Government accused of failing to hold insurance industry to account
Sinn Fein’s Pearse Doherty said statistics exposed the ‘spin and blatant lies’ from the insurance industry.
The government has been accused of refusing to hold the insurance industry to account and “peddling their spin” after a damning report revealed that premiums rose by 42% over nine years.
The comprehensive report from the Central Bank throws doubt on claims by the industry that higher cost of car insurance was due to an increase in claims and spiralling pay-outs.
Sinn Fein’s Pearse Doherty said the data exposed the “spin and blatant lies” from the insurance industry and accused both Leo Varadkar and Micheal Martin of peddling the spin.
Mr Doherty urged Mr Varadkar to “stop swallowing the guff of the industry”.
The Taoiseach rejected claims he has been soft on the insurance and legal industry, saying the government has attempted to reduce the cost of insurance.
The report revealed the average cost of claims per policy decreased by 2.5% from 437 euro (£370) in 2009 to 426 euro (£361) in 2018.
Between 2009 and 2013, claims costs reduced by 14% to 375 euro (£318) followed by an increase of 14% to 426 euro in 2018.
However, the average premium per policy increased by 42% from 498 euro (£422) in 2009 to 706 euro (£599) in 2018.
During leaders’ questions, Mr Martin said the Central Bank’s report revealed a “shocking story of continuous rip-off” of the people of Ireland, particularly young people.
“It’s also a damning indictment of government’s weakness, paralysis and failure to protect people from a greedy and exploitative industry and the government’s inability to change the story over the last eight years,” he added.
It appears that insurers underpriced in the early part of this decade and then increased premiums beyond levels that were needed to cover losses incurred, and consequently are now making significant profits Leo Varadkar
“At times, the government seem to side with the industry and accept its explanations.”
Mr Varadkar said the government’s objective is to ensure that the cost of insurance decreases.
He added: “I believe the report shows that both the insurance and the legal sectors have a role to play and questions to answer with regard to the difficulties we have faced in the last number of years when it comes to the cost of car insurance.
“It appears that insurers underpriced in the early part of this decade and then increased premiums beyond levels that were needed to cover losses incurred, and consequently are now making significant profits.”
Mr Varadkar stated that the Judicial Council, which comes into existence on Tuesday, will look at the level of claims and awards that are being made by the Irish courts.
— Pearse Doherty (@PearseDoherty) December 17, 2019
Last month, while Micheál Martin and FF were peddling the spin of the insurance industry, I was challenging them on ripping off customers despite falling claims. SF will always stand up to corporate interests. FF & FG stand up for them. Have a watch #EndtheInsuranceRipOff https://t.co/n4EvDoIlgl
It also recently emerged that insurance provider Ironshore Europe, one of the biggest insurers in the childcare sector, is leaving the Irish market.
Mr Doherty told the Dail that Ireland is left with only one insurance company, which he said is asking some childcare providers for around triple the amount that they paid previously.
He said that one childcare facility’s insurance will go up to to 5,000 euro (£4,245) from 1,800 euro (£1,428).
Mr Doherty said: “They simply don’t have the money, they don’t know what to do when they close the doors on Friday. Where do they find the money and will they be able to reopen in January and what happens to the 80 children who they provide care for.
“The government have done nothing in relation to this.”
Mr Varadkar said he is aware of parents’ concern and that the Department of Children is engaging with the sector.