Tuesday 22 October 2019

Companies accused of price-gouging their customers despite bumper profits

Insurance companies have been accused of price gouging their customers. (stock photo)
Insurance companies have been accused of price gouging their customers. (stock photo)
Charlie Weston

Charlie Weston

Insurance companies have been accused of price gouging their customers.

A Government minister also said he did not trust the industry and does not hold insurers in high regard.

Insurance companies were called on by Junior Minister Michael D'Arcy to re-enter sections of the market they got out of in the past few years.

Mr D'Arcy, who has responsibility for insurance reform, said he recognised that voluntary community groups and businesses were struggling with the cost of cover.

Sinn Féin's Pearse Doherty accused insurers of "gouging" customers, given that their profits shot up by 1,300pc in one year.

"I don't trust them. They are involved in price gouging, they are involved in spin, they are involved in bluster. They made profits of a quarter of a billion euro in 2017," he said.

The minister said he also did not trust the industry and does not hold insurers in high regard.

Fianna Fáil finance spokesman Michael McGrath said charities, festivals and firms were facing an insurance crisis. He said the cost of cover was closing businesses and causing festivals to be cancelled. "We are at a crisis point. This is not sustainable," he told the minister.

Mr D'Arcy replied that the insurance situation was an "emergency".

Experts said that voluntary groups, such as children's play centres, and firms are unable to get public liability and employer liability cover as many domestic firms are not prepared to provide this insurance.

Injuries

They have to go to insurers based in the UK, but many of these are turning away from this market due to high court awards and uncertainty around settlement levels for injuries.

Mr D'Arcy told the Oireachtas Finance Committee insurers should get back into the business liability sector of the market and cut premiums for cover they do provide.

He said Government moves to legislate for a judicial council that would allow judges to recalibrate award levels should result in insurers providing more cover to businesses, charities and festivals.

Mr D'Arcy said: "It will be important for them to widen their risk horizons and re-enter segments of the market that they have exited from previously, as a measure of good faith that the claims environment should begin to stabilise upon the enactment of the Judicial Council Bill legislation."

Mr D'Arcy defended the actions of the Government and insisted that motor insurance premiums fell by 24.5pc since they peaked in July in 2016.

There were 50 fraudulent insurance cases reported to the Garda National Economic Crime Bureau since last October. Half were staged accidents, the minister said.

Irish Independent

Also in Business