Business

South African insurer launches car and home insurance products in Irish market

Outsurance has conducted a soft launch of products ahead of its official opening here in May

South African group Outsurance has begun offering insurance products in the Irish market. Photograph: iStock

Joe Brennan
Mon Apr 22 2024 - 05:57

South African insurance group Outsurance has initiated a soft launch of Irish motor and home coverage offering ahead of the local unit’s planned official opening for business next month.

Outsurance Ireland, chaired by Tony Keohane, who is also chairman of the Football Association of Ireland and Uisce Éireann, currently has 72 staff at its offices in Cherrywood, in south Dublin, and aims to build it in the coming years to almost 300 employees.

The Irish company’s chief executive Peter Broome said the recent launch of its website and “soft launch” phase is helping it refine its systems and pricing.

“We have been quoting customers and have welcomed our first Outsurance Ireland policy holders who saved money on their insurance,” he said.

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The insurer is currently distributing car and home insurance directly to consumers online and through its call centre, he said. However, it is expected that the company will also use the broker channel in time.

The new insurer, which was granted final authorisation by the Central Bank of Ireland in December, has received €100 million of capital from its parent to meet regulatory requirements and finance itself as it seeks to grow in the coming years.

Outsurance is among a number of companies that have moved recently to get into the Irish market following a series of reforms aimed at reducing volatility and coverage costs in a historically highly-volatile market even by the standards of the cyclical nature of insurance internationally.

Italian insurance giant Generali entered the market in January through the completion of the purchase of Liberty Mutual’s businesses in Ireland, Spain and Portugal in a deal worth €2.3 billion. This marked a return by the Italian group to the Irish general insurance market some 22 years after it closed its Dublin office, which had been writing small amounts of property and casualty business as well as commercial insurance at the time.

Revolut, meanwhile, also entered the Irish motor insurance market, with policies underwritten by AIG.

[ Will Revolut’s vow to undercut Irish car insurers by 30% reactivate the industry’s herd instincts? ]

The introduction of judicial guidelines on personal injury awards in 2021 has led to a sharp fall in the average award by the Injuries Resolution Board (IRB), formerly known as the Personal Injuries Assessment Board.

Other Government initiatives include the enactment of laws last year to strengthen IRB’s role, with the introduction of a mediation service, as well as legislation aimed at balancing a property owner or business’s responsibilities with those of customers or the general public.

The Supreme Court ruled earlier this month that the judicial guidelines have legal effect, in a landmark judgment after a test case had challenged their validity. Government Ministers and business lobby groups have put fresh pressure on insurers, following the ruling, to cut premiums.

[ Finding that guidelines slashing personal injury awards has legal effect ‘of systemic importance’ - Supreme Court ]

The average motor premiums fell 22 per cent between their peak in late 2017 and the end of 2022, according to Central Bank data, helped by an industry-wide decline in claims costs after the guidelines were introduced.

However, latest figures from the Central Statistics Office show that motor rates have increased by 4.2 per cent in the 12 months through February. The increase has largely been down to a spike in motor damage costs, amid inflation for labour and car parts, according to insurance sources.

Joe Brennan

Joe Brennan

Joe Brennan is Markets Correspondent of The Irish Times

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