Price gouging goes on as profits of car insurers continue to tower over falls in premiums
- Motor insurance premiums up 35% between 2009 & 2019 with claims cost per policy falling 9% in same period.
- 10% rise in operating profits in 2019 compares unfavourably to average earned premium fall of 4% for consumers.
- Questions need to be asked about whether consumers have been ‘systematically fleeced’.
Reacting to the publication of the Central Bank’s Private Motor Insurance Report 2 today, Labour’s Finance spokesperson Ged Nash TD criticised the industry for ‘price gouging’, as the report showed that between 2009 and 2019 motor premiums went up by 35%, with the cost of claims per policy falling by 9%. The report also showed a 10% increase in operating profits for insurers in 2019, compared to an average fall in premiums for consumers of only 4%.
This report comes in the wake of September’s damning preliminary report from the Competition & Consumer Protection Commission (CCPC) which alleges that ‘price signalling’ and other anti-competitive practices were evident among seven insurance industry entities in this country over a 21 month period between 2015 and 2016.
Deputy Nash said:
“The insurance industry has been blaming its massive hike in premiums on what is said were the increasing cost of claims. This report exposes that as false. The cost of claims per policy actually fell by 9% between 2009 and 2019, while premiums were hiked by 35% in the same period.
“This important report also shows that while average premiums fell by 4% last year, operating profits rose to 10% of total income in 2019.”
“While any reduction in the burden for ordinary motorists is to be welcomed this small drop in premiums needs to be viewed in the context of the monumental price gouging this notorious industry has been engaged in for many years.
“Questions need to be asked about what is going on in this industry, as this is either a totally dysfunctional market, or else consumers have been systematically fleeced. Insurance costs for consumers in Ireland continue to be out of kilter with other EU states. Urgent action and reform is needed to support businesses and consumers who are sick and tired of the ongoing rip-off when it comes to the crippling cost of motor insurance cover.”