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Car policy increase helps insurance firms cut losses by 50pc !!

  • 30-12-2002 9:57am
    #1
    gurramok
    Closed Accounts Posts: 13,992 ✭✭✭✭


    From Irish Independent today at Unison (reg required here)

    MOTOR insurance companies have cut their losses in half by increasing premiums, the annual insurance industry report has revealed.


    Despite claims insurers are facing more difficult times as a result of the increasing cost of claims, their losses actually fell by nearly 50pc from €323m in 2000 to €186m in 2001.


    Claims amounting to more than €1bn were paid out last year while the industry recorded a total income of nearly €1.5bn from the motor insurance business.


    The report, to be released publicly today by the Department of Enterprise, Trade and Employment, also shows the bulk of motor insurance business here is still being underwritten by Irish-based companies.


    The Irish Insurance Federation (IIF) conceded last night that higher premiums had had an impact on reducing losses but maintained the Irish motor insurance market was still a "hostile environment" for its members.


    IIF spokesperson Martin Long said premiums remained high because of high legal costs in personal injury cases, as well as the level of awards being paid given out which totalled €165m last year.


    "The judiciary and legal profession need to wake up and smell the coffee," he added. "They need to know that insurance is not a bottomless pit."


    He also warned the situation could not be sustained indefinitely. A future danger would be that some companies may withdraw from the market or become insolvent.


    He said the IIF was still calling for the establishment of a dedicated garda traffic corps. As a priority, it also wanted to see the extension of the penalty points system to drivers who take to the road uninsured.


    On a company-by-company breakdown, the department's report shows AXA and Hibernian paid out the largest amounts of claims, €283m and €285m respectively.


    The industry was forced on the defensive earlier this year after the release of the damning Motor Insurance Advisory Board report.


    It said that the industry here made almost nine times the profits of its UK counterpart between 1983 and 1999.


    Post-tax profits for Irish companies during this period were €434.25m compared to €48.3m (Stg£30m) for UK insurers. During this period motor insurers in Ireland only recorded losses in three years compared to eight out of 17 years for the UK.


    The industry is calling for the speedy establishment of the new Personal Injury Assessment Board amid mounting pressure from legal costs and awards in liability cases.

    Ben Quinn

    Draw your own conclusions on the cartel ?
    Also fatal motor accidents are lowest in many years yet insurance premiums still go up !


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