Lower claims prompt Axa to cut motor insurance by €34m

One of the Republic's major motor insurers says it will cut premiums by €34 million in the next 12 months. In response to lower claims awards, Axa said most customers would see their premiums fall, although the reduction could be as high as 20 per cent or as low as 1 per cent.

The company said it had already decreased private premiums by 13 per cent in the year to the end of October. Average premiums were €904, compared with €1,037 for October 2002. Commercial motor premiums - excluding fleet - were also down, by 4 per cent, chief executive Mr John O'Neill told the Joint Oireachtas Committee on Enterprise and Small Business yesterday.

"The vast majority of motorists insured with Axa will see a lower premium than last year unless the risk has changed," said Mr O'Neill.

The introduction of penalty points, renewed Government commitment to road safety and a clampdown on insurance fraud had also helped push down premiums, said Mr O'Neill

In a later presentation to the committee, FBD said it had lowered premiums, by up to 20 per cent in some cases.

With losses on employers' liability and public liability starting to reverse, FBD would look at the possibility of reducing these premiums at the first opportunity, said Mr Philip Fitzsimons, FBD chief executive.

Motor premiums were almost certain to fall further, he added.

"Analysis of our motor experience is ongoing and we anticipate further reductions in certain risk categories in the near future," he said.

Earlier this week Allianz and Quinn-direct said they had reduced premiums this year following a fall in compensation payouts. Allianz said it would further reduce premiums from the January. But they told the committee that insurance reform still had to move into first gear, with the long-awaited personal insurance assessment board yet to be established.

Meanwhile, the Irish Brokers Association (IBA) has rejected claims by Quinn-direct that some brokers are blacklisting the insurer over its refusal to pay commissions. If brokers declined to do business with Quinn-direct, it was on the basis of the details of its policies rather than because of its policy on commissions, the IBA said.