EU car insurance probe could lead to cheaper premiums and refunds 

Motorists could be in line for cheaper premiums and refunds if the insurance industry is found to have blocked new players from entering the market.

The European Commission has found Insurance Ireland breached EU antitrust rules, effectively restricting competition in the industry.

In a preliminary ruling, it found Insurance Ireland “arbitrarily delayed or de facto denied access” to companies that wanted access to its data sharing system, Insurance Link.

"This prevented competitive entry of new players and thus reduced Irish drivers' choice of motor insurance policies at competitive prices,” EU commissioner for competition, Margrethe Vestager, adding that "motor insurance is a significant cost in the budget of every family and business."

Consumer advocate Dermott Jewell said the finding is “very significant and serious”.

He told the Irish Examiner calls for lower premiums for motorists will not be enough, and that refunds may be on the table if the investigation’s findings are upheld.

Mr Jewell, policy and council advisor at the independent non-profit Consumers' Association of Ireland, said the findings by the Commission deserve urgent attention from the Government, the Competition and Consumer Protection Commission (CCPC), and the Central Bank.

He pointed out that motor insurance is legally required and when choosing a policy, affordability and competitive choice are key criteria for the consumer.

“The commission raises very significant and serious questions that must be fully addressed, in detail, by Insurance Ireland,” Mr Jewell said.

 “The allegation that any kind of barrier to entry, into this specific area of insurance, demands immediate and urgent Government intervention and investigation by the CCPC and the Central Bank,” he added.

Insurance Ireland covers more than 90% of the Irish car insurance market. Its members include AIG, Aviva, Axa, FBD, RSA, and Zurich.

It said it notes the Commission’s statement but that it is important to emphasise it is a preliminary view and not its final decision.

"Over the last four years, Insurance Ireland has cooperated with the investigation of the European Commission and we will continue to do so through this stage of the process," it said in a statement.

"We will now assess the points set out by the European Commission and we are confident that we can allay the European Commission’s perceived concerns."

Junior finance minister Sean Fleming, who is also chairperson of the Office to Promote Competition in the Insurance Market, said he notes Insurance Ireland's comments but added that while the findings are preliminary "this is a very serious matter" and he awaits the conclusion of the investigation.

"Separately, the Government continues its important work of reform of the domestic insurance sector. It is the Minister’s intention to bring forward new insurance legislation in the autumn," his department said.

The EU case is the latest investigation into unfair or anti-competitive practices in Ireland's insurance sector.

The Central Bank of Ireland is conducting a separate review into the practice of dual pricing whereby new customers are charged lower premiums with existing, loyal consumers losing out.

An interim report published in December found that dual pricing was taking place across the private car and home insurance markets.

The UK's financial watchdog has already banned dual pricing and the Government and Central Bank are coming under pressure to do likewise.

Car insurance premiums have hit the headlines many times over the last decade as prices have rocketed.

Premiums paid by motorists increased by 35% from 2009 to 2019, yet claims cost per policy decreased 9% over the same period, a report from the Central Bank found last November.

That 10-year period from 2009 to 2019 showed massive swings in premiums.

The Central Bank report said they actually fell 13% from 2009 to 2013, before rocketing 63% from 2013 to 2018, and falling again 4% from 2018 to 2019.

Insurers have been grilled before the Oireachtas Finance Committee on a number of occasions, with TDs and senators lambasting soaring premiums as unjustified and arbitrary.