– Average cost to insurance industry per motor policy has been falling since 2008 –
Figures released by the Central Bank this morning contradict assertions by the Insurance industry that spiralling motor insurance premiums in recent years can be put down to the increasing cost and frequency of claims.
Fianna Fáil Spokesperson on Finance Troy was commenting on the publication this morning by the Central Bank of the Private Motor Insurance Statistics for 2015.
Deputy Troy commented, “The report published by the Central Bank today is based on data submitted by Insurance Ireland on behalf of its members. The report claims that average premiums for comprehensive cover rose by 9% in 2015, while third party fire & theft premiums increased by 19%. However, the official CSO Consumer Price Index shows that motor insurance premiums increased by a whopping 30.8% in 2015. This enormous discrepancy calls into question the validity of the data submitted by the industry.
“As to the reason why premiums have increased dramatically in recent years, the central message from the insurance industry has consistently been that it is all about the number and cost of claims. While today’s report does show that the average cost of year 1 claims for comprehensive policies increased by 10% in 2015 (and 11% for third party fire & theft), the report also shows that claim frequency has actually been trending downwards since 2008 and fell again in 2015.
“Crucially, today’s report shows that the average cost per policy to the industry – combining cost per claim and claim frequency – actually fell in 2015 by 4% in the case of comprehensive policies and 6% for third party fire & theft policies. The large claims rate also fell in 2015. These statistics do not support the industry’s core message that the number and cost of claims are responsible for rising insurance premiums. Significantly, according to a recent PQ I received, gross written premiums exceeded gross claims paid across the industry by a higher amount in 2015 than during any other recent year.
“Since it is clear the industry’s claims to do not stand up to scrutiny, the Government needs to accelerate implementation of the recommendations of the Cost of Insurance Working Group, particularly around the compilation of a national claims database so that we can get a proper handle on the data for once and for all.”