Lets be real here: Car Insurance in Ireland is a scam

Hellotonever

2002: https://www.irishtimes.com/news/car-insurers-made-profits-10-times-those-in-uk-1.1085438

2008: https://www.irishtimes.com/business/profits-from-car-insurance-jump-38-as-claims-decline-1.935728

2019: https://www.thejournal.ie/insurance-fraud-profits-4680884-Jun2019/

2020: https://www.thejournal.ie/car-insurance-costs-data-5252285-Nov2020/

Why is this allowed? There are ZERO government regulations against this. It doesn't matter what happens - Black swan or Antifragile events, Car insurance in Ireland is an infallible industry because there is no oversight. Its fully privatized, and the insurance companies are the de facto lawmakers in Ireland.

Esse85

How can insurance companies still be charging a similar quote to that of recent years, some even charging more, when most of us have been parked up for the last 12 months and can't travel further than 5km.
I barely did 2000km in the last 12 months due to working from home.

RobAMerc

not 1 single person outside the industry would disagree with you. I would go as far as to say ALL insurance is a scam here. Sadly our government is willing to let folks and businesses suffer at the industries hands for some reason.

Buddy Bubs

550 euro on an audi a6 last year. Renewal looked for 750. Wasn't having that so I changed insurer, dropped a load of ancillary benefits like breakdown cover and renewed for 450 for the year.

Up €300 in my renewal quote.

Not a solitary blemish on my driving record.

Comical.

suicide_circus

Buddy Bubs wrote: »

550 euro on an audi a6 last year. Renewal looked for 750. Wasn't having that so I changed insurer, dropped a load of ancillary benefits like breakdown cover and renewed for 450 for the year.

Is that fully comp?

dubrov

My renewal offer was the same as last year but dropped about 20% to 370 with AIG when I shopped around on a Passat. Fully comp as well

Banana Republic 1

Theres and add on tv (Irish channels) that shows a tree branch falling on a car. A father is celebrating a goal his young fella scored and suddenly this branch falls on his car that’s parked behind him, the add goes something like for all your emergency’s or something, is it FBD I don’t know. Anyway if that happened in real life the insurance company would say we don’t covers “acts of god”

Buddy Bubs

suicide_circus wrote: »

Is that fully comp?

Yep, with AIG. Through a broker.

El Gato De Negocios

Hellotonever wrote: »

2002: https://www.irishtimes.com/news/car-insurers-made-profits-10-times-those-in-uk-1.1085438

2008: https://www.irishtimes.com/business/profits-from-car-insurance-jump-38-as-claims-decline-1.935728

2019: https://www.thejournal.ie/insurance-fraud-profits-4680884-Jun2019/

2020: https://www.thejournal.ie/car-insurance-costs-data-5252285-Nov2020/

Why is this allowed? There are ZERO government regulations against this. It doesn't matter what happens - Black swan or Antifragile events, Car insurance in Ireland is an infallible industry because there is no oversight. Its fully privatized, and the insurance companies are the de facto lawmakers in Ireland.

The insurance industry in Ireland is very heavily regulated by the CBI and the ECB. The CBI carries out regular - as in a couple of times a year each - audits of the players in the industry. Insurers are obliged to provide the CBI with evidence and rationale for what they do including their pricing models, there is full oversight of the industry from regulatory bodies.

In relation to the articles linked, if you look past the deliberately deceptive headlines.

2002

In a 17 year period, motor insurers made a combined profit of £343m.

That equates on average £20m a year between them all.

Say they are even only 10 insurers, that equals just £2m profit on average. For an industry turning over hundreds of millions a year, £2m profit is not really disproportionate, is it? Would people rather insurers made losses to keep their premiums low? Because that has happened, and Setanta went bust leaving nearly €100 worth of claims unpaid. Quinn Direct also went belly up due to not having enough money to pay claims.

There is also this little tidbit

However, compensation payments in this State are 12 times those in the UK and legal costs four times those of the UK. The report found litigation costs in Ireland added 40 per cent to every €1 paid in compensation for injury sustained in motor accidents.

Paints a bit of a different picture than the £343m headline grabber, doesn't it.


2008

Claims fell 60 per cent over the past four years and more recently some insurers had been selling insurance below the cost of the risk. He expects premiums to rise.

So claims reduced in the 4 year period to 2008 and as a result, premiums reduced. This is what is known as a soft market. Alot of insurers entered the industry with aggressive pricing strategies and were underselling policies to gain market share. 123 were very aggressive in their pricing but were not reserving their claims properly and ended up having to get a €200m bail out from their parent company. The aforementioned Setanta were also selling way too cheap which caused them to go bankrupt.

The moral here, lower claims will mean lower premiums but we will never get back to the pricing that existing from around 2005 to 2010, its just not possible.

2019

€227m operating profit across 17 companies, average profit of €13m per company. Considering they have turnover of billions, a couple of percentage points of profit is not exactly excessive, is it?

This point stands out

Addressing the issue of award levels, he said bringing the levels of personal injury damages awarded in this country more in line with those awarded in other jurisdictions “is the single most essential challenge which must be overcome if there is to be a sustainable reduction in insurance costs”.

