THOUSANDS of motorists and small firms that have commercial vans will be forced to find a new insurer after Dublin-based Setanta Insurance said it was winding up its business here.
The move is likely to mean higher motoring insurance rates, the Irish Brokers Association said.
Close to 100,000 people are insured with the company, mainly firms that have vans. But there are also a number of consumers who have private motor insurance.
The company said all policies that are currently in place would be fully covered and it would honour legitimate claims. But it will not be renewing any existing policies that come to the end of the one-year term.
The insurer has now stopped taking on any new business.
The company said it had sought additional funding to run its business and when this was not available it agreed with its regulator, the Malta Financial Services Authority, to cease operations here on a phased basis.
The Irish Central Bank has no role in regulating the insurer.
Setanta has been operating in Ireland for almost seven years. It operates through brokers.
Insurance experts said it was probably the largest insurer of commercial vans in the country.
In a letter to brokers, the company said it was legally solvent, but insolvent from a regulatory point of view.
The company’s offices in Blanchardstown, west Dublin, will remain open to handle claims and to answer queries, it said in a statement.
The Dublin office is run by John Beatty, a spokeswoman for Setanta Insurance said.
Irish Brokers Association boss Ciaran Phelan (left) said the closure could mean insurance rates rising by 10pc.
“With this news coming at a time when motor insurance premiums are already at a low point in the premium cycle, we could see double-digit increases in the months ahead,” he said.
Broker Jonathan Hehir of insuremyvan.ie said he expected the loss of the insurer would mean rates would rise. He said Setanta was the largest van insurer in the market.
“There will be a gradual increase in commercial vehicle insurance rates as a result of this. This time next year rates will be between 5pc and 10pc higher than they are at the moment,” Mr Hehir said.
He said the main insurers of commercial vehicles were now Zurich, Allianz, Liberty, Axa and Aviva.