- Motor premiums up 20pc on last year
- Rises to continue for at least another year
- Aviva unable to to predict when increase will stop
Drivers and homeowners face another year of premium rises despite insurers reducing their losses.
Both RSA and Aviva said that claims for motoring accidents remained a problem, with Aviva unable to say when premiums would stop rising.
Motor premiums are up around 20pc in the past year, with motoring experts predicting at least another year of rises.
Chief executive of the Irish Brokers Association Ciaran Phelan warned drivers to expect more hikes.
“The recent motor premium increases of approximately 20pc over the last 12 months have reduced the loss-making in the sector, but there is still the probability of further increases over the coming months,” he said.
Motor premiums have now jumped by 20pc compared with where they were a year ago and are due to keep going up, according to Conor Faughnan of AA Ireland.
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He said rises in premiums would continue for at least another year.
The higher cost means that a car that was insured for €400 last year now costs €480.
Official figures for April show that premium rates have shot up by 16pc in the past year.
But AA Ireland, which is also an insurance broker, said rates were now up by 20pc in the past year.
Scandal-hit RSA said yesterday it has lowered its losses, with Aviva reporting a fall in premium income.
Aviva Ireland’s chief executive Hugh Hessing said his company remained under pressure on the motoring side of its business.
“The pressure is on and it has not gone away. I can’t say there will be no more increases,” he told the Irish Independent.
The company has controversially stopped insuring cars that are 15 years or more old, claiming there was a higher risk of claims for those insuring an older vehicle.
Mr Hessing said higher rebuilding costs were likely to put pressure on home insurance premiums but it was attempting to counter this.
Aviva reported a fall in Irish premium income for the first half of this year.
However, profits across Aviva Ireland’s general insurance, health insurance and life businesses rose by 80pc to €45m in the first half of the year, up from €25m in 2014.
Mr Hessing said the better performance was partly due to the company charging consumers higher premiums.
“This improvement is driven by technical underwriting and pricing actions taken to ensure long-term sustainable growth in challenging market conditions. Benign weather in the year so far has also benefited our performance,” he said.
British-owned insurer RSA lowered its Irish losses to €23m in the first half of the year, down from €91m in 2014, as it noted that “remediation continues” at its Irish arm.
Group chief executive Stephen Hester said that while losses are coming down in Ireland, it is “with some uncertainty remaining as claims patterns mature”.
RSA, which was caught up in a massive accountancy scandal here, hopes to return the business to profitability in 2016 “through continued underwriting improvement and cost reduction”.
Its British parent was forced to pump almost €400m into the company after a massive hole emerged in its accounts.