Watchdog seeks to cut insurance costs

IRISH households could save up to €150 every year after plans to shake up home and motor insurance were published yesterday.

The State competition watchdog said Irish insurance costs were too high and recommended new measures to force insurance companies to become more customer-friendly and make it easier to shop around for a better deal.

Competition Authority chairman John Fingleton said that competition in the insurance market was “at best sluggish”.

The authority’s report into the market contained 47 recommendations to make it more open, transparent and competitive. But he said it was now up to the Government and the financial regulator to make the recommendations a reality.

Among the changes proposed are forcing insurers to give customers a certified history of their insurance claims every year.

This would help customers who recently made a claim on their insurance to take their business elsewhere by making it easier for a rival insurer to make an informed decision.

Insurers had been slow to provide a quote for customers with a recent claims because they could not get all the information they needed, said Dr Fingleton.

The authority also wants to force insurers to break down their premium to each customer in order to justify their charges. This would allow motorists in high-risk categories, for example young male drivers, to see how much of their premium is down to their risk profile and identify potential savings.

“Many motorists, businesses and voluntary groups do not have enough information to help them search for better insurance quotes, and when they do search, they find limited choice,” said Dr Fingleton. He said the Irish Financial Services Regulatory Authority (IFSRA) could begin implementing the necessary changes within weeks. But there was little the Competition Authority could do if its proposals were ignored.

The body representing insurance brokers said it would work constructively with IFSRA and others to bring about “any change which will be in the best interest of consumers”. But it warned that the recommendations could result in higher charges for consumers thanks to a tougher regulatory regime. Dr Fingleton disputed this, however.

There was also good news for businesses after the authority called for insurers to give them more time to obtain competing quotes in advance of their annual policy renewal.