05 May 2017

Rises in motor insurance premiums could be coming to an end

Filed under: Business News

Hopes that the rises in motor insurance premiums could be coming to an end have been sparked.

It comes after one of the largest insurers said ts premium income fell by 10pc in the first three months of the year.

RSA said it earned €52.57 in motor premiums in the first quarter, down 10pc in euro terms on the same period last year. There was little other detail provided by the London-headquartered group on whether the fall in premium income was due to lower pricing or a fall in sales.

But experts said this points to a stabilising of the cost of motor insurance.
Analyst at Davy Stockbrokers Emer Lang said in a note to investors: “The pricing environment appears to be stabilising.”

The most recent figures from the Central Statistics Office show there has been no monthly increase in the cost of motor insurance for the third month in a row.

The CSO said there was no rise in motor premiums again in March. The monthly cost of premiums was flat in February and January also.
But the surges in the cost of cover over the last few years have seen premium rates shoot up by 60pc on average since 2010, additional information from the CSO indicates.

At one stage last summer premiums were rising at a rate of close to 40pc.
The average motor premium is now €478, according to calculations based on Central Bank data.

Junior Minister Eoghan Murphy, who is overseeing measures to reduce motor premiums costs, said there were early signs cover costs may stop rising.
In an update on how measures to contain premium rises are progressing, Mr Murphy said price rises have eased off.

“It should be noted that the latest data from the Central Statistics Office indicates that there has been no month-on-month increase in the cost of motor insurance during the first three months of this year.

“If this trend continues, I am hopeful that it might be signalling the start of a stabilisation of pricing in the market as the actions continue to be implemented over the next 18 months,” the minister said.

Mr Murphy chairs the Cost of Insurance Working Group — a cross-department panel that has listed 33 actions to reform the industry.

Fianna Fáil finance spokesman Michael McGrath said that providing an update on how the Government has failed to deal with the motor insurance crisis is cold comfort to motorists who are seeing their premiums continuing to rise.
Deputy McGrath said the Cost of Motor Insurance working group should have been put in place earlier.
“It took a further six months, until January 2017, for the Government to bring forward their plan to tackle the issue.
“However, too many of the recommendations are not planned or expected to be implemented for a number of months and even into 2018.
“Despite no discernible increase in the national average premium, the fact remains that there are still too many people being asked to pay more and more for their motor insurance, with increases of 30pc or 40pc in premium costs being reported to me as late as last week.
“The Government need to get their priorities right, and urgently work to complete all the recommendations as quickly as possible and not wait until later this year or 2018,” concluded McGrath.

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