Minister calls for motor insurance refunds

The Minister for Finance has told the motor insurance industry that they should consider refunding customers given what is likely to be a significant reduction in claims as people abide by restrictions to stay at home.

On a teleconference call with Insurance Ireland, Minister Paschal Donohoe said insurers must be pro-active and generous in relation to their treatment of motor insurance policyholders.  "I pointed out that a combination of the very profitable part of this market over the last 12 months, when combined with what is likely to be a significant reduction in claims for this period, provides a strong case for some type of refund of consumers motor premium package," he said.

Insurance Ireland said it noted the minister's comments, and while rebates of this nature are not occurring to date in the UK or Europe, it said it would reflect on the minister’s concerns with its members as a matter of urgency.

Chief Executive Moyagh Murdock said: "We listened to the minister's views regarding the potential for motor insurance rebates and we have committed to examining this issue fully with our members and to respond constructively."

The minister also told the representative group of concern that some insurance companies have adopted a "blanket" rejection of all business interruption claims.  He said failure to pay certain policies reinforced the view that some insurers were doing the industry significant reputational damage and were not treating customers fairly.

The minister acknowledged the clarifications that Insurance Ireland made, in particular about where there is ambiguity in the policy that insurers will interpret it in favour of the consumer, and he pointed out that the Government's advice to close their business is the same as a direction. Minister Donohoe said that members of Insurance Ireland who have agreed to do so must deliver on their commitments made regarding Forbearance and Business Premises. 

On the issue of business interruption insurance, Insurance Ireland said insurers understand that this is a cause of concern in the marketplace. It said this is a complex issue, no insurance market in the world provides widespread insurance coverage for pandemics and Ireland is no exception. However, insurers are very mindful of their commitments to the customer and will adjudicate each claim fairly and consistently in line with the policy terms and conditions.

Last week, Insurance Ireland announced forbearance measures for business customers including; reduced premiums for business customers to reflect reduced level of exposure as a result of Covid-19 restrictions for Employers Liability / Public Liability and Commercial Motor; renewal flexibility; maintenance of existing cover where the premises is closed or unoccupied; support change of use during Covid19 crisis.

Ms Murdock said: "Irish insurers continue to pay out around €250 million to customers in claims and benefits every week. "Customers can be assured that their insurers will continue to deliver for them during the crisis, paying pensions, settling life, travel, household, property, liability, motor and health insurance claims."

Minister Donohoe said: "The main message that I wanted to convey to the insurance industry, through Insurance Ireland, is the need for the industry to help itself and do the right thing by customers during this time. I made it clear that failure to do so will be very damaging for the longer term reputation of the sector."

The group was told that the cost and supply of insurance will be a priority for the new government and the group was told that the industry needs to actively engage on the reform agenda.

Source: RTE