Irish Examiner view: Exploiting a captive motor insurance market

Insurance companies maintain a powerful lobby.

One of the few things all of our governments have had in common is a visceral aversion to price controls. 

One after another, they avoid using their power — our power — to impose restraints on businesses to protect captive consumers. This faith in that nebulous adventure we call the market tips the scales in favour of businesses and disadvantages consumers corralled by one regulation or another.

Our housing crisis is an example. A reticence to control the price of building land is a huge factor. The refusal to insist our lenders charge EU mortgage rates, rather than far higher Irish rates, is another. 

So, too, are barriers making it difficult, if not impossible, for Irish citizens to source a cheaper mortgage in the EU’s single market.

A new Central Bank report points to another area where consumers are exploited. The Motor Insurance Report shows the average cost of motor insurance jumped 50% in seven years and that insurers saw profits on motor coverage jump by 9% to €142m last year. 

The Alliance for Insurance Reform says the report “lays bare the scale of the greed... enriching insurance companies, brokers and lawyers...”

Insurance companies maintain a powerful lobby. Suggestions that court awards are beggaring the sector are routine. 

Yet, these figures do not lie. They show how an unfettered sector can become so powerful that any sensible society would assert some control over the costs it imposes on it.