It was proven in the mid 00s, lower claims payments means lower insurance costs, it really is that simple.

2020

Some 33% of claimants reached a litigated settlement, 85% of whom settled for less €100,000.

Those claimants received average compensation of €23,572 and incurred average legal costs of close to €15,000.

At the other end of the spectrum, 17% of claimants reached an agreement with their insurer through the Personal Injuries Assessment Board over the five-year period.

They received average compensation of €23,137 while their average legal costs were just €716.

Litigating claims gave an average extra compo of less than €500 to claimants but an average legal fees charged of more than €14,000, does it need to be spelled out what the problem is?


At the end of the day, insurers are businesses and are there to make a profit but for some reason, people take umbrage with insurers making money. Its really bizarre how they are singled out by people for criticism for running the business in a prudent manner.

There are also other factors that have to be considered.

Solvency II came into play in 2016. In simple terms, it means insurers must keep a minimum amount of money in reserve to pay claims, something in the region of 100% of their claims liabilities eg if they have €100m worth of claims on their books they must have €200m cash in reserve to cover these.

Investment income has massively dropped. Traditionally insurers were able to balance their books by investing but interest rates are at an all time low and negative in some cases so the previously available extra income has been wiped out.

While motor claims will have reduced on the back of Covid, claims for businesses forced to close due to Covid have gone through the roof, these claims will probably run into the hundreds of millions. Motor insurance does not exist in a bubble, a motor insurer will likely also be insuring commercial (business) risks so all money goes into one pot and all claims payments come out of the same pot.

Im not saying its a perfect system, I get that insurance is a "grudge" purchase because you only need it in the event of a claim but insurers are in a difficult position of trying to make a profit the same as any other business while also dealing with multiple external and uncontrollable factors like the claims environment and compensation levels paid.

But mark my words, if proper reform of compensation payments for soft tissue / unprovable injuries come in then annual premiums will reduce.

Buddy Bubs

A few years ago, an post were aggressively targeting market share and they had low prices. I went with them. Then they asked me for higher price on renewal so I moved to someone else, can't even remember who. In turn, they asked me for more on renewal so I moved....now I find myself here with AIG which is lowest I've ever paid I believe.

whippet

My insurance climbed up from about €400 per annum to last years €870 .. which was the cheapest I could find ... renewal came last week in for €930 ... a quick look online and managed to get a quote for €490 from aviva.

So for me the trend is downwards

Sparkey84

im bias ever since hibernian took over norwich union back in the early 2000's. my motorcycle quote went from €672 to €2,900 overnight and the pieces of scum that raised the price described it as a reasonable grouping realignment.

i have so much hatred for that industry i view the people involved in such unethical decisions as being akin to a common thief,
at least there is a chance of getting a conviction in the case of a burglar. its impossible to have recourse when the sub human piece of sh1t sits in an office and unfairly pressures your wallet from afar.

alchemist33

It's odd how my insurance company can take about €150 off my renewal when I've told them I've got better offers elsewhere. Almost like they said "we'll quote him a figure that makes us profit, then add €150 to it."

Sparkey84

"At the end of the day, insurers are businesses and are there to make a profit but for some reason, people take umbrage with insurers making money"

quoting afew posts above.

i don't really have a problem with them making money. for example i don't mind my bank or my house insurance company making money i have free will with those companys. car or motorcycle insurance is different. we are legally obliged to have it and we are very vulnerable because of that. if my bank increases my mortgage rate by a reasonably proportionate amount to an ECB rate rise that's fine. but i do not believe hibernian's motorcycle group payout quadrupled in 2000. even though there quote did.

crazy 88

El Gato De Negocios wrote: »

At the end of the day, insurers are businesses and are there to make a profit but for some reason, people take umbrage with insurers making money.

Comparing insurance companies to traditional "businesses"

Businesses usually provide a service once you pay for it. Motor insurance companies go out of their way NOT to provide the very service they sell. And we're forced to pay them by law if we want to drive. They have zero business ethics, as clearly shown by the OP

shtpEdthePlum

Sparkey84 wrote: »

im bias ever since hibernian took over norwich union back in the early 2000's. my motorcycle quote went from €672 to €2,900 overnight and the pieces of scum that raised the price described it as a reasonable grouping realignment.

i have so much hatred for that industry i view the people involved in such unethical decisions as being akin to a common thief,
at least there is a chance of getting a conviction in the case of a burglar. its impossible to have recourse when the sub human piece of sh1t sits in an office and unfairly pressures your wallet from afar.

Bike insurance is an absolute robbery.

crazy 88

My Aviva motor insurance came up for renewal last week. When I put my details into their quote tool online (as a new customer) it was coming up as €100 cheaper. So I asked for my renewal to match this but they kept insisting I would have to cancel my existing policy and take out a new one After much persisting, a helpful agent got it renewed at the cheaper price. I could tell there were mangers in the background pushing back though.
The next day they went and deleted my policy anyway, forcing me to take out a new one. Now that's what you call spite

KrakityJones

alchemist33 wrote: »

It's odd how my insurance company can take about €150 off my renewal when I've told them I've got better offers elsewhere. Almost like they said "we'll quote him a figure that makes us profit, then add €150 to it."

