Insurance for homes, cars to rise after RSA bailout
HOUSEHOLDERS face paying more for home and motor insurance after the largest player in the market had to get a second bailout from its British parent.
The financial turmoil at RSA Insurance Ireland is now set to cost families around €100 in higher premiums, experts said.
This is because RSA will be forced to hike premiums after its parent company had to shore it up again.
And other insurers will now seize the opportunity from the hobbling of RSA to charge more for home and motor policies, insurance analyst Eamonn Hughes of Goodbody Stockbrokers said.
The largest insurer of homes and motors in this market, RSA also operates the popular 123.ie brand, which it bought for €83m in 2010.
Official figures show that motor premiums have fallen by 10pc in the past year, and by 3.3pc for household insurance. This fall was now likely to be reversed, experts said.
Mr Hughes noted: "The capital injection by RSA and additional reserving is also likely to require a return to higher premiums as well."
A typical household spends around €400 on home and contents insurance, and €350 per car. This means it costs around €1,000 a year for insurance for a family with two cars. A 10pc rise would add €100 to the annual cost.
Head of the Irish Brokers Association Ciaran Phelan said that insurers were also likely to push up premiums because of more claims.
"There has been a significant increase in claims over the last few years and it is inevitable that this will lead to some hardening in rates," he said.
Broker Jonathan Hehir of Cover In A Click.ie said a typical family would pay at least an extra €100 in premiums.
"We estimate that motor insurance premiums will increase by 10pc to 15pc over the next 12 months."
There will be in a series of staggered increases throughout the year, he said.
The ongoing debacle at RSA Ireland has now led to the resignation of its group chief executive Simon Lee.
Mr Lee left the London-headquartered company after it said it has had to put another £135m (€160m) into the Irish operation. This is on top of £70m (€83m) it put into the reserves of the Irish insurer last month.
The move follows the resignation last month of RSA Ireland chief executive Philip Smith after financial irregularities were discovered in the Irish arm.
RSA said its Irish division had not put enough funds aside to meet likely claims.
RSA said it had completed a review of its Irish business and its reserves -- the money set aside out of premium income to cover future insurance claims.