Insurance payouts are DOWN. So why are premiums up by 60% in two years?

NEW figures show that insurance companies paid out more in 2011 and 2012 than they did in 2014 – despite industry claims that increased payouts are the reason behind the spiralling cost of motor insurance.

The figures were released by the Dáil after Fianna Fáil finance spokesman Michael McGrath submitted a parliamentary question to Finance Minister Michael Noonan. They showed that in 2011, the total motor liability claims paid amounted to more than €1.5bn. That fell to €1.07bn in 2012, just over €987m in 2013 and just over €1bn in 2014.

Mr McGrath said: ‘While we do not yet have figures for the amount paid out on claims in 2015, the data to the end of 2014 does not substantiate the assertion by the industry that motor insurance claims are the main reason behind rocketing premiums. In fact, the amount paid out in claims in 2014 was 36% less than the amount paid out in 2011.’

Despite the decrease in payouts, there has been a 60% increase in premiums since 2014 and a 35% increase in the past 12 months alone.

Mr McGrath repeated his party’s call for a task force to be set up to tackle the issue and identify the ‘real reasons why premiums are rising at an unsustainable rate and to make recommendations to deal with the problem’.

He said: ‘Escalating premiums are now a major financial problem for private motorists and for thousands of businesses across the country. Motorists are now typically paying several hundred euro more than they were in 2014.’

Factors which should be examined, he said, include fraudulent and exaggerated claims, legal costs, regulation, consumer protection, the role of the Injuries Board and the need for a national register.

‘Identify real reasons and deal with them’