Call for taskforce to help cut motor insurance costs

Soaring motor insurance premiums hitting drivers have prompted calls for a new taskforce to examine the profits being made in the industry to help rein in costs for consumers.

Stronger controls over personal injury awards are needed as well as more monitoring of profits in the industry, Fianna Fáil have warned.

The latest statistics reveal that premiums have shot up by a quarter over the past year — reducing hard won gains for motorists’ insurance costs in previous years.

The opposition party intends to lead an awareness campaign on motor insurance costs similar to one launched over mortgage interest rates previously.

Party finance spokesman Michael McGrath said changes are needed on how amounts are awarded in compensation cases and how the profits made by insurers are monitored.

“The benefits, which were achieved in the period up to 2013, in terms of reduced motor premiums are now evaporating. This is putting a squeeze on family finances and putting businesses under increased cost pressure,” he explained.

According to Central Statistics Office data, motor premiums have risen by around 24 % in the past year while insurers are also warning of further increases of up to 20% in 2016.

Mr McGrath points out that the Motor Insurance Advisory Board — now disbanded — had helped reduce motor insurance premiums by some 40% over a decade.

Fianna Fail finance spokesman Michael McGrath

The board found in the late 1990s that profits related to premiums for Irish insurers were considerably higher than for comparable firms in the UK.

“A similar examination of profitability is needed now. This would allow an assessment of the validity of industry claim that premiums are rising because personal injury awards are up to 3 times higher in Ireland than the UK,” said Mr McGrath.

The Cork South Central TD wants a new taskforce to oversee the industry.

Action also needs to be taken on exaggerated compensation claims as well as how these are awarded by the courts, it was claimed.

“Greater on the job training is required for members of the judiciary to ensure that comparable cases are treated in a similar manner.”

Experts have questioned why there is a billion euro difference between what the income is for insurers from premiums and their claim that this represents the high costs of compensation being awarded in the courts. Recent Central Bank data revealed that income from 10 companies underwriting motor and liability insurance is €1.4bn a year. Other records show the courts collectively made awards totalling €169m in compensation last year.