Demand a super tax for insurers accused of turning Ireland into a ‘treasure island’

Insurance companies have been accused of turning Ireland into a “treasure island” with claims they are on course to make super profits this year.

The Alliance for Insurance Reform has urged the government to do more to boost it competition in the market.

And the leader of the Irish Consumers’ Association, Michael Kilcoyne, said it may be time to consider a super tax for insurers afterwards two of them together made profits of 150 million euros.

FBD reported a higher-than-expected pre-tax profit of 110 million euros for last year and announced it would pay a dividend of 35.3 million euros to its investors.

Aviva saw its home and motor insurance profits increase by 34 percent to 43 million euros last year.

It said it had reduced premiums in line with new personal injury guidelines agreed by judges, with expected lower costs for minor injury claims.

This week, Tánaiste Leo Varadkar said average personal injury compensation payments have fallen by 50 percent since revised guidelines for calculating compensation were introduced.

The data was provided by the Personal Injuries Assessment Board (PIAB) and represents a further drop in the average 40 percent reduction seen in the first five months after it went into effect last April.

Earlier this week the general insurance arm of Aviva Insurance Ireland, which includes motor and home insurance, said its operating profit had risen 34.4 per cent to 43 million euros.

The reasons given for this included reduced claims due to Covid-19.

Aviva Ireland Chief Executive Declan O’Rourke acknowledged that PIAB awards had declined as a result of the new court guidelines, but said there had been a fall in acceptance rates for PIAB assessments and a reduction in head-to-head comparisons.

“This will eventually result in more claims going to court, which is the most expensive route to claims settlement,” he said.

“This will undermine the impact of reforms.”

But he welcomed those of the government plan to strengthen the PIAB’s powers to enforce early engagement between parties involved in claims and reduce the number of cases going to court.

Peter Boland, Allianz’s director for insurance reform, said his organization is not surprised at the levels of profits currently being announced by insurers.

“We have been warning for two years that a combination of ongoing insurance reforms and dramatically reduced economic and social activity during the pandemic would result in super wins for incumbent insurers, who have continued to increase their liability premiums to voluntary groups and corporations, giving only ridiculously low discounts for motorists,” he said.

“Ireland is a treasure island for the incumbent insurers.”

Mr Varadkar said the government’s focus will be on legislative reforms in the areas of resident liability, competition enforcement and the PIAB.

https://www.independent.ie/business/personal-finance/insurance/call-for-super-tax-on-insurers-who-are-accused-of-turning-ireland-into-treasure-island-41413905.html Demand a super tax for insurers accused of turning Ireland into a ‘treasure island’

Fry Electronics Team

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