Government tells insurers to pass on savings to policyholders

Insurance companies have been told again by the Government to pass on savings to policyholders they have made from massive reforms in the sector.

The call comes as the Irish arm of Axa will pay French parent a €70m dividend this year after bumper profits in 2023.

Accounts for Axa Insurance DAC show its after-tax profits quadrupled in Ireland in 2023, increasing from €23.7m to €94.5m.

The 2024 dividend matches the €70m sent to France in 2023.

There have been a string of radical changes made to legislation and injury award levels that have benefited insurers.

But despite this, motor insurance premiums are now rising at 15 times the rate of general inflation, with house and health insurance premiums also shooting up.

Insurers blame more damages-related claims and higher costs of settling these for rising premiums, and high legal cases in claims that are litigated.

Junior minister with responsibility for Financial Services, Credit Unions and Insurance, Neale Richmond, has held a second meeting since the summer with insurance companies.

He had previously given them until the end of the summer to pass on savings to policyholders, after an initial meeting.

At the latest meeting he “impressed upon them the need to pass on savings achieved through the reform agenda in the form of reduced premiums and expanded risk appetite”, Finance Minister Jack Chambers said in a Dáil reply.

“At these meetings, he has received positive feedback on the expansion of product lines, improving risk appetite, the implementation of the Government reform agenda, and the regulatory environment,” Mr Chambers told Sinn Féin’s Ruairi Ó Murchú and Fine Gael’s Bernard Durkan.

Motor premiums have been rising for 14 months in a row.

The cost of insuring a vehicle was up by 11pc in the year to October, according to the latest inflation figures from the Central Statistics Office (CSO).

The CSO said home insurance rates were 7.6pc higher.

This comes after a string of reforms have been delivered that benefit the insurance industry.

These include the slashing of recommended levels of pay-outs for, enhancements to the Injuries Resolution Board and a rebalancing of the duty-of-care legislation for businesses.

Mr Chambers told the TDs progress has been made with the Government’s Action Plan for Insurance Reform.

He said new insurers had come into the Irish market.

“We have seen encouraging signs of heightened competition in the market recently, with new entrants OUTsurance, Revolut and Fastnet offering further choice and competition to consumers.”

Fastnet is an IFSC-based underwriter acting for larger insurance companies that sells its policies through brokers in this country.

Mr Chambers said: “There has been a reduction in premiums of the order of 40pc since December 2016 in this country, versus a 20pc increase across the euro area.”