Dáil Éireann Debate, Tuesday - 30 June 2020
60. Deputy Aindrias Moynihan asked the Minister for Finance the progress being made by insurance companies on car insurance premium refunds due to the Covid-19 pandemic; if he is satisfied with the response from insurance companies to date; and if he will make a statement on the matter. [13352/20]
Amharc ar fhreagraThese are extraordinary times, and I believe that all sectors must play their role in ensuring that we, as a country, get through them. In view of this, I and my officials have been engaging with the insurance industry through Insurance Ireland in regards to forbearance measures particularly for business customers. In addition, the Deputy will be aware that at a meeting on 17 April with Insurance Ireland, I called on insurers to be pro-active and generous in relation to their treatment of motor insurance customers during this period. In this regard, I pointed out that a combination of the very profitable part of this market over the last 12 months and what is likely to be a significant reduction in claims for this period due to the travel restrictions that are in place, provided a strong case for premium refunds, thus providing some financial relief to their customers.
On 24 April, Insurance Ireland announced that a number of their members (Allianz, AXA, FBD, RSA and Zurich) had signed up to commitments on premium reliefs for motor customers. In addition, Liberty Insurance wrote to me directly informing me of discounts that they would apply to their customers. It is important to note that each insurer has a different mix of customers and different claims experience and that the financial supports, such as refunds or discounts, applied by each insurance company will reflect their own individual claims experience to date.
In regard to the response by the insurance industry to date, Insurance Ireland wrote to me on 25 May in respect of this and other commitments made by the insurance sector. In relation to motor insurance refunds, they outlined that six general insurance companies had, in May 2020, announced refunds in premiums to Irish motor insurance customers totalling €54.5 million. I welcome the announcements as they are a step in the right direction.
I am aware that some have expressed disappointment over the level and manner of refunds and/or discounts. In this regard, it would appear that insurers have applied a flat rate across all policyholders rather than looking at the situation in a more granular fashion. For instance, a strong case can be made that those who have been cocooning deserved a larger refund, due to their cars being off the road altogether. However, the methodology of the premium relief process is a matter outside of my control and it is important to note that each insurance company will make their own decisions as to the level and manner of financial supports, including whether to issue refunds and/or discounts based on their own particular circumstances.
Finally, I would also stress the need for other insurers operating in the Irish motor insurance market who have not yet made such premium relief announcements to do so, as there is a need by all players in the market to take a longer-term perspective in relation to their customers. I believe customers will remember and favour those companies in the future that have made steps towards meeting their needs at this difficult time.
