The Irish Independent is reporting that Ireland’s compensation culture will continue to force car-insurance premiums up this year, but the pace of increases – which saw prices soar last year – has moderated.
In the Irish Independent article, FBD chief executive Fiona Muldoon declined to predict by how much car-insurance premiums would be hiked by the stockmarket-listed insurance company this year.
The Competition and Consumer Protection Commission is investigating suspected breaches of competition law in the motor-insurance sector. It relates to firms openly signalling upcoming increases in motor insurance premiums.
FBD – which yesterday released full-year results that saw the company return to the black with a €3.2m underwriting profit (it last made a full-year profit in 2013 and an underwriting loss in 2015 of €125.4m) – said that it hiked motor insurance premiums by an average of 16pc last year.
Just over 24pc of the €361.8m in gross written premiums generated by FBD last year were for motor insurance. Total gross premiums were down from €363.2m in 2015.
Many motorists felt the brunt of huge increases – often as high as 50pc or more – in their premiums last year.
“Our long-term sustainability is driven by making a profit and being capital accretive,” Ms Muldoon told the Irish Independent.
Just over 24pc of the €361.8m in gross written premiums generated by FBD last year were for motor insurance. Total gross premiums were down from €363.2m in 2015.
Many motorists felt the brunt of huge increases – often as high as 50pc or more – in their premiums last year.
“Our long-term sustainability is driven by making a profit and being capital accretive,” Ms Muldoon told the Irish Independent.
“For as long as claims are rising, and we’re facing increasing costs, we have to cover those costs. We’ve said they’re stabilising, and not increasing by as much as they were.”
Last month, a Government working group appointed to tackle rising insurance premiums published 33 recommendations and 71 associated actions that it said needed to be implemented to rein in charges.
Among them was the establishment of a Personal Injuries Commission to provide “enhanced guidance” for determining compensation for personal injury claims. It also called for automatic number plate recognition technology to enable Gardai to detect uninsured drivers.
“There’s an awful lot of good sense in that report,” said Ms Muldoon, who argued that 71 action points was excessive. “You can’t do 71 things well at the same time, so we’re calling for a focus on the things where there will be the biggest payback.”
She said the priorities should include strengthening the Injuries Board, tackling non-cooperation, and benchmarking awards here with what is happening internationally.
“That’s only going to show that our awards are higher here than they are elsewhere,” she said.
Ms Muldoon said despite High Court awards in personal injury cases having moderated somewhat, more claimants are hiring lawyers at an earlier stage in their claims process. That adds to the overall claims costs.
She added that the new so-called ‘Book of Quantum’, an Injuries Board publication that provides guidelines on the amounts that can be awarded in personal injuries cases, appears to have increased award levels by about 5pc.
“It’s still an inflationary claims environment,” she said. “We’re seeking to make a profit, like any business, and for the long-term sustainability of FBD we have to make sure that our premiums cover our costs. It’s to everybody’s advantage to get costs down.”
FBD’s total profit in 2016 was €11.4m, which included a one-off, €7m pension-related gain.