More than €100 could be immediately knocked off the average cost of a motor insurance policy in the Republic if relatively straightforward measures aimed at tackling fraud and legal costs were implemented by policy makers, the AA has said.
In an update to a “five-point plan” it published in 2015 when motor insurance premiums were spiralling, the insurance broker said costs were still far higher than they should be because Government attention has “wavered and identified reforms have stalled”.
It said high-cost premiums were regarded as a crisis by Government two years ago, but necessary changes were not pushed through despite promises being made.
It said the absence of proper reform and legislation has resulted in little change for the average motorist and it warned the emergence of other political issues, including Brexit and the housing crisis, has led the Government to “take its eye off the ball” leaving motorists in a worse position now than they were when the insurance crisis first emerged.
"Sky-high premiums are the new normal," said the AA chief executive Brendan Nevin. "People were shocked by this two or three years ago. The shock has worn off but the price increases have not."
“In recent months premiums have dropped slightly which has had the negative side-effect of allowing Government to treat this as yesterday’s problem,” he continued.
“The spike in premiums gave Government an opportunity to introduce necessary reforms and legislation to create a healthier insurance market, which would have greatly benefitted the consumer, but they have failed to follow up their initial report with serious action. It is a crisis wasted.”
Lobbying
According to AA estimates, the average motorist is still paying an extra 25.3 per cent for insurance than they were in November 2015.
"Two years ago, the AA published its first report and began a sustained campaign of lobbying to get issues tackled. There followed the Oireachtas Transport Committee Report and Minister Eoghan Murphy's Working Group Report. "We were delighted with them. They reflected our concerns and promised solutions. Now in 2018, very little has been delivered," Mr Nevin said.
When asked how much Irish consumers could save if just some of the reforms the AA proposed were introduced, its Director of Consumer Affairs Conor Faughnan suggested at least €50 could be knocked off policies if measures aimed at tackling fraud were introduced while the high cost of legal actions could save at least the same again.
In its report, the AA called for all stakeholders to “work together to block fraud at every turn”. It said awards should be standardised to remove uncertainty and it called for greater industry transparency and better use of technology by the Garda.
"A number of actions contained in the initial Cost of Insurance Working Group report involved monitoring or analysing certain events such as claims awards abroad, but fell short of recommending a direct action that would follow this analysis," said Mr Nevin.
“Given that the crisis is still unresolved we now need to see leadership from the working group and the top level of government to finally implement necessary changes which would greatly benefit the average motorist. Without this proper leadership and action we will still be discussing many of these issues in two years’ time.”
