Report finds most insurers charge different prices for the same risk 

Complexity means there is a tendency to believe it is easier to stay with a current provider rather than switch 

The report found that the complexity of insurance means most consumers have a limited knowledge of how the industry operates. Picture: iStock

Irish consumers prefer to stay with their existing insurance provider and are worse off as a result a report from the Central Bank has found.

The interim report confirms that most insurance companies apply some form of differential pricing, offering discounts to new customers or those who negotiate on price.

The Central Bank said dual pricing is evident across the private car and home insurance markets, where new and renewing customers are charged lower premiums than those who renew automatically without any difference in their risk profile.

They said the complexity of insurance means most consumers have a limited knowledge of how the industry operates. "This leads to less involvement and a tendency to believe it is easier to stay with a current provider rather than switch."

A survey of approximately 5,500 consumers is ongoing by the Central Bank which found that many view insurance as difficult and boring, which discourages active involvement. 

"While many consumers are suspicious of insurance providers, there is a tendency to feel it is better and easier to stay with their current insurance provider rather than switch," the Central Bank said.

Consumer Quote: “It’s more convenient to stay where you are. You’re kind of hoping they’ll meet you half way.”

The Central Bank said the review is continuing and it will undertake further analysis and consider the likely costs and benefits of any potential solution. "Once this work has concluded we will publish a report or consultation on proposals for reform, as appropriate, in 2021."

Insurance Ireland, the representative body for insurance companies, said the report finds that differential pricing can encourage competition and innovation and facilitate market access for some consumers.

"It also finds that the practice can bring costs for other consumers," they said in a statement.

"This, in our view, underlines the importance of engaging with insurance providers and intermediaries to get the best deal and shopping around regularly, as consumers would with utilities such as telecoms/broadband or gas and electricity services." The organisation said its members are already in the process of making changes to improve transparency where applicable.