The Cost of Insurance Working Group, led by TD Eoghan Murphy, has identified three ways in which the motor insurance industry can be improved to better protect consumers in Ireland.
Governor of the Central Bank, Philip Lane, has voiced his support for the proposals and has acknowledged that “volatility in the price of insurance has an unwelcome impact on consumers”.
The first recommended change for the industry is that renewal notice periods be extended from 15 days to 20 days. Tweet this!
The extra 5 days would give consumers more time to compare their options in the market and potentially avoid panic renewals, which can often lead to overpaying.
The Working Group’s second proposal is that insurers provide more information to customers on how their premiums are complied.
Motor insurance premiums can be difficult to understand, leaving many customers feeling confused when renewing their premiums.
With clearer, more detailed information on exactly how premiums are put together, consumers would be better-placed to decide which features are right for them, and which ones aren’t.
The Cost of Insurance Working Group has also called for “substantive” work to be done to improve data availability across the industry.
In June of last year, former chairwoman of the Motor Insurance Advisory Board, Dorothea Dowling, highlighted the fact that there is a distinct lack of transparency in the industry when it comes to claims data.
She pointed out that, of the 31,576 claims made in 2015, the outcome of only 9,046 of them were made publicly available. This means that there were over 22,000 claims in which only the insurance company - and the claimant - knows what happened.
Considering that insurers often blame price hikes on an increase in the number and value of claims, the establishment of a national claims information database would bring some much-needed transparency across the market.
The cost of motor insurance premiums is estimated to have risen by over 60% in 2016, prompting widespread national debate and vehement criticism of insurers.
The Cost of Insurance Working Group was established in June 2016 on the back of the outcry and is keen to “identify immediate and longer-term measures which can address increasing costs” in the industry.
Although Philip Lane has made it clear that the Central Bank does not have a role in the setting of premiums, the fact that actionable proposals are now being made is welcome news for consumers, many of whom have been hit with shock premium increases over the last two years.
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