | 02:30
One of the largest motor insurers has warned of more premium hikes.
RSA said injury claims continue to rise and it expects premiums to keep going up this year.
And Aviva said it could not rule out more premiums increases as claims costs continue to be a serious challenge to it.
Motorists have already been hit by premium hikes of almost 40pc across all insurers in the past year, according to official figures.
This means many drivers are being asked to pay an extra €300 for cover.
And RSA, one of the largest general insurers in this market, reported operating profits of €3.6m for the first half of the year compared with a loss of €13.16 in the first half of last year.
It raised its premium rates for motorists by 35pc in the first half of the year, and by 14pc for household cover.
This meant it made an operating profit of £3m (€3.6m) compared with a loss of £11m (€13.16) in the first half of last year.
RSA's British parent company has had to pump almost €500m into the Irish unit after an accounting scandal left it with insufficient reserves.
In a results presentation, group chief executive Stephen Hester said the company was continuing to rebuild its Irish business.
Despite making an operating profit, it made an underwriting loss of £1m (€1.19m) in its Irish division for the first six months of this year.
On Ireland, he said: "We expect underlying premium trends to continue into the second half of 2016."
He cited what he called claims inflation for the premium rises.
UK-headquartered Aviva reported a 7pc rise in Irish operating profits for the first half of this year, with the rise attributed to higher premiums and a rise in customer numbers.
But it said a focus on defending itself against fraudulent claims was also partly responsible for it making a €43m profit in the first half of the year.
Some €25.5m of the profit was due to the general insurance business, which includes motor, homes and business cover.
Aviva is one of the few insurers in this market to make a profit on its general insurance business, with analysts pointing to its strong focus on defending spurious injuries claims for this.
Aviva Ireland chief executive Hugh Hessing said: "This improvement is driven by an increase in customer numbers supported by a pricing strategy that delivers insurance cover at a price that is competitive and sustainable."
Benign weather also helped to boost profits in the general insurance business, Mr Hessing said.
But he warned: "Claims costs continue to be a serious challenge in the personal motor market. We remain steadfast in our policy of defending our business against all cases of suspected fraud in the interests of our customers."
Asked about premium rises this year, the company added: "We can't rule out rate increases over the coming year."