Insurance in Europe

Skyfarm

With the cost of insurance in the news daily,i was thinking about the cost in different part of the EU.

As part of the fine institution that is the E.U why can't we get insurance in say England? isn't it part of the free borders that allows trade?

and if we can't then why not? surely its one way to lower the clamp that insurance companies have on Drivers .

there's a case to be made for it i think.

Liam McPoyle

Skyfarm wrote: »

With the cost of insurance in the news daily,i was thinking about the cost in different part of the EU.

As part of the fine institution that is the E.U why can't we get insurance in say England? isn't it part of the free borders that allows trade?

and if we can't then why not? surely its one way to lower the clamp that insurance companies have on Drivers .

there's a case to be made for it i think.

There is nothing to stop EU insurers opening an office in Ireland.

So if nothing is stopping them from a legislative point of view, why aren't they?

Some folk would have you believe that the motor insurance market in Ireland is a cash cow and that companies are making massive profits but screwing their customers.

So ask your self, what do you think is most likely.

That insurance companies are making big profits?

If there is money to be made, and no barriers to their entry one would think companies would be tripping over themselves to set up shop, right?

Or is it a case that the Irish insurance market is currently toxic with most companies making substantial underwriting losses?

There have been no real entries into the market since Setanta. They went bust due to the level of claims they had versus the money they were taking in. Their prices were €300 to €400 on average per policy. And they went bankrupt because they couldn't cover their claims. They had only been in the market a couple of years and couldn't remain viable.

So money to be made or no money to be made, pretty clear cut to me anyway.

Skyfarm

Saul T Nutzz wrote: »

There is nothing to stop EU insurers opening an office in Ireland.

So if nothing is stopping them from a legislative point of view, why aren't they?

Some folk would have you believe that the motor insurance market in Ireland is a cash cow and that companies are making massive profits but screwing their customers.

So ask your self, what do you think is most likely.

That insurance companies are making big profits?

If there is money to be made, and no barriers to their entry one would think companies would be tripping over themselves to set up shop, right?

Or is it a case that the Irish insurance market is currently toxic with most companies making substantial underwriting losses?

There have been no real entries into the market since Setanta. They went bust due to the level of claims they had versus the money they were taking in. Their prices were €300 to €400 on average per policy. And they went bankrupt because they couldn't cover their claims. They had only been in the market a couple of years and couldn't remain viable.

So money to be made or no money to be made, pretty clear cut to me anyway.

great points, but not what i asked, i asked about us going to Europe to buy or look for insurance,nothing about profits or a breakdown of the business model

The J Stands for Jay

Skyfarm wrote: »

great points, but not what i asked, i asked about us going to Europe to buy or look for insurance,nothing about profits or a breakdown of the business model

The point was, why would anyone sell you insurance when your car will brush up against another and they'll have to pay 97 million to some guy for a sore neck plus pay for his team of solicitors and barristers. Not worth the risk to get €600 a year from you.

Sue Pa Key Pa

We're the insurance basket case of Europe. Nobody is interested in offering cover to Irish motorists

Peregrinus

Skyfarm wrote: »

great points, but not what i asked, i asked about us going to Europe to buy or look for insurance,nothing about profits or a breakdown of the business model

In principle there's nothing to stop an insurer based in (say) Italy writing a motor insurance policy for an Irish resident. In practice few or no insurers are interested in writing such policies.

There's a couple of factors at work here. One is that different countries still have different laws regarding the scope and level of mandatory motor insurance, so that a policy which satisfies (say) Italian requirements isn't necessarily going to satisfy Irish requirements, or vice versa. To justify investigating local conditions and requirements and writing a policy to meet them requires the insurer to be doing a critical mass of business in Ireland, which in turn won't happen unless there is a marketing effort and a distribution chain in Ireland.

Plus, set-up costs aside, once you treat Irish business as a separate line of business, you need to maintain a large enough pool of Irish policies to run reserves to meet your obligations under your Irish business.

In other words, to enter this market at all (or any national insurance market) and to remain in it, you have to make a significant commitment to it. No insurer will write just one Irish policy, or just a dozen or fifty Irish policies. You need thousands. If you decide you want to enter the Irish market, the easiest way to do it is to buy an existing insurer operating in that market; that way, you have the critical mass you need from day one. If you're not going to do it that way - e.g. no existing insurer is for sale at a price you are willing to pay - then you need to make a large up-front investment to ensure that you will build your business up to the required level in a fairly short time-frame.

You'll do that, of course, if there are excess profits to be made in the market. There are no barriers to entry which would prevent an EU insurer writing Irish business. But, as already pointed out, there isn't much interest in doing so. Ireland doesn't offer excess profits, and as a market returning more typical profit margins, it's too small to interest most of the European insurers.