Central Bank probe into Insurance Industry must be speeded up
- Initial findings of Central Bank investigation into insurance industry deeply troubling.
- Central Bank must clarify if all insurance firms are fully cooperating with their investigation.
- Central Bank finding that insurance companies are not putting their customers first points to deep cultural problems in the industry.
Labour Party spokesperson on Finance Ged Nash TD has said the Central Bank’s probe into ‘dual pricing’ practices in the insurance industry must be stepped up and completed early, given the seriousness of the implications for consumers. He also called on the Central Bank to clarify if all insurers are co-operating fully with the investigation.
The practice of differential pricing typically sees motor and home insurance customers with a similar risk profile being charged different premiums by taking into account factors such as how likely a customer is to auto-renew their insurance. The UK’s Financial Conduct Authority released a report on the practice last year, and found that the practice was not serving customers well as firms use complex pricing practices that allow them to raise prices for consumers that renew with them year on year.
Commenting on today’s interim report from the Central Bank, Deputy Nash said;
“This report is deeply concerning as dual pricing is hammering customers who may have let their policy roll over to renew automatically, particularly older customers. This is an exploitative practice which perversely involves longstanding customers being slapped with a loyalty premium. We need to stop this rip-off of customers by insurers.”
“Despite the claims that the industry does not engage in this practice, the first phase of the Central Bank probe has shown that the insurance sector has been caught red-handed. The investigation’s finding that a number of firms ‘maintain’ that they do not use the practice, but the Central Bank finding the opposite, is also deeply troubling.
“The Central Bank needs to clarify if it is getting full co-operation from these insurance companies with its investigation. The reports finding on the culture of the insurance industry, where consumers interests are not being put first, is also deeply alarming.
“The curtain must be brought down on this unfair practice and the consumer must come first. Given the evidence obtained so far by the Central Bank, their investigation must be speeded up and concluded as a matter of urgency.”