Insurance Ireland, the representative body for the industry here, has defended the controversial practice of dual pricing in the market and claimed that regulating pricing could harm consumers.
Its interim CEO, Ger Hassett, told an Oireachtas committee that he does not believe the dual-pricing practice "is in itself a problem".
Dual pricing, where insurers offer new customers deep discounts compared to what existing clients pay, is currently being probed by the consumer watchdog and the Central Bank.
Mr Hassett insisted that the practice "rewards switchers" and "rewards competition".
While insurers have been vocal in criticising huge awards made by courts in insurance claims cases, the firms have also been making big profits.
Asked by Solidarity-People Before Profit TD Paul Murphy if he would consider dual pricing in the insurance industry to be a problem, Mr Hassett indicated he did not.
"I don't think dual pricing in itself is a problem," he said.
"I think there are issues that may or may not arise in how it's applied. I think it's a question of getting the balance right between having a competitive market and always making sure there's value out there for people who want to switch, and at the same time, treating existing, loyal customers fairly."
He insisted that dual pricing represents competition in the marketplace.
"On the one hand, we're being criticised for the fact that people feel there are uncompetitive practices in the market," he said, "and now this is a practice that rewards switching, that rewards competition."
Dual pricing uses data to pinpoint clients who are unlikely to challenge renewal quotes, with these often being vulnerable customers.
In effect, customers are charged a premium for remaining loyal to one insurer.
The Central Bank is looking at how prevalent dual pricing is in Ireland, and what it's impact on consumers is. Mr Hassett said Insurance Ireland welcomed the reviews of dual pricing being undertaken by the Central Bank and the Competition and Consumer Protection Commission.
"It is important that people have confidence that whatever pricing strategies are being applied are being applied fairly," he said.
"I think you've got to be really careful in terms of bringing in regulation of price. People can set out with the best of intentions and it's an area where it is full… of unintended consequences."
Sinn Féin TD Pearse Doherty and Mr Hassett clashed at yesterday's hearing in relation to the decrease in the amount of claims payouts over the past number of years.
Mr Hassett insisted that while the number of claims for damage to vehicles has declined, the overall cost of all incurred claims has risen.
Insurance Ireland conceded that motor insurance premiums rose by 16pc between 2014 and 2017 despite data showing declines in the number of claims and awards made. It insisted that premiums have stabilised or fallen since then.