herald

Wednesday 28 September 2016

Noonan blames insurance hikes on economic recovery

Michael Noonan Picture: RollingNews.ie
Michael Noonan Picture: RollingNews.ie

The economic recovery is partly to blame for the massive hikes in insurance premiums, Finance Minister Michael Noonan has said.

During a Dail debate on the spiralling cost of insurance the minister said the industry cites many reasons for the price rises.

"Claims frequency has increased as a result of increased economic activity and increasing miles travelled per car. This is not being counter-balanced by a drop in the number of accidents," he said.

Mr Noonan said consumers were also being "directly impacted" by the cost of using the legal system to settle disputes and compensation awards that result.

He indicated Fine Gael will not oppose a motion from Fianna Fail seeking a taskforce to investigate what is driving prices up. However, while he is open to the idea of "broad taskforce" he wants to wait for the outcome of a review of the market that is already underway within his department.

He said the current review will consider issues such as a National Claims Register that would log all pay-outs whether made in or out of court.

"The current lack of data presents difficulties from a policy analysis and development perspective. Accurate timing and accessible information on claims in particular would assist insurers, including new entrants, in assessing the Irish market," he said.

Fianna Fail is expected to win a Dail vote tonight which criticises the lack of action to stop prices rises and calls for a package of measures.

Some consumers have seen a 60pc increase in the cost of their motor insurance since January 2014 and 34pc hike in the past year alone.

Fianna Fail finance spokesperson Michael McGrath said: "Motorists are required to have a minimum of third party insurance cover, so the cost of motor insurance is a major issue for family finances.

Reeling

"Increases of €200 to €300 are now typical for customers renewing their policy. Motorists are absolutely reeling from these dramatic price increases."

"Up to 2013 we were in a period of falling motor insurance premiums. However, the benefits that were achieved from concerted action to reduce costs are now evaporating. In our view there is an obligation on the state to respond to these soaring premiums."

The Labour Party is to back the Fianna Fail motion and while Sinn Fein is supportive of its content they have tabled a number of amendments.

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