New personal injury guidelines for the insurance industry will “positively” impact premiums, according to the CEO of Zurich Ireland.
Anthony Brennan said in the coming weeks, the company will implement changes to customers premiums to reflect the impact of the reforms.
Mr Brennan was addressing the Committee on Finance, Public Expenditure and Reform, which today heard from representatives of the insurance industry.
He said a decision has been made on the scale of the reductions, adding that “we will not be found wanting”, but said he cannot engage in “price signaling” in advance of the official announcement.
“We will pass on… the benefit of these reductions in claims costs to our customers”, Mr Brennan said.
He was making opening remarks, and then responding to questions from Pearse Doherty, Sinn Féin Finance Spokesperson, who asked when premiums will be reduced.
Deputy Doherty said people renewing at the moment are being asked to pay higher premiums.
He asked why “extortionate premiums” are still being charged, three weeks after the guidelines were introduced.
Mr Doherty said 61% of 1,000 respondents to his office who have renewed over the past three weeks, “have had an increase in their renewal quotation for motor insurance”.
Mr Brennan expressed surprise at this.
Declan O’Rourke, CEO of Aviva Insurance Ireland, responded by saying premiums have “fallen 8% in the past six months” in anticipation of the reforms, which he thinks “is the largest decrease in motor insurance premiums in such a short time”.
Price changes do not happen in a single day, he added.
He said Aviva’s average premium “is back down to where it was in 2010”.
FBD Insurance CEO, Tomás O’Midheach, said they had made a calculation to pass on the savings straight away, and have already done so.
Deputy Doherty cited specific cases where FBD premiums were increased.
Mr O’Midheach expressed surprise, saying “it is unusual, for any one individual… without some other cause to have an increase.”
Earlier, he said FBD Insurance has provided €12m in rebates in 2020, and €4m in 2021.
He was responding to Neale Richmond, Fine Gael TD, who asked about payments to publicans for the interruption of their business by the pandemic.
Jackie MacMahon, FBD’s Chief Claims Officer, said that €11m has been paid out to date in interim payments, €4m has been paid to publicans who have submitted information, and there are offers out to other publicans worth €2m.
Declan O’Rourke said “the vast majority of Aviva Insurance Ireland policies do not provide cover arising from the Covid pandemic.”
While he welcomed the new guidelines, Mr O’Rourke said that the reduction in the award for minor whiplash still leaves it at four times the rate in the UK, where a newer lower rate has been introduced.
Senator Pat Casey, Fianna Fáil, said that taxpayers money has kept businesses afloat, so they were in a position to make a claim.
He asked whether it is fair that taxpayers subsidise a payment that the insurance company should make.
“In all claims we make we will record any state support we deduct so it’s very clear what the amounts are and we will engage with the minister”, Mr Brennan, CEO of Zurich Ireland said.
End to dual pricing will leave some customers worse off
Declan O’Rourke, CEO of Aviva Insurance Ireland warned that an end to dual pricing will leave some customers worse off.
“People who shop around now get a good deal and they will not get as good a deal afterwards… if dual pricing is banned”, he told a Dáil committee.
He warned that this could be an “unintended consequence” of new legislation to tackle dual pricing.
Mr O’Rourke said that protecting vulnerable customers is very important, but that it is important “to be careful with the market as well.”
He warned against replicating the health industry, and said he fears “certain players” could get involved with “sharp practice”.
Legislation on dual pricing has passed the Dáil, Sinn Féin’s Pearse Doherty said, and will be before the committee in October.
Aviva increasing presence in leisure and activity businesses
Mr O’Rourke said Aviva is increasing its presence in leisure and activity businesses, such as adventure centres and voluntary projects.
He said Aviva has “underwritten quite a number of voluntary organisations in the last number of months”.
This is being facilitated by reforms to the industry, he said.
However, Mr O’Rourke cautioned that in the past all insurers have been “badly burned” in those areas.
Anthony Brennan, CEO of Zurich Ireland, said there needs to be “more progress on the duty of care” before Zurich would consider moving into those areas.