Insurance firms ‘must drop prices by 10%’

ALL INSURANCE companies should reduce their premiums by 10% immediately, Oireachtas Enterprise and Small Business Committee chairman Donie Cassidy insisted yesterday.

Speaking at Fianna Fail’s annual parliamentary meeting in Sligo, Mr Cassidy said he had received assurances from the Taoiseach that the insurance issue would be given top priority in the forthcoming Dáil term.

“What we are looking for in the autumn session is for the Government to bring forward legislation and have it passed or substantially completed for the spring session.

“We want to be able to go back to the insurance companies and say we have done our part as Government, now we want to see your bona fides and you reducing your premiums,” he said.

In August a report into the insurance industry by the Enterprise Committee called for a gradual decrease in premiums of up to 30% to bring prices back to what they were three years ago.

However, Mr Cassidy yesterday called for an immediate 10% decrease given the profitability of the industry which has begun to show healthy profits for the first time in several years.

“With the profits they have made for the first six months of this year, I’m calling on them to reduce their premiums by 10% immediately and that’s not happening. I have not got one policy holder to come to me to say their insurance has been reduced,” said Mr Cassidy.

“Insurance is the second biggest expenditure on everyone’s balance sheet after wages. It’s unsustainable that premiums have increased for the last three years from 150% in the hotel sector to 350% and it’s not justifiable. Now they’ve all had their six monthly reports and they’re all back substantially making profits. The insurance industry in Ireland will make €700m profit this year,” he said.

Confirming that the Government would focus specifically on the insurance issue when the Dáil returns next month, Environment Minister Martin Cullen said there was no justification for the cost of insurance.

“Any person in public life, whether in national politics or in local politics, has realised over the last 12 months the whole insurance area is a big issue. What started out as just a question on motor insurance has now travelled right across to the area of business insurance and public liability,” he said.

Mr Cullen said improvements had been made and stressed the Government’s determination to act quickly.

“We are going in the right direction but there is a determination in Fianna Fáil to upscale this and see the necessary legislation put in place,” he said.