Hard-pressed consumers already struggling with a myriad of bills are to be hit with hikes of up to 12% in the cost of their insurance as premiums continue to spiral even higher.
Rising claims costs and a slowdown in the number of settlements are putting the squeeze on insurers which is being passed on in the form of ever-higher premiums.
The chief executive of FBD — the only Irish-owned insurer in the market — confirmed that its customers were going to have to fork out more for cover and warned that similar increases are coming down the tracks for everyone else.
“We believe everybody, not just FBD customers, are going to pay more for their insurance… The cost of claims is what determines the price of premiums so if we’re right and if claims inflation is under way, then everybody, not just FBD customers, will pay more,” said interim chief executive Fiona Muldoon.
Speaking as the insurer announced losses in excess of €96m in the first half of the year, Ms Muldoon confirmed that all its customers would be hit to some degree, including farmers — a key customer group that it had been reported would be spared.
Farmers will be hit with “modest” single-digit percentage increases in the price of their policies while motor insurance customers will face bigger hikes.
In the past 12 months alone, the price of FBD’s motor insurance policies have surged by more than 20% and a further double-digit increase is now on the horizon.
“We need to see more increases that’s for certain but I would be talking about a double-digit increase, I think [it will be] market wide but a low double-digit increase.”
The Consumer Association of Ireland called on the Government to re-establish the Motor Insurance Advisory Board to review the “excessive costs” in the market and find ways of relieving the pressure on customers.
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