We need your help now
Support from readers like you keeps The Journal open.
You are visiting us because we have something you value. Independent, unbiased news that tells the truth. Advertising revenue goes some way to support our mission, but this year it has not been enough.
If you've seen value in our reporting, please contribute what you can, so we can continue to produce accurate and meaningful journalism. For everyone who needs it.
Sign in. It’s quick, free and it’s up to you.
An account is an optional way to support the work we do. Find out more.
By continuing, you are indicating that you accept our Terms of Service and Privacy Policy.
THE WAY OFFICIAL CSO stats on the cost of car insurance are compiled leaves it “open to the industry to knowingly present certain figures that may not reflect the full picture”, Sinn Féin’s Pearse Doherty has claimed.
CSO stats say that the cost of premiums has fallen in the last few years, but that isn’t being felt by many customers, Doherty said.
The government is yet to implement many of the recommendations from the Cost of Insurance Working Group it set up – such as dedicated garda unit to tackle insurance fraud. The opposition claims the public is being left out of pocket because of this inaction, with the official stats provided not reflected on the ground.
CSO figures
According to most recent Consumer Price Index for January, the average cost of motor insurance had fallen six points in the previous 12 months.
In a recent parliamentary question, Doherty asked the Taoiseach the way in which the CSO acquires data on the price of motor insurance.
In reply, Varadkar said that to compile that particular index as part of the overall Consumer Price Index, the CSO collects data on premiums from a sample of insurance companies.
“The sample covers approximately two-thirds of the motor insurance premiums written in the market,” he said.
The insurance companies are requested to supply price quotations for defined customer profiles for both new and existing customers. This request is made monthly via email from a member of the CSO’s CPI team directly to a representative of each of the insurance companies in the sample. As with all companies contacted directly for information used in the compilation of the CPI, the CSO team members identify themselves.
The Taoiseach added that the CSO keeps the profiles regularly updated so they can continue to be representative of the market, collating characteristics such as model and age of the car, and the sex, age, location and occupation of the insured person.
Doherty said that a “more detailed and robust way of checking the actual prices is warranted given that the public continue to report large increases”.
For example, a survey of 4,000 motorists from the AA last year found that 56% of those polled said they’d seen a significant increase in their car insurance at the time of renewal. This dataset, however, would be smaller than that available to the CSO.
The Sinn Féin finance spokesperson said he questioned whether the insurance industry could be relied upon to provide “straight up data” when approached officially by the CSO and asked its prices.
“The CSO approach is fine for the price of milk or nappies – or most products – but insurance is a notoriously difficult product to price which varies widely from person to person and place to place seemingly without rhyme or reason,” Doherty said.
“Through an FOI request I have obtained documentation which shows an industry commissioned report actually disputes the CSO’s figures of a large increase arguing that in fact prices only increased by 22% between 2011 and 2016.
At the very least, Ministers quoting these figures should be more circumspect given their ultimate source is the insurers themselves.
Reacting to Doherty’s claims, a spokesperson for Insurance Ireland told TheJournal.ie that it has “always accepted the veracity of the CSO process and considers its data to be indicative of market conditions”.
“This was a view shared by Deputy Doherty when he relied on the index in Dáil contributions when premium levels were increasing,” the spokesperson said.
The report Deputy Doherty refers to was supplied to the Government’s Cost of Insurance Working Group by Insurance Ireland and it stated that it is not correct to directly compare the increases it found in premium levels (22%) with the CSO index. The purpose of this comment in the report was to avoid inaccurate interpretations such as those put forward by Deputy Doherty.
The spokesperson added that “systemic reform” is needed to address the “volatility of claims” which helps to drive the cost of premiums upwards for some drivers.
“We want to see greater urgency in the pace of reform to tackle the costs all policyholders pay,” the Insurance Ireland spokesperson added.
Cost of awards
On a repeated basis, the level of compensation payouts for injuries sustained in road collisions has been cited as a chief cause in the high cost of premiums in Ireland.
A report from the Personal Injuries Commission last September found that the average claim for soft tissue injuries in Ireland was €19,862 – over four times higher than the average in the UK
Speaking to TheJournal.ie last year, insurers told us that the cost of paying out these claims out, as well as the expectation that some people have regarding the payout they may receive.
Insurance Ireland CEO Kevin Thomson said: “It’s fair to say that we’re at a new norm, in terms of the cost of insurance out there. If we want to tackle it, it’s the cost of awards we need to look at.”
In one recent case that took place in Dublin, a young driver now fears his premium could skyrocket after being involved in a minor crash where the driver of the other car has now claimed an injury.
John* told TheJournal.ie that it was during morning rush hour when he drove into the back of another car at a relatively low speed.
“It really was only a tip,” he said. “It was a busy city centre street at rush hour, you’re not going to be going that fast.”
He said that none of the occupants of either of the cars reported injuries at the scene, but the driver of the other car subsequently submitted a claim.
John said: “And my insurance company just said they’d pay him out straight away. I think the photos show how little the impact was.
That’s my no-claims gone now, and my insurance is up for renewal in the summer. As a young driver, my premium was high anyway. But depending on how high it goes it might force me off the road.
In regards to injury payouts, there may be some move from government in this regard, with Minister for Justice Charlie Flanagan last month asking the Chief Justice of the Supreme Court Frank Clarke for help in efforts to bring down the size of compensation awards.
The Alliance for Insurance Reform called it a “welcome development” after “months of frustration at the pace of reform on insurance costs”.
Its spokesperson Peter Boland said: “Insurers can’t have it both ways – if the volume and quantum of awards are the problem then reform must be matched with cuts to premiums.
What we have not seen from insurers is a commitment to cut premiums if necessary reforms are made. A tangible commitment on premium cuts would provide an additional impetus on the government to act.
