Sherlock seeks answers on insurance costs

THE Labour party spokesman on Public Expenditure, Mallow TD Sean Sherlock, has urged an insurance watchdog to provide “plain answers” to the vexing question of rising insurance premiums for Cork motorists.

Deputy Sherlock raised the issue f spiralling insurance premiums with Patrick Kenny of the Consumer and Competition Protection Commission (CCPC) at a meeting of the Oireachtas Finance and Public spending committee, the body investigating the issue.

Regarding the issue of so called ‘price cartels’, Deputy Sherlock refereed to the commission’s use of the analogy “smoke filled rooms.”

“If one were to fast-forward to modern language, it is air-conditioned rooms in glass towers on the 15th floor. But, it’s the same type of behaviour where an influence is being brought to bear on the market in the context of pricing,” said Deputy Sherlock.

He said that regardless of the language used, Mr Kenny was essentially telling the commission was that there was a concern about what he described as “cartel-like” behaviour.

“Let us not be too prescriptive on the word ‘cartel’ as Mr Kenny has elucidated to us. That is de-facto cartel-like behaviour, where one is influencing the price determination for a project,” said Deputy Sherlock.

The Mallow TD also the opportunity to highlight the issue of data transparency between insurance companies and the lack of access to that data.

“We know what the injuries board pays out, but there is a whole indeterminable figure that we do not know in respect of settlements. We do not know the true cost of settlements, because there is not perfect knowledge,” said Deputy Sherlock.

He said that without access to this data it could be argued that the CCPC was “on the back foot” in respect to their investigation.

“If it (the CCPC) does get access to that data, what can it do to assure consumers that their premiums will reduce as a result,” said Deputy Sherlock.

“I have been using the following analogy for the past few days: if my insurance premium has gone from €500 to €800, a €300 increase, what portion of that increase is re-provisioning or rebalancing?”

Responding to Deputy Sherlock’s questioning, My Kenny said there may be a number of factors pushing up the cost of insurance premia.

“People may decide independently and perfectly in compliance with competition law and that may still continue. What we are after is the degree to which in any market signalling accelerated of exasperated a given price increase. That is where we come in for this purpose,” said Mr Kenny.

Off the back of that reply, Deputy Sherlock reiterated his point about the importance of people being given simple answers to their questions on the issue of high insurance costs.

“The CCPC is going on now to take a look at the insurance sector, as it relates to motorists,” said Deputy Sherlock. “

“That will give people some degree of comfort, but only if they know there is an outcome that results in a reduction in premium prices,” he said.