The Irish Small and Medium Enterprises Association (ISME ) has called for a full investigation of the insurance industry, similar to the Motor Insurance Advisory Board (MIAB ) process in 2002, when the industry was in crisis.
The association made the call at the Oireachtas Committee on Finance hearings, which took place on Thursday, September 8. The association reminded the committee of the work of the MIAB, whose recommendations reduced the cost of motor insurance between 2002 and 2013 by 40 per cent in real terms, according to the CSO.
However, in 2015 and into this year the cost of car insurance has risen dramatically despite there not being a major spike in accidents. The average cost of insurance has, according to CSO figures, shown an annual increase of 38.3 per cent.
Speaking at the hearing, ISME CEO, Mark Fielding, said: “Once more the insurance industry, through Insurance Ireland, give vague reasons for increases, again backed up by incomplete and obtuse statistics - this is not new. Back in 1998 to 2002 the same group were found to be less than forthright with figures, which had to be extracted painfully by the MIAB.”
“In addition, poor regulation of insurance companies regulated outside of Ireland but operating in this market, is also driving up the cost of premiums because, as of now, the legal position is that insurers must reserve against the risk of future market failures in Ireland - another excuse for hiking premiums.
“The truth is that there is no public information available in relation to overall numbers and costs of claims for personal injuries. The only figures which have been made public do not contain any information on the numbers or cost of directly settled cases. Without access to this information, a full picture of the impact on personal injury claims on insurance premiums is difficult to establish.
“The average award of the PIAB remained fairly static in the period 2009 to 2015, and the number of claims has not risen dramatically and is mainly in line with the increase in drivers and the numbers taking out car insurance. Therefore, these facts cannot be major contributory factors in driving up premiums by 38 per cent plus per annum.
“Once more we come to the conclusion that without adequate and reliable figures from the insurance industry we cannot accept their assertions as to the causes for the increases.”