INSURANCE COSTS ARE squeezing incomes and crippling business.
Spiralling premium increases are forcing businesses to close, hitting jobs and hurting communities. For motorists, extortionate premiums are eating into their pay packets.
For many, insurance cover is not a choice but a legal requirement. People need it to drive to work, visit relatives in hospital and leave their children to school. Insurance is a market that delivers social outcomes, not just consumer outcomes.
That is why it is so important that the insurance industry is challenged and insurance costs are reduced.
For years I have been calling out the industry for price-gouging consumers with rip-off premiums while challenging their aggressive PR campaign of claims and fraud.
I have engaged with hundreds of people from across the country who have been victims of price discrimination, or dual pricing, by their insurance companies.
This is where insurers are using big data and personal information to charge loyal and vulnerable groups with artificially high premiums in the expectation they won’t ask any questions.
It is banned in several states in the US and is under investigation in Britain. Irish consumers deserve no less. That is why I submitted a complaint to the Central Bank in September asking that the practice be investigated. They have since agreed to do so.
I have challenged insurance companies in the Finance Committee on the prices faced by their customers, and the claim that they only rip us off because Ireland is infected with a “compo-culture” that gives them no choice but to hike up our premiums.
Luckily for the insurance industry, they have had the Government, Fianna Fáil and some in the media to pedal their lines.
Today’s publication by the Central Bank of the National Claims Information Database sets out the facts in black and white. Its findings are a definitive rebuke of the industry’s spin, and a damning indictment of the Government and others who have failed to hold them to account.
It also vindicates the pressure that we in Sinn Féin have applied to the industry, despite the intensive disinformation campaign they have waged.
Let’s deal with facts
Since 2009, the cost of claims per insurance policy has gone down by over 2%. At the same time, the average motor insurance premium has gone up by a staggering 42%.
In fact, since 2009, the total number of claims made has gone down by 42%, with injury claims made falling by 20%.
Of course, the data does show that the average cost of a personal injury claim has increased. That is an issue that must be addressed and that is precisely why Sinn Féin facilitated the passage of the Judicial Council Act, which will control the average cost of personal injury awards. But this is a problem with the cost of individual claims, not the prevalence of claims made.
The data confirms two things. Firstly, Ireland does not suffer from some sort of delinquent “compo-culture”. The frequency of claims has fallen by 40% in the past decade, with the cost of claims per policy falling by 3%.
What we have is an insurance industry that is marked by a “rip-off culture” and by an aggressive PR strategy to hide it.
Secondly, motor insurance premiums have sky-rocketed with little correlation between them and the cost of claims. Since 2013, premiums have gone up by 62%, increasing every year.
On 13 November in the Dáil, when I challenged the Government on the practices of the industry, Minister D’Arcy claimed that the average motor insurance costs had fallen from their peak. The facts tell a different story.
The Central Bank report also recorded an operating profit of 9% for the industry last year. It is worth noting that in Britain, the insurance companies enjoyed profits of 5.7%, the highest for several years. Despite what they say, Irish insurance companies are doing well, enjoying peak profits, and doing so at our expense.
Real reform
Sky-high premiums aren’t covering the cost of a “compo-culture”. They are servicing the industry’s profits, with shareholders enjoying the pay-outs.
For too long the Government, Fianna Fáil and sections of the media have regurgitated the industry’s lines. Their lines fly in the face of the facts.
What is required now is action, and the political will to stand up for consumers and stand up to corporate interests. The insurance industry is at peak profitability. It must commit to bringing premiums down.
That pressure will be brought to bear by Sinn Féin, but it must be applied by customers also. Challenge your insurer when you receive your renewal, demand a fair price.
On Wednesday, Sinn Féin’s Consumer Insurance Contracts Bill will be before the Dáíl. If parties agree, it will become law.
This is crucial legislation that would shift the balance of power towards the consumer and away from the industry; making it harder for companies to wriggle out of paying customers for valid claims, requiring them to give customers the past five years of premiums paid and claims made when they renew, and requiring them to inform customers of any claim made against their policy. It would do much else besides.
This is crucial legislation that Sinn Féin has brought forward to strengthen the hand of consumers.
We must also stamp out the practice dual pricing by the industry, which uses big data to target loyal customers and charge them artificially high premiums.
Today’s report has revealed an industry that prioritises its profits above its customers, and a Government that has failed to hold them to account.
Sinn Féin will continue to challenge the insurance industry and the vested interests that surround, standing up for consumers by applying political pressure and pushing forward with real reform.
Pearse Doherty TD is Sinn Féin’s Spokesperson on Finance and on Public Expenditure and Reform and is a member of the Oireachtas Finance Committee and the Budgetary Oversight Committee.
To embed this post, copy the code below on your site
have your say