September 14, 2016
- Commission checking if insurers have signalled premiums rises to each other
The Competition and Consumer Protection Commission has issued summonses to motor insurance providers compelling them to give evidence on suspected breaches of competition law.
As part of an investigation the commission is looking at whether insurers have openly signalled upcoming premiums rises to each other.
The consumer body’s chairwoman, Isolde Goggin, said statements signalling price rises could result in “a degree of unspoken co-ordination” between rivals.
“Statements by senior industry players have raised serious suspicion as to whether there is a link between these messages and subsequent price increases.
“The evidence collected through both the witness summonses and the information requests will assist us in establishing whether there has been a breach of competition law.”
The commission’s move comes amid growing anger over price rises by insurers. The cost of motor insurance is reported to have climbed 70 per cent over the last three years, with a 38 per cent increase during the last 12 months.
A witness summons allows the commission to request a person or business to come before it and to produce books, documents and any other relevant records that the body considers necessary to enable it to carry out its investigation.
Any individual or business found to have breached competition law could be subject to civil or criminal legal proceedings. The commission would not be drawn on particular sanctions as the investigation is ongoing.
Insurance Ireland, which represents most providers in the Republic, confirmed it had received a witness summons. It said it was “fully satisfied that it has no issue in relation to competitive practice, and is confident that this will be confirmed”.
FBD, one of the country’s biggest insurers, said it welcomed the investigation, but stressed that injury claim awards were the primary factor in rising premiums.
Appearing before the Oireachtas Committee on Finance yesterday, chairman of the Bar Council Paul McGarry said financial mismanagement and imprudent pricing were behind the rise in premiums.
He said there had been mismanagement of the insurance industry between 2012 and 2014, and increases in premiums were to “restore profitability”.
(By Charlie Taylor, Fiona Gartland & Fiona Reddan)