FIVE INSURERS HAVE committed to giving customers relief on car insurance premiums, after calls were made to do so now that people are restricted where they can drive to.
This could be a refund or discount, the insurance companies have said.
Allianz, AXA, FBD, RSA and Zurich have agreed to give this ‘relief’, but said it will vary from insurer to insurer based on their customers and and the company’s “different claims experience”.
The group said that they were offering the relief “to reflect an expected lower volume of claims due to the travel restrictions imposed during Covid-19 crisis”.
This comes after a number of calls were made for the insurance company to offer discounts to customers – including from the Minister for Finance Paschal Donohoe.
In a statement last Friday, 17 April, Donohoe said after a meeting with Insurance Ireland, that he was “concerned” regarding the response of insurers to the Covid-19 crisis.
He called on motor insurers to be “pro-active and generous” in relation to their treatment of motor insurance policyholders.
In relation to the treatment of motor insurance policyholders, I pointed out that a combination of the very profitable part of this market over the last 12 months, when combined with what is likely to be a significant reduction in claims for this period, provides a strong case for some type of refund of consumers motor premium package.
Following today’s announcement, Minister Donohoe called on individual insurers to “quickly come forward with information on the scale of likely premium refunds”.
“This is an important step by the sector and I also appreciate that these insurers will keep the matter under review to see how best they can serve the needs of their customers.
Obviously it is for each insurer to look at its own situation and customer base, but I stress the importance for them to take a longer term perspective and be generous with their customers at this time reflecting the recent profitability of the motor insurance market.
The group of five insurers said in a statement today:
“The financial supports, such as refunds or discounts, applied by each insurance company will reflect their individual claims experience to date.
If extended Covid-19 restrictions on movement result in sustained lower road usage and claims frequency through the summer and beyond, insurers have agreed to further review the situation.
“Given the different pricing models and different customer profile of each insurer’s book, the precise amounts will vary across the market.
“Each insurer will independently calculate the detail of discounts/rebates involved and communicate with its customers in the coming weeks.”
Moyagh Murdock, CEO of Insurance Ireland, said: “We are now six weeks into the Covid-19 restrictions on movement and it is clear that road usage levels have fallen significantly.
She said that insurers were recognising “the unique challenges” in the Irish market by “signing up to a set of core principles”, which are mentioned above.
Murdock said that “this is good news for Irish motor insurance customers”.
“[It] comes following the introduction of a number of other supportive customer measures from Irish insurers spanning motor, home, business and health insurance.
“Irish insurers understand that many customers are experiencing difficulties related to the Covid-19 crisis and are keen to assist wherever they can,” she said.
Cathie Shannon of Brokers Ireland, which represents 1,250 Broker firms, said the measures were based on a “compelling logic”:
“Insurance premiums are based on the level of risk posed and the anticipated level of claims, with the cost of claims being the most significant cost incurred by motor insurers.
“The announcement will come as a great relief to motorists struggling to manage their financial affairs, many with a great deal of uncertainty about what the future holds.
“This is a situation shared by many SME Brokers throughout the country at this difficult time, as they too are grappling with the economic difficulties associated with COVID-19,” she said.
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