The Motor Insurance Advisory Board (MIAB) report contained many worthwhile recommendations, which, if implemented, should reduce the cost of insurance, but uninsured motorists still cost FBD Insurance €14.2 million a year, its chairman, Mr Michael Berkery, said yesterday.
Mr Berkery said this amounted to a levy of €112 on every motor policy written by the company. "Clearly, it is long past time for the relevant responsible agencies, namely the Department of Justice and the Department of the Environment, to invest the time and resources necessary to eradicate this lingering scourge on law-abiding, premium-paying motorists," he told shareholders at the company annual general meeting in Dublin.
Mr Berkery said the present compensation culture had to be changed and he supported the proposals of the MIAB to set up a personal injuries settlement board to establish threshold award levels; the imposition of penalties for fraudulent and vexatious claimants; the abolition of VAT on legal fees and personal injury cases and the amendment of the rate of interest from 8 to 4 per cent and the amendment of the rules for charging interest on legal bills.
Mr Berkery said that, while it was correct in absolute terms to say that profits in Ireland were 10 times those in Britain, it implied that Irish insurers were making excessive profits. "What failed to be highlighted was the critical fact that the UK profit margin on earned premiums amounted to a paltry 0.03 per cent, with the Irish margin being approximately 4 per cent."
"Irish commentators ignored the reality that both levels of margin were totally inadequate. They have forgotten the recent demise of the Independent Insurance Group, which underwrote business at uneconomic rates. As an Irish insurance company, we have always adopted a policy of prudent underwriting. Solvency margins ought to receive as much attention as profit levels in this public debate," he said.
He said FBD's hotels, property and leisure interests in Ireland and abroad had given the group a broader base for growth, with leisure property in particular being a growth sector.
FBD Holdings increased its operating profits last year by 8.3 per cent to €30.2 million and earnings per share by 8.8 per cent to 59.59 cents. Net assets per share increased by 22.5 per cent to 483.1 cents.
