New rules to improve transparency in insurance sector receive cautious welcome

New rules to improve transparency in the insurance sector in Ireland have received a cautious welcome, but advocates for reform in the sector have criticised the length of time it has taken to achieve the "micro-improvements".

The Central Bank have introduced new rules to require insurance companies to provide more detail to customers when it comes to renewing motor insurance quotes.

Customers must now be provided with details on what their premium was the previous year and they must also be given a breakdown of different coverage costs, including different prices for comprehensive, third party fire and theft, and third party only.

Insurance providers now also have to give customers 20 days notice of their renewal, up from 15 days, to give time to shop around.

The Alliance for Insurance Reform cautiously welcomed the changes but said that they barely begin to address the issues in the sector.

Peter Boland, director of the Alliance, said, "The Irish insurance market is notoriously secretive, with little or no useful data publicly available for policyholders or policymakers – a shocking situation for a sector policyholders are either legally or morally obliged to engage with.

"In this context, we welcome these new regulations and the minor additional information they will provide to private motor insurance policyholders. However, we note that only one of these reforms applies to liability insurance or most other types of insurance - the extension in renewal notification to 20 working days.

"So holders of liability, household, commercial motor or other forms of insurance will still not get last year’s premium printed on this year’s renewal notice."

Mr Boland also criticised the length of time it took for the changes to come into effect. They stem mainly from a Government working group on the cost of insurance which convened in 2016.

Brokers Ireland, which represents 1,250 insurance brokers, raised a concern that the new regulations could lead to further confusion for customers when it comes to renewing policies, though Insurance Ireland insists that it will help customers "in making informed decisions on the cover that is right for their needs".

The representative body called for a recalibration of claims costs, and said it is over a year since the Personal Injuries Commission established that Irish soft-tissue awards were 4.4 times those paid in the UK.