Minister warns insurers they can no longer ‘have their cake and eat it’
D’Arcy will not accept companies with €200 million profits ‘loading premiums’
Minister of State with special responsibility for Financial Services and Insurance Michael D’Arcy: called on insurance firms to give policyholders a break. Photograph: Dara Mac Dónaill
A Minister has warned insurance companies he will not accept their “repeatedly loading premiums” on businesses while at the same time generating significant profits.
Minister of State with special responsibility for financial services and insurance Michael D’Arcy said these companies are “having their cake and eating it”.
He called on insurance firms to give policyholders “a break” because continued price increases “risk closing down many businesses with major concerns for civil society as we currently know”.
Mr D’Arcy said the data showed that insurance costs had come down by 23 per cent but the insurance companies “are increasing profits by repeatedly loading premiums on companies.
“That is not playing fair by any manner or means and I am not prepared to stand for it,” he told the Dáil. “In my view insurers are being selective about the risks they will cover and they are picking and choosing the prices in such a way as to maximise profits at the expense of small businesses in particular.”
He added that “in a period of buoyant profitability, three major firms have made a combined profit of over €200 million, and there seems to be increasing premiums very significantly in certain sectors of the market or else withdrawing from these markets altogether”.
Mr D’Arcy said he believed “most people in the House would agree that it is very difficult to justify such behaviour in an environment where significant profits are being made.
“What is most frustrating about the industry position is their previous loss-making position was caused by their previous underpricing in order to try and capture market share.”
The Minister was speaking during a Fianna Fáil private member’s motion on business insurance introduced by the party’s finance spokesman Michael McGrath.
The Cork South-Central TD has repeatedly raised the issue of increases in business insurance costs said that so many firms including pubs, nightclubs, hotels, children’s play centres and leisure centres were experiencing very significant increases in insurance costs.
“The reality is that the cost of insurance has closed businesses and it has done so repeatedly,” he said.
Mr McGrath said there was a lack of consistency in awards. He noted the central recommendation in the report last July of the Personal Injuries Commission that “there should be a judicial council established that could issue guidelines for appropriate damages in respect of personal injuries”.
It showed that in relation to soft tissue claims including whiplash “the award levels in Ireland are 4.4 times the levels in England in Wales. The average awards are over €17,000 here against approximately €3,800 in England and Wales.”
The Limerick TD told the Dáil that CSO officials identify themselves to companies when gathering information on the price of insurance.
“It is possible that some insurance companies would provide lower quotes than they would to ordinary consumers. Unfortunately, this possibility calls into question the accuracy of the data.”