Odd is one word for it. Same story here last renewal, insurers I was with (aviva) had a massive increase on renewal, got cheaper elsewhere and told aviva I wouldn't be renewing. Straight away oh we can match that quote. Well why didn't you quote me that first time so? Went elsewhere. They don't care though as they all do the same, bump up on renewal, you'll move. Repeat next year and the year after and given there's so few insurers you'll end up back with them at some stage.

beauf

El Gato De Negocios wrote: »

The insurance industry in Ireland is very heavily regulated by the CBI and the ECB. The CBI carries out regular - as in a couple of times a year each - audits of the players in the industry. Insurers are obliged to provide the CBI with evidence and rationale for what they do including their pricing models, there is full oversight of the industry from regulatory bodies.

....

There are also other factors that have to be considered.

Solvency II came into play in 2016. In simple terms, it means insurers must keep a minimum amount of money in reserve to pay claims, something in the region of 100% of their claims liabilities eg if they have €100m worth of claims on their books they must have €200m cash in reserve to cover these.

Investment income has massively dropped. Traditionally insurers were able to balance their books by investing but interest rates are at an all time low and negative in some cases so the previously available extra income has been wiped out.

While motor claims will have reduced on the back of Covid, claims for businesses forced to close due to Covid have gone through the roof, these claims will probably run into the hundreds of millions. Motor insurance does not exist in a bubble, a motor insurer will likely also be insuring commercial (business) risks so all money goes into one pot and all claims payments come out of the same pot.

Im not saying its a perfect system, I get that insurance is a "grudge" purchase because you only need it in the event of a claim but insurers are in a difficult position of trying to make a profit the same as any other business while also dealing with multiple external and uncontrollable factors like the claims environment and compensation levels paid.

But mark my words, if proper reform of compensation payments for soft tissue / unprovable injuries come in then annual premiums will reduce.

I could be wrong but what to CBI and the ECB do in terms of how insurance companies price their products, and deal with customers. Even if its just to regulate how they are funded and capitalised, I think we can see how well that works with Quinn Insurance.

Insurance companies have a large part to play in the claims culture as they started settling claims rather than challenging them, as fast buck way of spending less on legal costs. Well that had knock on effect of exploding the claims hand in hand with legal system.

We get that they have to invest, sometimes their investments have poor returns. But there is little reflection in that and the prices charged to end customer. They've been caught out time and time again that their stories of rising cost bears no relation to the reality of those markets or what customers are charged.

Even if you ignore all of the above. That a single insurance company, can quote you enormously different prices for the same product on a single day is nuts. I've gone from can't quote you, to 3000, to 700 to free. Its just insane.

In the UK you know roughly what band of insurance a car falls into simply by the make and model etc. Here you need to know the license plate. Why because then they can track if you ring back with a different name for the same car and get a different quote.

But no Govt will take them on.

BorneTobyWilde

EU LAW

'' In principle, you can also insure your car in an EU country different from your country of residence. But remember to check if the insurance company offers international services.''


Of course people in Ireland just go local. You have the whole of Europe to obtain insurance

Balls2dWall

I do 30 k a year, 2.0 Diesel, 6 year old car, parked up in London 5 days a week, £265 , 310 euro a year, so yes Ireland insurance market is a scam.

beauf

BorneTobyWilde wrote: »

EU LAW

'' In principle, you can also insure your car in an EU country different from your country of residence. But remember to check if the insurance company offers international services.''


Of course people in Ireland just go local. You have the whole of Europe to obtain insurance

I've never found them cheaper. Perhaps because I'm probably one of the lowest risk categories. Boring git etc. I know a few who use other companies uk based etc.

astrofool

Lower pay-outs on claims, lower the legal fees associated.

Companies will then be attracted back to Ireland and insurance prices will drop.

If claim pay-outs remain high, insurance costs will remain high.

Equalising the quotes will just cost people more on average, when female drivers were "equalised" their prices just rose to match male drivers. When renewal quotes equalise, it just means the person who shops around pays more.

beauf

astrofool wrote: »

Lower pay-outs on claims, lower the legal fees associated.

Companies will then be attracted back to Ireland and insurance prices will drop.

If claim pay-outs remain high, insurance costs will remain high.

Equalising the quotes will just cost people more on average, when female drivers were "equalised" their prices just rose to match male drivers. When renewal quotes equalise, it just means the person who shops around pays more.

I suspect, it will make no difference.

https://www.thejournal.ie/readme/insurance-industry-pearse-doherty-4936369-Dec2019/

astrofool

beauf wrote: »

I suspect, it will make no difference.

https://www.thejournal.ie/readme/insurance-industry-pearse-doherty-4936369-Dec2019/

There's enough baloney in there to open a butcher shop. The only way Doherty's plan would work is if we moved to nationalised insurance where the tax payer bails everyone out (NZ has something similar). Our runaway claims and high cost legal system will keep things the way they are.

beauf

What ever about that stuff.

That the costs do not reflect the increase in premiums.