Insurance sector nets €217m

THE Irish insurance industry swung back into the black last year, earning €217 million profits — its first since 1999.

According to the Irish Insurance Federation 2002 Factfile, the bulk of the profits came from motor insurance, while property insurance contributed €74m to profits.

However, liability insurance made a loss of €56m in 2002 from a loss of €73m in 2001.

This will be a blow to employers’ groups who had hoped to see a reduction in their liability premiums following two to three years of increases.

IIF chief executive Mike Kemp said yesterday there was evidence the rate of growth in employers’ liability is beginning to level off.

The IIF said despite higher premiums for employer and public liability, insurance companies in Ireland are continuing to make massive losses due to capacity restraints and low level of providers. The IIF said over the past five years insurers have lost over €600m on liability insurance.

Mr Kemp also said that the recent cuts in motor premiums were the result of efficiencies within the industry in dealing with claims and not from the recommendations of the Motor Insurance Advisory Board report.

He said that the MIAB recommendations that could immediately result in a fall in motor premiums were for the Government to implement and not the industry.

The IFF called on the Government to move quicker to implement these reforms, which include the swift establishment of the Personal Injuries Assessment Board.

It said the easiest way to cut premiums is to reduce the number of accidents on the roads.

Though there has been success in reducing the number of accidents through penalty points, the number of deaths and accidents on Irish roads was still alarming.

The IIF wants the Government to develop a national road safety strategy and establish a garda road traffic unit to reduce accident frequency.

Mr Kemp added yesterday that the IIF fraud hotline had received over 900 calls from the public, with around two-thirds of the calls relating to fraudulent motor insurance claims.

According to the IIF Factfile, Irish life insurers had premium income of €7.2 billion, an increase of just 1.2% on the 2001 figure, while non-life premiums increased by 22% to €3.95bn.

The federation added that it is concerned about the level of pension coverage in Ireland and of funding levels within existing schemes.

It has undertaken research on these issues and the findings of this research is expected to be published next month.