*Names have been changed at the person’s request.
So ireland is importing millions of tonnes of soy to feed to cows to export 85% of beef and dairy produced abroad while being an overall net importer of calories and barely growing any of our own fruit and veg. Sounds a bit precarious.
@eoin fitzpatrick: zero linked up thinking.
@eoin fitzpatrick: Not true, I grew a few apples and had a great crop of rushes this year.
@eoin fitzpatrick: Lol! beautifully put. All so a handful of people can earn more profits.
What would happen to Irish milk production if all this imported feed wasn’t available?
If one was to believe the hype it’s all based on our “grass based system “. ….but grass alone won’t provide the nutrients that Irish cows need to produce the large volumes of milk the dairy industry requires …..this article highlights the shallowness behind the “grass based system” propaganda that the Irish public consistently hear from the dairy industry in this country…
@Padraig G: It is grass based as you call it. The bulk of what cattle eat is grass, be it fresh during the summer or preserved during the winter. But dried and fermented grass (hay and silage) during the winter does not provide everything. This is when animal feeds are used. After all, milk production runs 12 months a year, and proper fresh grass is only available for half that.
@Padraig G: BTW, I forgot to say, Maize and Barley, along with all the other cereals, are types of grass.
@Joe x: thanks for your feedback but most dairy farms I visit provide meal to their cows 12 months of the year….but your missing the point of the article, Ireland’s high intensity dairy model is totally reliant on overseas animal feed….there is no way the average dairy farm in Ireland could sustain the level of milk production we have at present on grass alone …Look at the wet summer we just had , plenty of farmers were providing meal rations to keep milk yields up ….
@Padraig G: But most of the animal feeds are grass based, which is what you were contending in the first place.
To me, the point of the article has nothing to do with what the animals are being fed anyway. By highlighting it in the title and being the first section they discussed, they turned it into a climate issue when nothing is further from the truth, especially when you look at how it is transported, as much as they can fit on one ship.
The real issue is why the farming sector has taken the route it did, which is simply down to cost. The dairy and beef sectors find it cheaper, and the tillage farmers can’t let it go any cheaper. Otherwise, none of them can make a living in modern Ireland
@Padraig G: We’re not meant to drink calves milk, we don’t have 4 stomachs.
I wonder if there is any mention in the article of the restrictions placed on beef farmers. An animal has to killed before it is 24 months otherwise there are big penalties. The beef barron and the factories have access to all the farmer data. The know how many animals are in the country and what age they are. Now if you want to have a beef animal factory fit for 24 months you have to feed grains. There is no alternative and yet farmers want the 24 month rule lifted and its not. It was bought in during the BSE scare back in the 2000s. The rule makes the factories richer and bad for the environment because we have to import feed. What is the difference between 24month and 34 month beef. There is no difference. Beef in Ireland is a monopoly. The same animal in the UK makes €400 per head more than in Ireland. Our farmers are being robbed by the processors and the only profitable sector left is milk.
@Washpenrebel: my point is that its not financially possible to finish our beef of just a grass based diet because the rules in place. Man made rules that are worse for the environment.
Funny how the first thing they concentrated on was the carbon footprint of importing the feed instead of asking why so much is being imported and not grown locally. Stating that it could be grown at home is stating the obvious, after all cereals have been grown on this island for hundreds, if not thousands, of years. The problem is cost for both dairy farmers to buy it local as it is cheaper to buy it in, so that they can have a living wage and tillage farmers to sell it local as animal feed as they cannot afford to sell it any cheaper, otherwise they will not have a living wage either. It’s the cost of things in this country that affect everything else as usual. .
Give the farmers a break and treat them as if they were Data centers or even better the Aviation industry whose emissions are also overlooked as they are not considered in our national emissions targets.
Great article and FOI providing a great service to inform the public to make their choices. Our dairy cows are fed too much imported meal despite not yielding very much. Denmark produces 2/3 as much milk with 0.5m cows as we do with 1.7m cows. The answer is obvious.
@john mounsey: do you know that Ireland is one of if not the best place for milk in the world. We have some of the toughest restrictions in place which is why we produce a huge amount of the world’s baby milk. Grass is key to top quality milk and we grow grass better than anywhere else in the world. Its something we should be proud of but we have a group of people that love hammering farmers who work on average 14 to 18 hours a day.
@Washpenrebel: Our infant formula exports are dropping, was 620m euros to China in 2017, dropped to 266m last year. Hence poor milk proce for dairy farmers here.
@john mounsey: Dairy farmers all over the world are suffering because of the prices. There are many farmers in the leaving because its not paying enough. Same in Australia. Governments all over the world are making it harder for farmers and there will be a food shortage in the future. This is guaranteed. We live in the age of the internet and we can see what’s happening in other countries
@Washpenrebel: Its not the ‘player’ it’s the game.
Humanity, for what it is worth, is foolish in a particular way.
Climate is far too technical for most people, so retreating to the Earth science of biology is perhaps the best course to undo considerable damage to research by scientific method modelling.
Origin of Species attempted to use prejudice as a means to control perspectives of humans and who constitutes the title of superior and inferior ‘races’.
Just like carbon footprint, carbon emissions or some other buzzwords, natural selection/eugenics was once a major topic in society and found its full implementation in WWII as the Holocaust.
People are so distracted with the symptoms of modelling that they hardly are aware that scientific method modelling is the only issue.
So people with stature to deal with a serious topic just do not exist, and that is no insult but stated with deep dismay.
People want to consume dairy products and Ireland is one of the most climate friendly countries in the world to do this.
It is nonsense to say by supposed academic leaders that we should participate in solving this global problem by exporting dairy production to much less climate efficient countries.
The media climate B/S never ends,
Lovely emissions heavy feed, the best kind of feed
have your say