Revealed: Irish profits for insurer twice what was planned
Firms deny rip-offs as they admit to soaring margins
Three leading insurance companies were up to twice as profitable as they planned to be last year.
This emerged when Axa, Allianz and FBD appeared before the Oireachtas Finance Committee to deny ripping off consumers and businesses by making big profits.
The three insurers represent 50pc of the market.
Fine Gael's Senator Kieran O'Donnell forced the three insurers to acknowledge that they are making much higher profit margins at the moment than they had targeted to make.
He was told that Axa made profits of €89m in this country last year on premium income of €770m. This gave it a profit margin of 11.5pc, compared with a target of 5pc.
FBD made profits of €50m last year, a margin of 13.4pc compared to a target of 8pc. Allianz had targeted a 6pc margin but made €37m profit, a 7.4pc margin.
The insurers were called on to cut premiums.
Recently, Justice Minister Charlie Flanagan accused insurers of profiteering, while Junior Finance Minister Michael D'Arcy referred to "significant profits" being made in the industry.
It was also revealed last month that profits jumped by 1,300pc in 2017, despite the country being gripped by an insurance crisis.
Industry figures show 17 general insurers in this market made combined operating profits of €227m in 2017, the latest date for overall data on the sector.
However, the industry claims its overall profit margin is just 6.5pc in a market of €3.51bn in premium income.
Axa Ireland chief executive Philip Bradley denied "excessive profitability" was a feature of the market. He told chairman John McGuinness the market is small, has 30 insurers and there are high and volatile claims costs.
Industry players lost €1.1bn between 2013 and 2017 on motor and liability insurance, he said, with the industry paying out €1.1bn more than it collected in premiums.
But he admitted that Axa is currently profitable.
FBD boss Fiona Muldoon argued that exaggerated claims are "as big as fraudulent claims" for their company.
Allianz chief executive of Sean McGrath said: "If the cost of claims in Ireland falls, insurance premiums will fall."
Getting the "disproportionately" high level of injury awards under control was the biggest issue for insurers.
The three insurers said exaggerated and false claims were a major problem.
But Sinn Féin's Pearse Doherty alleged the industry is using the issue of exaggerated claims as an excuse to push up premiums, and profits.
He told Ms Muldoon: "You are in here with your big profits.
"The industry is completely exaggerating fraud to justify the type of premiums you are charging and the increases."
He said there were just 19 fraudulent cases reported to gardaí by insurers between last October and March.
This was despite the three insurers earlier claiming that one in five of all claims they receive is exaggerated or fraudulent.