The Oireachtas finance committee has accused insurance companies of targeting consumers with unjustified premium increases.
Committee members blamed insurers for the “inexplicable” surge in the cost of motor insurance and called for far greater transparency across the industry.
The cost of motor insurance has soared by an average of 70 per cent over the past three years with anecdotal evidence of increases of up to 300 per cent, committee members said.
In a scathing review of the industry the committee requested that raw insurance data be made available to restore “some degree of normalcy” to the market.
John McGuinness, the committee chairman, called for detailed information on claims settled privately by insurers to be made publicly available.
About 20 per cent of claims are processed through the Personal Injuries Assessment Board (PIAB) with a further 10 per cent settled in court.
The report found that there was “no visibility or transparency whatsoever” about the remaining 70 per cent of privately settled claims.
Committee members questioned the sincerity of the insurance sector’s commitment to examine ways in which this data could be made available.
“Spiralling motor insurance premiums is making insurance unaffordable for many people and adding also to business costs. The report the committee has launched today seeks to address the underlying factors contributing to the rising costs of motor insurance and to make recommendations to reverse this unsustainable situation,” Mr McGuinness said.
The report made 71 recommendations across a range of areas such as transparency, suggested legislation and regulation and supervision.
It recommended that insurers change their “closed shop” mentality, which it said prevents other insurance companies entering the market and stunts competition.
It also called for the Central Statistics Office to be given a statutory role in collating insurance data and recommended that consumers be given detailed cost information in renewal notices.
The Central Bank and the Competition and Consumer Protection Commission were the subject of harsh criticism, with the former being accused of neglecting its responsibility to protect consumers. The review called for the Central Bank to be more proactive in its regulation of the industry and for the PIAB to be given greater powers so that it can increase the number of claims it helps settle. It also suggested that the Book of Quantum, which details the average level of awards, be reviewed and updated on a regular basis.
Insurance Ireland, the industry representative body, welcomed the publication of the report, which it said should lead to the reforms necessary to address the high cost of claims and awards that have led to increased motor premiums. Kevin Thompson, the chief executive, said that insurers shared their customers frustrations at the increase in premiums.
Business and consumer groups gave the report a broad welcome but urged the government to act on its recommendations quickly.
Patricia Callan, a director of the Small Firms Association, called on the government to “swiftly” act to address what she referred to as the country’s insurance crisis.
“Insurance costs have been increasing for a number of years. In the past year, however, the situation has become significantly worse, with motor premiums skyrocketing,” Ms Callan said.
She added that motor premiums among its members increased by an average of 35 per cent last year.
Jonathan Hehir, the managing director of coverinaclick.ie, the insurance website, commended the committee on its work but warned that the report was no more than a wish list of actions and only the first step in the lengthy process needed to address the rapid rise in premiums.
“We will have to wait and see whether or not these recommendations will be actioned or whether this report will simply gather dust — produced solely to appease drivers in the short term and hope they forget the issues over the long-term,” Mr Hehir said.