Motorists paying more as insurance company profits soar
The data shows that during 2013 to 2018, premiums were up 62% while claims cost were only 14% higher
Tuesday, October 13, 2020
Analysis of the Central Bank of Ireland’s National Claims Information Database (NCID) on the motor insurance market, by the Alliance for Insurance Reform, has painted a picture of soaring insurance company profits and rocketing broker commissions and legal fees, all while hard pressed motorists are asked to pay ever higher premiums.
The Sunday Business Post reported on the analysis which related to 2018, the most recent year for which figures are available. During this year, motorists paid out €1.32 billion in premiums and the split on how this money was allocated makes concerning reading.
Around 40% of premiums was paid out in compensation at some €580 million. A large proportion of this would be accounted for by personal injury claims, as well as vehicle repair and associated costs. The insurance companies reported €128.84 million in profits for the year. The figures also indicate that brokers earned €120 million in commissions and legal fees totalling €130.3 million.
The bulk of the difference is then made up of management expenses totalling €140.3 million and “reinsurance costs” at €139.79 million.
The National Claims Information Database, also shows that while insurers made healthy profits, the cost of motor premiums per policy rose by 42% between 2009 and 2018 despite a 2.5% fall in the cost of claims. The data shows that more recently during 2013 to 2018, premiums were up 62% while claims cost were only 14% higher.
Peter Boland, the director of the Alliance for Insurance Reform believes the figures clearly show that they do not support the insurance industry’s assertion, that motor premiums have to continue to increase as a result of rising claims costs. He told the Sunday Business Post, “What it clearly illustrates, is that insurers have done very well out of motor insurance in the last ten years, despite their protestations.”