Insurance hike alert as profits plunge

THE combined profits of insurance companies in Ireland fell 82% last year to almost €122 million. This follows a fall of 2% in 2007 and 10% in 2006.

One of the largest insurance firms, FBD said recently it believes insurance premiums are likely to increase by up to 15% in Ireland having already soared around 20% over the last year.

Motor insurance profits here, the largest contributor to the industry in both premium income and profits, plunged 92% to €35m from €357m in 2007.

The figures, contained in the Financial Regulator’s annual Insurance Statistical Review, indicate that there were 192 insurance firms in Ireland comprising of 59 life and 133 non-life companies. The numbers employed here rose by 665 to 11,790 last year. The total number of motor claims reported last year was just over 360,000.

Last year just over €62m was paid out in respect of claims both fully settled and in the course of settlement, and, as at the end of 2008 the provisions for all unsettled claims, notified and yet-to-be-notified, stood at €almost €406m.

Total gross premium income received by insurance firms fell to €35.9bn in 2008 against €46.15bn in 2007.

In 2008, €28.5bn of the total was generated by life companies — a drop of 26% and €7.4bn by non-life companies — a drop of 2%. Motor insurance had 37.62% of the market against 38.97% in 2007. Fire and damage to property was 25.20% against 25.7% in 2007 while liability was 18.38% against 19.68% in 2007.

Accident and health business was 15.20% compared to 11.42% in 2007.

The information in the review is primarily sourced from the regulatory returns provided by insurance companies to the Financial Regulator.

The cost of insurance has rising sharply over the last year.

CSO figures shows there were large rises in the cost of insurance, with motor cover over the last year which rose almost 14%.

Health insurance is up around 20% and house insurance is up about 26%.