Motor Insurance costs are far higher than they should be for consumers because Government attention has wavered and identified reforms have stalled, according to the AA.
The insurer says this was being treated as a crisis by Government two years ago but necessary changes are not now being pushed through.
In an update to its initial ‘5 Point Plan to Tackle Rising Premiums,’ published in November 2015, the insurance intermediary today highlighted that an absence of proper reform and new legislation has resulted in little change for the average motorist. AA Ireland warned that the emergence of many other political issues, from Brexit to Housing, has led the Government to take its eye off the ball in resolving the insurance crisis. Motorists are in a worse position now than they were when the insurance crisis first emerged.
“Sky-high premiums are the new normal.” says AA Chief Executive Brendan Nevin.
“People were shocked by this two or three years ago. The shock has worn off but the price increases have not.”
“In recent months premiums have dropped slightly according to the Central Statistics Office which has had the negative side-effect of allowing Government to treat this as yesterday’s problem. The spike in premiums gave government an opportunity to introduce necessary reforms and legislation to create a healthier insurance market, which would have greatly benefitted the consumer, but they have failed to follow up their initial report with serious action. It is a crisis wasted.”
Despite recent CSO findings indicating that insurance costs had dropped slightly, the AA estimates that the average motorist is still paying an extra 25.3% for insurance than they were in November 2015.
“Two years ago the AA launched its report and began a sustained campaign of lobbying to get these issues tackled. There followed the Oireachtas Transport Committee Report and Minister Eoghan Murphy’s Working Group Report.
“We were delighted with them. They reflected our concerns and promised solutions. Now in 2018, very little has been delivered.
The AA believes that since the working group published its first report the political will to solve the crisis has largely dissipated – with political attention switching elsewhere. “We want to see this work completed with the same energy as when it was started.
“The measures we proposed two years ago would not take significant effort or financial capital to implement, but would lead to a healthier insurance industry and greatly improve the existing situation for the consumer.
“A number of actions contained in the initial Cost of Insurance Working Group report involved monitoring or analysing certain events such as claims awards abroad, but fell short of recommending a direct action that would follow this analysis, Given that the crisis is still unresolved we now need to see leadership,” he said.
The AA is calling on the government to reassess the initial report from the Cost of Insurance Working Group and determine what further actions are needed to improve the existing situation, particularly in 5 key areas outlined in its original 5 Point Plan.
The five areas identified by the AA are as follows:
1 Fraud - Work together to block fraud at every turn
2 Legal – Standardise awards and remove the uncertainty
3 Regulatory – Resource up and protect the industry
4 Enforcement – Invest and modernise
5 Industry Transparency – Share the data and learn