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Motorists 'ripped-off' by insurers and lawyers

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 (Stock image)

(Stock image)

(Stock image)

Insurance companies have been accused of giving motorists a raw deal after a new report found their profits rising despite a fall in the cost of settling claims.

The revelation prompted a demand for immediate reductions in premiums.

A stark new report from the Central Bank shows motor insurers in this market collectively made profits of €142m last year, which was up from €130m the previous year.

Central Bank statisticians say the cost of the average motor premium is now €653, a rise of 35pc over the past 10 years.

Over the same period, the cost of claims per policy has fallen by 9pc.

The report shows lawyers are reaping millions of euro out of the system, despite the existence of State body, the Personal Injuries Assessment Board, put in place to settle claims without the need to incur legal costs.

Legal costs make up more than half the cost of settling claims that are litigated, according to the Central Bank's National Claims Information Database report.

Brokers are also getting a huge chunk of the cost of premiums.

The findings indicate that insurance companies are failing to pass on benefits from the lower cost of settling claims.

At €653, the average premium was down just 4pc last year when compared with 2018.

This is despite the cost of settling claims falling in the past number of years.

The Alliance for Insurance Reform said the analysis shows motorists still being ripped off by insurers and lawyers.

"The report also lays bare the scale of the greed that has driven the current insurance crisis, enriching insurance companies, brokers and lawyers at the expense of Irish motorists struggling to make ends meet," it said.

Progress

Peter Boland of the alliance said it was clear from the report that motor insurance premiums have not reduced dramatically in the last two years, contrary to the sample data published by the Central Statistics Office and used extensively by Government to illustrate progress.

"There is a clear case from this data for immediate reductions in motor insurance premiums to sustainable levels and an urgent acceleration in the real reform programme promised by the Cabinet Committee Sub-Group on insurance reform," he said.

Profits for motor insurers were 10pc of their income last year, up from 9pc in 2018.

Brokers saw 15pc of underwriting costs going to them last year.


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