Less than half of consumers switched car insurance at last renewal
Central Bank study also finds many are hazy on identity of provider
The research comes following the high profile collapse in April 2014 of Maltese based insurance company Setanta Insurance, which had sold insurance in Ireland on a freedom of services basis. Photograph: iStock
Less than half of Irish consumers switched car insurance at their last renewal date, a new survey shows, with some having a lack of knowledge as to who their insurance company actually is.
The research, from the Central Bank finds price is the key driver for consumers when it comes to choosing an insurance provider.
It also shows that Irish consumers may be more inclined to switch car insurance than other types of financial products such as mortgages.
Still, some 58 per cent of respondents said they renewed their insurance with the same insurer or intermediary at their last renewal, with 42 per cent switching to a new provider.
The study also found that three quarters (76 per cent)of respondents knew the identity of their motor insurer, with 16 per cent saying they didn’t. However of those who said they did, 25 per cent cited the name of a broker who sold them the insurance - rather than the actual insurance company - indicating some element of misunderstanding.
Price, rather than the insurer, was the primary driver behind choosing a provider for almost 80 per cent of respondents. Cover/benefits was identified as the second most important factor.
The goal of the research from the regulator is to better understand the Irish private motor insurance market and how managing general agents (MGAs) operate and interact with consumers when selling on car insurance. Unlike brokers, which just resell insurance policies, MGAs sell and manage policies on behalf of insurance underwriters. Examples include Blue Insurance and Patrona.
The research comes following the high profile collapse in April 2014 of Maltese based insurance company Setanta Insurance, which had sold insurance in Ireland on a freedom of services basis.
Director of consumer protection Gráinne McEvoy, said: “Consumers have a right to know exactly who they are buying insurance from and should be provided this information in a straightforward and simple way that avoids creating confusion or misunderstanding.”
When it came to where their insurer was located, less than half (49 per cent) said it mattered to them, with 45 per cent of these saying that if the insurer was located outside the State it might change their decision. Almost a quarter (23 per cent) of respondents, with a high scoring amongst younger people, said that they would be likely to buy motor insurance from a non-Irish domiciled motor insurer in the future. A majority of the over -55s said that location did influence their decision on buying insurance.
Ms McEvoy said the inspection “shows that there is room for improvement and, as a result, we have required specific actions to be taken to ensure consumers’ interests are better protected”.
These include requiring those selling on insurance to amend policy documentation to make it clear to consumers who their insurer is and where their insurer is located, and formalising contingency plans to better protect consumers in the event of an insurer exiting the Irish market.