Motor premiums tackled but liability cover still huge problem, says insurer

INSURANCE boss Mike Kemp acknowledged yesterday the cost of liability cover had reached crisis proportions.

But he warned there was more to come in the case of liability insurance. Addressing the Institute of Chartered Accountants in Dublin yesterday, Irish Insurance Federation chief executive Mr Kemp said: "there is no doubt that the twin problems of high liability insurance costs and contraction in the market have reached crisis proportions, and are having significant effects on businesses and on individuals."

While the increases have caused serious problems Mr Kemp said the performance of the markets and the experience with claims justified the hikes "even though clearly, and understandably, they were not welcome to policyholders. We may have turned the corner in motor insurance, but we're not there yet in liability."

Insurers may not have done as much as they could in explaining to policyholders why they deal with claims as they do and why premiums have had to increase, he said.

"We are now addressing that communications gap," he said. Explaining his case, Mr Kemp said most of the things that affect claims and premium levels are outside insurers' direct control.

"But concrete action is now being taken or is we hope on the verge of being taken by government to address a number of those areas, so there is hope on the horizon." Calling on all sides to take action, Mr Kemp said it was in the interest of all to support sensible reforms.

Policyholders can play their part by supporting sensible reforms.