Fianna Fáil Spokesperson on Finance, Robert Troy, says figures released by the Central Bank last Friday morning (July 21 ) contradict assertions by the insurance industry that spiralling motor insurance premiums can be put down to the increasing cost and frequency of claims.
Deputy Troy was commenting on the publication by the Central Bank of the Private Motor Insurance Statistics for 2015.
“The report published by the Central Bank today is based on data submitted by Insurance Ireland on behalf of its members,” he said. “The report claims that average premiums for comprehensive cover rose by 9 per cent in 2015, while third party fire and theft premiums increased by 19 per cent. However, the official CSO Consumer Price Index shows that motor insurance premiums increased by a whopping 30.8 per cent in 2015. This enormous discrepancy calls into question the validity of the data submitted by the industry.
“As to the reason why premiums have increased dramatically in recent years, the central message from the insurance industry has consistently been that it is all about the number and cost of claims. While today’s report does show that the average cost of year one claims for comprehensive policies increased by 10 per cent in 2015, and 11 per cent for third party fire and theft, the report also shows that claim frequency has actually been trending downwards since 2008 and fell again in 2015.”
The report shows that the average cost per policy to the industry – combining cost per claim and claim frequency – actually fell in 2015 by 4 per cent in the case of comprehensive policies and 6 per cent for third party fire and theft policies. The large claims rate also fell in 2015.
“These statistics do not support the industry’s core message that the number and cost of claims are responsible for rising insurance premiums,” Deputy Troy said. “Significantly, according to a recent PQ I received, gross written premiums exceeded gross claims paid across the industry by a higher amount in 2015 than during any other recent year.
“Since it is clear the industry’s claims to do not stand up to scrutiny, the Government needs to accelerate implementation of the recommendations of the Cost of Insurance Working Group, particularly around the compilation of a national claims database so that we can get a proper handle on the data once and for all.”