# Reform of Irish Insurance



## Megan (25 Sep 2006)

Moving on to the wider classes of premium, in the past 12 months up to the end of March, we have seen a 12.6% reduction in the motor private class; a 10.3% reduction in the commercial motor class, including fleets; a 9.3% reduction in general liability classes, such as employers’ and public liability; and a 4.2% reduction in the property class.

The above is an extract  from Mr. Dick O'Driscoll M.D. of Hibernian Insurance given by him to the Joint Committe on Enterprise & Small Business reform of Irish Insurance Market Presentation on May 17th 2006.
[broken link removed]

Does that mean that all of us with our full NCB should expect to get 12.6% reduction on our motor insurance this year when our renewal notice comes out. 
I have allready got my commercial renewal notice and I was given €1.00 reduction. Of course I have queried it and now I have got roughly 10% reduction. Buyer beware.


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## Maine (25 Sep 2006)

Hopefully ryanairs and tescos enter the market soon in a big way .......the profits by irish insurance companies are huge relative to the size of the market - it could be the most profitable market globally


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## CCOVICH (26 Sep 2006)

Maine said:
			
		

> Hopefully ryanairs and tescos enter the market soon in a big way


 
Tesco are in the insurance market-they offer life assurance and motor insurance, but they only act as agents/brokers. They were not the cheapest (for me) for either life or motor cover.

I don't know if I would buy insurance from Ryanair.


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## Maine (26 Sep 2006)

CCOVICH said:


> Tesco are in the insurance market-they offer life assurance and motor insurance, but they only act as agents/brokers. They were not the cheapest (for me) for either life or motor cover.
> 
> I don't know if I would buy insurance from Ryanair.


 
Fair points - for me Tesco and the rest of the supermarket giants have not yet really put any serious effort into the insurance market.  They are only dipping their toes in it until they get more comfortable.

In the 90s people also said they would not fly with Ryanair however that changed.

Irish insurance market needs a few more competitors to at least push down some of the super normal profits


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## CCOVICH (27 Sep 2006)

Maine said:


> Fair points - for me Tesco and the rest of the supermarket giants have not yet really put any serious effort into the insurance market. They are only dipping their toes in it until they get more comfortable.


 
Or they are happy to be part of the existing 'cartel'-remember that they are depending on Hibernian to underwrite their motor insurance.....



			
				Maine said:
			
		

> In the 90s people also said they would not fly with Ryanair however that changed.


 
Not me-it's actually the opposite-for pretty much the same money, or a small premium, Aer Lingus are now my choice.



			
				Maine said:
			
		

> Irish insurance market needs a few more competitors to at least push down some of the super normal profits


 
In a perfect market, yes.  I am happy with the path my motor insurance premium has taken in the past few years.


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## Maine (5 Nov 2006)

The regulator has admitted that irish insurance companies have done very well out of the reforms - hardly surprising given the massive profits they are making out of the domestic market. 

We are just unfortunate that the market is not big enough to persuade more international players to enter the market.

Regarding the ryanair vs flying with aer lingus - many only fly aer lingus now since they dropped their prices to compete with ryanair.  How many would pay 300 now in a fare to fly to london. For me the insurance market has the pricing profile of the aviation market in the early 90s - some competition but along way from real competition.


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## Brendan Burgess (5 Nov 2006)

Hi Maine

Irish insurance companies went through a period of heavy losses. The reforms have reduced claims and so now they are going through a cycle of profitability. 

There probably will be some new entrants and the profitability will reduce again. 

Don't forget we have had two major companies which went bust - PMPA and ICI.

I imagine that a lot of overseas companies have looked at the Irish market and view it as over-regulated. The politicians comments on the market make it uninviting for new entrants. I think Mary Harney met with a number of overseas companies to try to get them involved, but none has bothered. 
I am very happy to fly Ryanair, but I would not buy insurance from them either. They have a very low cost "ethos" which would not be appropriate to dealing with claims.

Brendan


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## Maine (5 Nov 2006)

Hi Brendan,

I am very much in favour of insurance groups making profits that reflect a good rate of return thru the top and the bottom of the cycle.  We need a strong insurance industry for the economy to thrive.

It is dangerous however for any industry to get used to very high rates of return on capital as reluctance builds to move to lower rates of return.

For a market of 4m it is very understandable why some other companies are simply not bothered to get involved. 

Insurance is an industry however that consumers may in time benefit from the EU i.e standardisation across europe.  I think technology may drive down the barriers to entry in local markets.

Maine


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