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Saturday 17 March 2018

Drivers demand lower premiums as major insurers back in profit

Dermott Jewell
Dermott Jewell
Charlie Weston

Charlie Weston

Drivers are calling for a major reduction in the cost of their motor cover, as insurance firms recorded a profit after years of hiking prices.

Premiums for motorists have risen by 70pc in the past three years, but now consumer groups have called for a "very serious review" of car premiums.

Home and motor insurer Aviva has seen its profits for the first half of the year rise by 12pc to €48m, after raising the cost of its cover.

Earlier this week, RSA said it returned to profit, with FBD expected to also have made profits in the first half of this year.

Together, the three insurers represent the lion's share of the motor cover market.

A recent report from the Department of Finance also noted that insurers had returned to making profits.

There have been falls in premiums in recent months, but many drivers are still being hit with hikes in the cost of cover.

The steep rises of the past three years continue to feed through the system.

Dermott Jewell, of the Consumers' Association lobby group, said it was time for major review of premium costs.

"This is a clear signal of the need for a very serious review of the outrageous prices of motor premiums," he said. "They must reduce the cost and burden on so many motorists who are struggling to afford cover."

He said the Government should tell insurers it was time to give something back to drivers.

Aviva admitted that the rise in its profits was driven by an increase in net written premiums. It also cited initiatives in the company's claims handling that resulted in a lower claims ratio and pushed up profits. It said it had a policy of fighting all cases of fraud.

Aviva Ireland, which employs 1,150 people, said that the benign weather in the year to date also contributed to the increased profits.

But its chief executive John Quinlan said the motor market remained challenging.

He added: "We continue to invest significantly in our fraud prevention and detection systems and are relentless in fighting all suspected cases of fraud, often at considerable cost."

He said that one recent case it defended in the High Court and in the Court of Appeal would cost the company €350,000.

This is understood to be a case where a judge said an Englishman who sued a Kinsale hotel for €1.4m over injuries he claimed he sustained when he fell out a window was "relentlessly" dishonest.

Earlier this week, RSA saw its Irish division return to profit in the first half of the year. It comes after the Irish unit of the UK insurer was hit by a massive accounting scandal in 2013.

The insurer reported a profit of £2m (€2.23m) over the interim period. This was up from a loss of £1m (€1.1m) in the same period in 2016, the group said. It said it expected to be profitable for the 2017 full year.

Goodbody Stockbrokers expects FBD to report profits of €9m for the first half of the year.

Irish Independent

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