Motor insurance costs in Ireland are on the rise, with premiums increasing by 7.4% in May compared to last year. This marks the ninth consecutive month of rising insurance costs, outpacing the general rate of inflation by almost three times. While the overall inflation rate stood at 2.6% in May, motor insurance premiums continue to climb despite efforts to introduce reforms to benefit insurance companies.
According to the Central Statistics Office (CSO), inflation remained unchanged from April, indicating a steady increase in prices across various sectors. The rising cost of motor insurance has been attributed to an increase in claims made by motorists, leading to higher repair costs for damaged vehicles. In addition to motor insurance, home insurance costs saw a 5.8% increase over the past year, while health insurance prices rose by 11.9%.
Consumer groups and business organizations have criticized the insurance industry for failing to reduce premiums despite promised reforms that were meant to lower claim costs. Industry leaders were recently summoned to a government minister’s office and given a deadline to cut premiums in order to pass on savings to consumers and businesses. However, motor premiums have continued to rise for eight consecutive months, causing financial strain on businesses and individuals alike.
Neale Richmond, the junior minister responsible for financial services, credit unions, and insurance, has expressed concern over the lack of action taken by insurers to reduce premiums. He has scheduled a second meeting in July to address the issue and has warned that Finance Minister Michael McGrath may consider further measures to force premium reductions if necessary.
Insurance Ireland, the industry lobby group, has defended the rising premiums by pointing out that motor insurance costs have actually decreased by 40% since the first quarter of 2017. The average insurance premium in Ireland is now €670, compared to €1,100 in Northern Ireland and Britain. The group has also highlighted an increase in road fatalities and a rise in damage claims, as reported by the Central Bank’s motor report for 2022.
Despite efforts to reform the insurance sector and reduce claim costs, motor insurance premiums in Ireland continue to rise, posing challenges for consumers and businesses alike. As government officials and industry leaders work to address this issue, it remains to be seen whether premiums will eventually decrease to alleviate the financial burden on policyholders.