Insurance cost hikes to ease – but not quickly

Motor insurance reforms being introduced by the Government will put the brakes on premium hikes, according to experts.

But it will be the second half of the year before the changes start to have an impact.
The Government’s working group on insurance costs will also help Dublin-quoted insurer FBD break even this year and return to profit next year, financial analysts said.

Emer Lang, an insurance analyst at Davy Stockbrokers, told investors the measures being introduced would mean there would be more scrutiny of insurance pricing in the market.
She said in a note that the planned changes were “likely to exert pressure on insurers to pass a share of benefits accruing on to consumers”.

“The implementation of these measures and reforms should help to stem the recent inflationary claims environment. However, the report itself acknowledges it will take time to implement,” Eamonn Hughes of Goodbody Stockbrokers said.
President of the Law Society, the representative body for solicitors, Stuart Gilhooly, said rises in premiums would ease this year due to the measures.

The Government’s working group on insurance costs outlined 33 changes, including the setting up of a fraud database and the establishment of a new commission to look at award levels in Ireland compared with abroad.

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