Insurance companies are coming under close examination as customers face dramatic rises in premiums. The companies blame rising claims, costly court awards and even the inclement weather. It is true that claims are climbing and the growing compensation culture prevalent in Ireland is not helping. It is also true that insurance customers have reaped the benefits of strong investment performance during the long bull market. With intense competition for business, companies used these investment profits to artificially hold premiums down.
What is also true, and more worrying, is that competition is rapidly disappearing in the insurance market. The arrival of the multinational insurance combines - CGNU, AIG and Allianz - has seen to that.
As Hibernian - CGNU's Irish operation - said this week, its withdrawal from large new commercial risks leaves the market largely to AIG and Allianz. For them, Ireland is a small market and they are not going to be overly accommodating. Companies either pay the rate they offer or they may well find themselves with no insurance. Some choice.
Dominic Coyle can be contacted at dcoyle@irish-times.ie
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