Insurance industry 'mystery'

There is a perception that the Irish insurance industry is engaged in a cartel which has the effect of limiting competition and falsely raising insurance prices, the Oireachtas Joint Committee on Enterprise and Small Business was told yesterday.

"I think this committee should ask the Tβnaiste to refer the whole issue of insurance costs to the Competition Authority, to investigate whether there is a cartel in operation," Senator Paul Coghlan said.

Deputy Charlie Flanagan described the situation with regard to motor insurance for young people as a "scandal" compared to other countries, and said there was a lack of openness and transparency, while Deputy Andrew Boylan described the insurance sector as a multimillion pound industry shrouded in mystery.

The Irish Insurance Federation was engaging in a public relations mission with the publishing of its profitability study on motor insurance from Tillinghast, according to Deputy Joe Higgins.

"We need a totally independent analysis from a completely independent agency," he said.

Mr Mike Kemp, chief executive of the Irish Insurance Federation, said the high cost of insurance was not due to "inefficiencies or profiteering" within the industry, but instead blamed inadequate road safety, litigation and the high cost of claims.