‘Don’t allow firms dictate insurance sector reform’

Insurance companies should not be allowed dictate reform processes without evidence, insists an industry expert.

Dorothea Dowling, formerly of the Motor Insurance Advisory Board (MIAB), appeared yesterday before members of the joint Oireachtas committee investigating the rising cost of motor insurance.

She told the committee she was sorry to say that “price is not the only problem with the insurance industry”.

The Government should focus on making Ireland a benign environment, she said, as reputational damage is acting to discourage new entrants to the insurance market.

The committee also heard from the Consumer and Competition Protection Commission, which on Tuesday announced it would investigate potential price signalling in the industry.

The CCPC said its consumer helpline received 1,466 queries about motor insurance in the last year, 227 of which specifically related to increasing motor insurance premiums.

The organisation said it met with Insurance Ireland in October 2015, but has since become concerned at statements forecasting price increases.

“We have been frankly very concerned by these statements and this week, after detailed planning over a number of months, we issued summonses and formal requests, under our powers, for information to players in the sector,” said Karen O’Leary of the CPCC.

She said that in 2005, the CPCC — then operating as the Competition Authority — had identified the need for insurance companies to share more data.

Committee chairman John McGuinness said it had heard from witnesses during the week who were calling for greater transparency from the insurance industry.

He asked the CPCC why this recommendation was not acted on earlier by the organisation if it had identified this factor in 2005.

The CPCC said it had not received any complaints in relation to this.

The committee questioned if the CPCC will have legislative power to access raw data held by Insurance Ireland, which said it will if it believes there is a reasonable breach.

The Irish Brokers Association told the committee that current increases reflect pricing being restored to correct levels, as they were too low five years ago.

Later in the day, Insurance Ireland said: “We do not deny this was a factor; rates had become too low, and a correction was needed, but on its own, under-pricing does not explain the level of premium increases we have seen.”

Insurance Ireland reiterated its view that rises in premiums are related to increases in claims.”

However, both senator Gerry Horkan and TD Seán Sherlock said this contradicted statements from the Personal Injury Assessment Board from earlier in the week.

Michael Horan of Insurance Ireland said premiums are “primarily dictated by the cost of claims in general and by an individual’s claims experience”.

Insurance Ireland also rejected calls for more transparent data, saying it shares with the Central Bank data that is published as part of the bank’s annual report.

Mr Sherlock said: “You’re saying the data is available and it is clearly not. We don’t have visibility into the stark profit levels that can be made by insurance companies.”


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