Increase in Motor Insurance Premiums, what’s going on?
Unfortunately motor insurance premiums are rising and this is expected to continue for the foreseeable future.
The question most of our customers want to know is why the increase?
What is the cause?
Unfortunately there is no dominant cause with many reasons having being publicised. For many years, motor insurance premiums have been underpriced in the Republic of Ireland and this has led to many insurers reporting losses on their motor insurance businesses in 2014 and in previous years. The basic premise of insurance is that the insurer needs to be able to cover the cost of claims.
There has been a significant increase in road users in recent years due to Ireland’s return to economic growth. This increase in traffic has led to a greater number of claims over the last 18 months compounding any loss making situations, which many insurers have experienced.
With the required preparation for the introduction of the EU led “Solvency II” directive in 2016, insurers must hold greater amounts of capital to cover their claims. Indeed, motor insurance requires more capital than other insurance products leading insurers to adjust their prices to cater for the minimum solvency requirements this year.
There is also uncertainty on the level of inflation on claims values due to changes in Court jurisdiction limits in 2014 (lower Courts now awarding higher values), potential Injuries Board increases and the cost of more legal advisor intervention on behalf of claimants. These factors combined have led to customers being asked to pay more for motor insurance introducing additional pressure on their budgets.
Our Role as an Insurance Broker
Insurers must continue to offer value and protection and as Insurance Brokers we strive to provide the best price available through our panel of providers with the appropriate cover every time.
In addition when one of our customers needs to make a claim we are here to guide them through the claims process and secure their maximum entitlement with the minimum of hassle.
If you have any queries or need any help or guidance please contact us.