Minister demands answers as insurance firms' profits surge
Junior Finance Minister Michael D'Arcy has highlighted "significant profits" among insurance firms as he calls them into fresh meetings.
The companies are coming under pressure to explain why they are not reducing premiums and why they provide only limited insurance cover.
Mr D'Arcy, who has responsibility for insurance, has written to all the main insurers, calling them into meetings to explain themselves.
And this week insurers are being called before an Oireachtas committee to explain why prices are so high, despite reforms of the compensation system being introduced.
Mr D'Arcy's letter points out that insurers are making "significant profits" but the cost of insurance remains high, with many firms struggling to get cover.
Mr D'Arcy has written to Aviva, Allianz, RSA, Liberty, Axa, FBD, AIG and Zurich, seeking a public commitment to cut premiums.
According to the letter, the Government wants insurers to "provide a strong public commitment as soon as possible to reducing premiums as well as broadening the types of insurance they will provide cover for".
Businesses have repeatedly complained they cannot get public liability cover and have to seek it from British insurers at huge expense. Some UK insurers are no longer interested in providing liability cover here.
The letter was sent as the Judicial Council Bill is being fast-tracked through the Houses of the Oireachtas.
It is hoped the bill will pass the Dáil stage this week, and thus provide for the setting up of a Judicial Council for judges. It also provides for the establishment of a personal injuries guidelines committee to recalibrate damages.
Mr D'Arcy says the bill is a key measure to address the gap between award levels here and those in the likes of England and Wales.
He wrote: "A question which has been raised, however, on a regular basis with me is: how can we be certain that if there is a recalibration of award levels downwards, that the insurance industry will reflect this in lower premium levels?"
This was particularly important in "an environment where insurers are making significant profits but the cost of insurance is still very high, or in some cases unavailable".
The latest figures show insurance companies have seen profits surge from covering homes, drivers and businesses.
Industry figures show 17 general insurers in this market made combined operating profits of €227m in 2017.
These profits were up from €16m in 2016, according to Insurance Ireland - equal to a rise of 1,418pc. Motor cover proved hugely profitable in 2017.
But Insurance Ireland insists general insurers had made underwriting losses for five years in the run-up to 2017. An underwriting loss is incurred after an insurer has paid out claims and accounted for administrative expenses over a certain period. And it claims insurance is a business with low profit margins.
This week, insurers are to be asked about their profit levels when they are called before the Oireachtas Finance Committee, which is chaired by Fianna Fáil's John McGuinness.
In a session entitled "Difficulties being experienced in relation to insurance", the TDs and senators have lined up representatives from Allianz, Aviva, Axa, FBD and Zurich to address the committee on Thursday.