Action plan to tackle motor insurance costs
Liberty Insurance has welcomed a report that was published by the Department of Finance recently, which examines the state of the insurance industry in Ireland at present, writes Ultan Sherry.
The report, entitled 'The Cost of Insurance Working Group Report', looks at what may have caused incredible price hikes in motor insurance premia and makes a series of recommendations as to how this problem, among others, can be combated.
The action plan comes after motor insurance costs shot up by almost 70pc in the past three years. The report sets out 71 actions, as part of 33 recommendations, to be implemented to bring premia down. The recommendations include the setting up of a fraud database and the establishment of a new commission to look at compensation award levels in Ireland compared with abroad.
Responding to the report, Liberty Insurance said that they would continue to collaborate with Minister of State for Financial Services, Eoghan Murphy, industry representative bodies and all other stakeholders as required to effect reform and bring stability to the market.
Among the recommendations made in the report is a call for insurance companies to provide a more detailed breakdown to customers to help them better understand why their respective premiums have been set at a certain price, as well as setting out reasons as to why there have been large increases in premiums at any one time.
A spokesperson for Liberty Insurance told The Anglo-Celt: 'In line with the Customer Protection Code, we currently provide a premium breakdown to all our customers, highlighting any increases as a result of claims, convictions or penalty points, but also any discounts that may apply such as online or NCB discounts.'
Another big issue that has plagued the motor insurance in recent years has been the issue of fraudulent claims, which has also been a major contributing factor in the rise of the cost of premiums.
In their report, the working group reccomends that a fully functioning database should be established. This database would have the ability to identify uninsured drivers, compelling insurance companies to provide the driver licence number for the driver concerned. It's estimated that there are around 150,000 uninsured drivers on Irish roads.
When asked as to how they would tackle insurance fruad, the Liberty spokesperson stated: 'We have developed and are continuing to enhance our own Fraud Analytics database and optimising the use of our own data to identify suspicious cases across all products and areas of our business.'
The company also remarked that they have a dedicated Special Investigations Unit, which uses advanced fraud detection methods for instances of insurance fraud.
Dismay
Meawhile, the Irish Small and Mediuim Enterprises Association (ISME) has said that the government's report on motor insurance falls short of what is required.
Commenting on the report, ISME's chairman Neil McDonnell stated: 'We notice a reticence to tackle the notion that the appropriate redress for even the most minor of personal injuries is the gifting of a substantial sum in general damages. As long as this 'lotto culture' persists, Irish citizens and businesses will be forced to bear unreasonable insurance costs.'
Welcome
Meanwhile, Cavan Fine Gael Senator Joe O’Reilly welcomed the publication of the report. “Motorists here in Cavan have been hit by sharp increases in insurance premiums. The implementation of these recommendations will lead to more transparency in the insurance market, end the volatility that we’ve seen in the past, and also see the market opened up to new providers.
“In the interim, before the measures are fully implemented, we will make it mandatory for insurance companies to explain why they are increasing the cost of an individual’s premium,' he concluded.