Motorists to be given reasons for premium increases under new insurance code 

Drivers will be given reasons for higher premiums, and guidance on how to lower their costs, under a new transparency code launched on Monday.

Motorists will be given reasons for higher premiums, and guidance on how to lower their costs, under a new transparency code launched on Monday.

The Motor Insurance Transparency Code will see a premium summary statement provided by insurers at quotation and renewal, setting out last year’s premium, the new premium, the price difference, and key factors influencing pricing.Along with an overview of their personal risk factors and market trends, consumers will also be given clear guidance on how they can reduce their risk profile and potentially lower their costs.

The code was developed by a working group comprising of insurers and intermediaries, with the support of the Department of Finance and the Central Bank of Ireland. Implementation of the code now starts on a phased basis, and consumers can expect receive the relevant information in their insurance quotes from autumn.

The Alliance for Insurance Reform welcomed the Government’s publication of the Motor Insurance Transparency Code but said with premiums still rising, transparency must drive accountability and competition. “The code will initially be judged by how it educates and informs motorists. Over time, though, it will also be judged by what this information does for motorists - will it help drivers get a better deal? Does it make switching easier and more effective? It will not simply be about whether it improves communications, but whether it improves competition," said Alliance for Insurance board member Tracy Sheridan. 

“The focus will be consistent implementation across the market. That means premium summaries that are genuinely comparable between providers, and issues raised by consumers being addressed quickly. The code should be kept under active review and strengthened where the evidence shows it can better support switching and downward pressure on premiums.”

Insurance Ireland chief executive Moyagh Murdock said insurers are fully committed to ensuring the code delivers real and practical benefits for consumers. "While there is much work left to do to plan for the full implementation of the code, something Insurance Ireland will continue to engage with the department on, this launch reflects the insurance sector’s commitment to transparency and our leadership in advancing key elements of the Action Plan for Insurance Reform.”

Minister of State for Financial Services, Credit Unions, and Insurance, Robert Troy said the new code is a first of its kind for Irish consumers. "It will bring further transparency to the market and support consumers to know what they are paying for, and if there are legitimate reasons for why premiums have increased. By insurers and intermediaries explaining premium changes in plain language and providing insight into individual risk factors as well as wider market trends, the code will empower consumers to make more informed decisions. 

"It is my hope that this code will enhance switching behaviour and arm consumers with the right information to receive a better motor insurance outcome.

A review of the code will take place within 18 months, and the Central Bank of Ireland will provide a report to the finance minister in relation to adherence and impact.