POLITICIANS HAVE BEEN told that the recent spike in car insurance premiums is because prices have been too low and are now returning to a “correct base level”.
The Oireachtas Finance Committee today heard from representatives from the Society of Actuaries in Ireland (SAI) as part of a probe into spiralling premiums.
The SAI regulates the actuarial profession in Ireland and acts a supervisor of the insurance industry.
At the committee this morning, the SAI’s Gary Dunne said that in the past decade and a half car insurance premiums fell and the industry endured some tough changes.
“Part of the recent premium increases reflects the need to restore pricing to a level that provides better security for claim payments,” he said.
From the CSO statistics, car insurance prices fell 27% between 2003 and the start of 2010. Since 2010 we’ve had Quinn going into administration, RSA incurring losses of €240 million in 2013, the Setanta collapse, changes to the court awards and the Russell Case in 2014, the Civil Liabilities Bill and the RSA loss of €96 million in 2015.
“And over that period we’ve seen a 42% increase in the amount of injury board awards,” he added.
Dunne argued that insurance companies have been required to increase their cash reserves in expectation of payouts in the future.
“Insurance companies required significant increases in reserves,” he told the committee.
This meant that their pricing was too low over that period. This in turn is backed up by the Central Bank of Ireland statistics which showed motor underwriting losses of between €20 and €30 per €100 premium between the period of 2013 to 2015.
The SAI has said greater “evidence-based research” needs to be undertaken to inform policy.
“There has been some criticism of the lack of information on claims and market trends in the Irish motor insurance sector. This contrasts with the availability of information in the US and the UK,” the SAI said in a statement.
We believe that evidence-based research is vital to underpin informed policy making. We support Minister Eoghan Murphy’s call for greater transparency and we urge the government to commission an annual analysis similar to that performed in other jurisdictions.
Representatives from the Injuries Board were also present at the committee. They said claims have not increased this year in both number and value.
“In relation to claims, it’s not entirely clear how claims are contributing to this issue,” Conor O’Brien told the committee.
Our figures in recent [times] do not support the level of increase in claims and we cannot see how people justify the level of increases that we’ve seen.
Asked specifically about whiplash claims, Maurice Priestley of the Injuries Board said there has been no increase in claims related to whiplash.
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