Have Motor Premiums Peaked?
I would love if the answer was yes, but there is no evidence to support that theory, especially after the Central Bank recently released the official 2015 figures for motor insurance. Following on from losses of €253 Million in 2013 and €220 Million in 2014, it was anticipated that 2015 would have shown an improvement, but unfortunately this was not the case and the losses came in at a whopping €273 Million, with over €1 Billion paid out on claims. This is not an opinion. These are the realistic facts!
To put it in layman’s terms, the Industry paid out, on average, €125 for every €100 taken in. That is unsustainable! On top of this Insurers are getting less than 1% on monies put away on deposit for claims, whereas ten years ago, they were getting 10%.
We now have a very litigious society in Ireland and if the awards keep increasing, then so too will the premiums. For most of us, who have not claimed, this looks totally dysfunctional. Who or What is going to stop the rot? Solicitors are further rejecting the Injuries Board awards and more and more cases are going to higher courts, which mean more costs per accident.
The much awaited Book of Quantum might stabilise awards, that are already too high, that is of course if Judges would abide by the new book! They did not abide by the last book, in recent times, and the whole thing did become unworkable.
A number of insurers have ‘Gone to the Wall’ including Quinn, Setanta and Enterprise. Other brands have just disappeared including No Nonsense and Tesco Financial. Catlin just pulled out and Zenith Insurance Company is ceasing to write new motor business in Ireland in two months, leaving the consumer with less choice and reduced capacity. Coupled with this, Insurers have invested heavily in computer software that will analyse risk, based on behaviour, like driving without an NCT or driving without your car taxed for a few months.
Fraud and Uninsured driving are on the increase, with staged accidents topping the agenda. One of the biggest ‘fraud rings’ was busted by Garda detectives last year, just a few miles up the old Kilbeheny road. So, it’s right on our doorstep and not just a big city problem! We need ZERO Tolerance on Fraud and Un-insured driving. We are being viewed by EU insurers as a ‘basket case’ and plans for Brexit are not helping.
There is some light at the end of the tunnel with an Oireachtas enquiry about to deliver its findings to the Minister for Finance and the Cabinet, before the Christmas recess. The last time this happened, the resulting set up of the Personal Injuries Board, with the curbing of Legal cases and their resultant costs, did achieve the required solution of lowering premiums.
Insurers hate UNCERTAINTY and that is something we have buckets of at the moment. That is not good news for the hard pressed motorist. The Large Insurers are ‘cherry-picking’ the best risks – *Over 30, *Full licences, *No penalty Points, *Insured and Partner, *Newer cars and *Low Mileage, but that is only half the motoring public. That is why we need the new Niche insurers to come in and insurer the older cars and those whose record may not be 100%, like me.
The GOOD NEWS is that three new players have already confirmed they are coming into Ireland in 2017, and we expect three more to be announced shortly. All these can only be accessed via a Broker so don’t forget to shop around! At times like this, it is too easy to go for the Cheapest Premium, but my advice is; to Shop around and get the cover you want at the best price available.
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