Insurers ‘in retreat’ over lack of information about claim costs

Insurance companies are pulling out of Ireland because of the lack of information about the costs of meeting claims, the Automobile Association warned on Thursday.

"Competition should be attracted into our market, but, in fact, insurers are in active retreat from Ireland,'' Mr Conor Faughnan, director of consumer affairs of the Automobile Association (AA Ireland) told an Oireachtas committee.

The “book of quantum’’, the document that describes in detail the appropriate level of financial compensation for injuries of a given severity, is hopelessly outdated and is effectively useless as a guideline to the courts, he said.

Meanwhile, the courts are not bound to abide by it. Seven out of every 10 cases are settled directly by the insurance companies to avoid a court case, but the detail of settlements are not shared.

Motorists are now more concerned about the cost of insurance than road safety, fuel costs, taxation and road maintenance, Mr Faughnan told the Oireachtas Joint Committee for Finance, Public Expenditure and Reform.

Premiums have risen dramatically and could rise by a further fifth, he warned, adding that new car sales have themselves jumped by 20 per cent so far this year.

Motorists who had made an insurance claim, or acquired penalty points, were unable to shop around and had to absorb whatever increases there were with their insurance company.

Mr Faughnan said there was a lack of clear information and data on issues surrounding proper claims’ costs. “So if you are a foreign insurance company, and you want to come into Ireland, you are at a disadvantage vis-a-vis the people already here because our data is so murky and so difficult to understand,’’ he added.

Chief executive of the Irish Small and Medium Enterprise Association Mark Fielding said there was a continuous line of complaints from members on the handling of what they would regard as questionable claims.

Members complained insurance companies continued to settle without the consent and knowledge of the insured businesses, he added.

Director of the Small Firms Association Patricia Callan said rising costs and competitiveness were issues for her members, ranking second only to labour costs.

“That is, actually, quite staggering for companies,’’ she added.