Flanagan goes to war with leading insurers FBD and calls for EU to crack down
Justice Minister Charlie Flanagan has launched a scathing attack on the "handsome" profits of one of country's leading insurers, FBD.
Mr Flanagan escalated the Government's war of words with the insurance industry in an interview with the Irish Independent by singling out the largest Irish-owned insurer following the recent announcement that its profits had doubled in the first-half of this year. Mr Flanagan claimed FBD was making a "handsome" profit of €1.25m a week and demanded it cut its premiums.
"I am always reluctant to name names but FBD has now moved from a situation where it was making a million euro profit a week to now making €1.25m profit a week.
"That's handsome," Mr Flanagan said.
"This is a wholly owned Irish company set up by Irish farmers and I believe it's important now that we see the resolve on the part of the insurance company to reduce premiums that they promised.
"I look to profits of €1.25m a week and I say they can do much more. What I am saying is that insurance companies operating in Ireland are making very handsome profits and they're doing so without operating in a transparent arena."
FBD Insurance, which has more than 500,000 customers in Ireland, recently reported profit before tax of €38.6m in the six months to the end of June, up from €18m in the previous year. Chief executive Fiona Muldoon said it made "no apologies for making a profit".
"Like every company, we are in business to make a profit for our shareholders and we are not apologising for that," she previously told this newspaper.
She insisted FBD offers "very good-value insurance".
FBD declined to respond to Mr Flanagan's remarks and pointed to Ms Muldoon's recent opinion piece in the Irish Independent where she denied the industry was making super profits and questioned whether judges and lawyers were doing enough to tackle high award levels and suspected fraud.
But Mr Flanagan turned his ire directly on the industry, repeating there was a "lack of transparency".
Without mentioning a specific company, he said over the past year he had seen instances of insurers "plucking figures from the sky" to calculate premiums. He called on the EU to mount a crackdown on insurance companies and said he looked forward to the completion of the European Commission's investigation into allegations of cartel behaviour in the Irish insurance industry.
"I look forward to that study being completed next year. Insurance companies have been quick to absolve themselves of responsibility for reducing premiums," he said.
"I think it's important that the insurance industry operates under a transparent framework. I want to acknowledge what Europe is doing and go further and say that I would like to see greater initiatives on the part of the EU at introducing a more rigorous arena for insurance companies to trade in.
"There is a lot of secrecy, there is an absence of transparency and what we're seeing is handsome profits.
"The European Commission is investigating reports of a cartel. I don't have that evidence."
Mr Flanagan said that premium increases were "unfair".