Liberty Insurance has warned that the spiralling cost of motor premiums is likely to continue to increase across the industry over the coming six to 12 months, though to a lesser extent.
Figures from the Central Statistics Office released yesterday again illustrate the huge price increases motorists have faced with premiums up 38.3% in the past year and more than 60% since the beginning of 2014.
Such rapid inflation forced the Government to act with the establishment of a Department of Finance- led review which is due to report on the causes of the cost hikes by year-end.
Liberty Insurance director of personal lines Deirdre Ashe said more rises are likely to materialise in the coming months due to the risk-averse nature of the sector at present.
“In a kind of risk-averse environment it’s likely that prices will increase,” she said. “So then we have to look at how do we stabilise this. How do we look after our customers, the customers that we had last year and that we want to win back and the customers that we want to win tomorrow?
“That’s about driving an appetite among all of the players in the market to have increased visibility on claims; to have more discussion around how court awards themselves can be moderated in what would be called a volatile time; to try and look to understand how to carry the burden of market exits like Setanta [Insurance] and Enterprise [Insurance] that we saw leaving only two weeks ago.
“There are [Setanta and Enterprise customer] claims there that have to be paid. If we say incumbent insurers have to carry that cost well then that’s going to put up our cost that we have to then pass on. It’s possible, if not likely, that prices will increase [but] not to the huge extent that we’ve seen before.”.
She was speaking as Liberty launched its Car’NStuff marketing campaign aimed at strengthening its strong position among young drivers. The insurer is targeting under 30s by offering contents, gadget, and travel insurance, in addition to its existing motor business.
Liberty said it will offer gadget insurance on an iPhone 6 for €62.49 compared with a market average, based on the prices of three competitors, of €107.
Similarly, cover for an iPad mini will be available at the same price compared to an average of €78. Annual multi-trip insurance will cost €49 per person.
Liberty also offers two months free to drivers who take out a motor policy with the insurer. The campaign is not a bundling offer, however, and customers do not have to buy more than one of the policies to avail of the prices.
Ace European Group will underwrite the travel insurance with Mapfre Insurance underwriting the gadget offering. Ms Ashe described it as a return to its core market strength after a phase of transformation for the business.
She said the campaign was not an exercise in window-dressing against the backdrop of rapid premium inflation but said she accepted customers had incurred significant price rises in the past few years.
Research by Millward Brown for Liberty revealed that 64% of 17- to 29-year-olds feel sick or panicked when they leave home without their phone. Just 29% of the same demographic have travel insurance. One in three renters have contents insurance, while one in 10 have gadget insurance.
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