Motor insurers under fire after €329m profits

THE Consumer Association last night criticised motor insurance companies for failing to reduce premiums after it emerged they recorded profits of €329 million last year.

Overall, insurance companies made profits of almost €690m last year, two-thirds more than 2003.

Figures from the Financial Regulator show the country’s car insurers earned the largest slice at €329m. This compares with profits of €213m the previous year.

A breakdown of the figures show AXA made the most profits from motor insurance premiums, earning €73.2m. It was followed by Hibernian, which raked in €69m, Quinn Direct with €53.2m and Allianz with profits of €38.3m.

The insurance industry yesterday claimed the increase in profits came despite consumers benefiting from premium cuts over the past couple of years. It claimed motor insurance premiums have fallen to 1999 levels, while CSO figures show insurance costs down 24% in two years.

The total revenue generated by insurance companies from motor premiums fell 10% to €1.7 billion, reflecting the decline in car insurance costs. The motor industry accounts for almost 40% of all non-life insurance premiums.

Mick Murphy of the Motor Insurance Justice Action Group said the industry was making excessive profits in Ireland. He said the recent fall in premiums had been “crumbs”.

“The profits are now 15 times what they were in the 1990s and even then they were considered high,” Mr Murphy said yesterday.

He said profits would be even higher if companies reduced the amount they were holding in reserve for future claims. He said there was “massive scope for further cuts in premiums”.

The health insurance sector made total profits of €43.1m, nearly double the figure in 2003. Some €233m was earned on property insurance, up from €143m in 2003.

Overall, there a 1.7% decline in the total amount of premiums written. When investment income is added, industry profits were almost €1 billion last year.